Evening star., 1938-03-01
NICHOLS SUPPORT.
ASSURES BILL FOR
D. c. INCOME TAXI
One Sixth of Federal Rate
Expected to Replace
Receipts Levy.
MEASURE rewritten
FOR D. C. Committee
Credits for Payment in Other
States to Be Provided to Avoid
Double Taxation.
BY JAMES E. CHINN.

ny JAMES T.. CHlNN.
An income tax amounting to one
sixth of the Federal income tax paid
on incomes derived in the District
may be substituted for the existing
unpopular business privilege tax on
gross receipts by the Fiscal Affairs
Subcommittee of the House District
Committee, it was indicated today by
Chairman Nichols.
The 1889 revenue BILL now under
consideration by the subcommittee,
proposes a fiat l per cent tax on all
incomes earned in the District.
The new income tax plan, drawn by
the Citizens Committee on Fair Tax
alton at the request of Mr.. Nichols, is
estimated to produce more than ST.
100000 a year in additional revenue.
The committee claims its adoption,
together with continuation of the
present SITS real estate tax rate, will
raise sufficient revenue in the COM
ing fiscal year to balance the budget,
eliminate the business privilege tax
and finance relief appropriation of
100000.
Nichols Impressed.
Shortly after the committee sub
mitted the plan to Mr. Nichols late
yesterday he said he was so impressed
with the proposal he likely would
sponsor it as substitute for the
business privilege tax. Mr. Nichols,
incidentally, is the only member of
the subcommittee who has fought
consistently for continuation OF the
business privilege tax
The Star last Friday indicated the
business privilege tax might be
scrapped for an income tax. Mr..
Nichols final capitulation virtually
assures his subcommittee will remove
the business privilege tax from the
bill before reporting it to the full
committee.
In brief, the income tax plan pro-
posed by the Fair Taxation Commit
tee provided:
l. An income tax on both corpora
tions and individuals equal to one
sixth of the Federal tax
2. Non-residents and corporations
would be taxed only on income di-
rived from sources within Ssae District.
3. Credits would be provided for
taxes paid in other States in such a
manner as to prevent double taxa
tion,
The Taxation Committee told Mr..
Nichols if its bill is enacted, Federal
rulings could govern for District pur-
poses, and only questions of alloca-
tion of income between District and
outside sources could arise under the
new act. The fact that the proposed
statute relies on Federal definitions
and provisions already enacted into
law, it said, will serve to eliminate
litigation on matters already clarified
by construction of Federal statutes.
The committee also said its plans
would make unnecessary the pro-
posed new Board of Tax Appeals,
which would probably save the District
100000 year, and that no auditing
division would be necessary to ex-
anime returns on complicated ques-
tions Of income tax law.
Mrs. John Boyle, jr., chairman of
the committee, told Mr.. Nichols it
represented 125,000 District residents. |
The affiliated organizations include
the Consumers Council, the Citizens
Committee for Progressive Action, the
National Labor Relations Board En-
ployes' Union, the National Negro |
Congress, the Washington Industrial
Union Council and the District Co.
operative League.
Revision Expected This Week.
The subcommittee is expected to |
complete its revision of the original |
revenue bill before the end of the |
week. Mr.. Nichols has arranged a
series of executive conferences to put
the measure through a rewriting |
process.
A local tax on beer is to be one |
of the additions to the original bill. |
The subcommittee is said to favor a |
rate of 81 barrel, the amount of |
the Federal tax before prohibition. |
Such a levy. it is estimated, will
raise 100000 a year in additional |
revenue. Mr. Nichols, however, thinks |
the tax should be at least 50 a barrel.
The present bill calls for continual
tion Of the SITS real estate tax rate,
but Mr. Nichols said he would fight for
reduction to $l.60, believing an
income tax and that rate of taxation
on real estate, coupled with a tax on
beer, would produce more revenue
than the District will need to balance
the coming years budget.