Evening star., 1938-01-18
TWO INCOME TAX
PLANS SUBMITTED
|F0R D. c. REVENUE
House Subcommittee Con.
siders Proposals - One
Exempts U. S. Employees.
NO RATES SUGGESTED
IN SEALS MEASURES
Method May Be Substitute for
Business Levy or Realty
Increase.
By JAMES e. CHINN.

Two different plans for an income
tax were taken under consideration to-
day by members Of the Fiscal Affairs
Subcommittee Of the House District
Committee, who are now at work on
legislation designed to raise $4,000, 900
in additional revenue In the coming
fiscal yeaf.
The plans were drafted by Corpora
tion Counsel Elwood H. Seal in &C.
cordance with instructions given him
by the subcommittee. One would tax
all persons whose income is earned
in the District, members of Congress
as well as non-residents. The other
would exempt members Of Congress
and all Federal employees.
The idea is for the subcommittee
to select one Of the two plans to In
corporate in the new revenue bill If q
majority Of the members insist on this
form Of taxation as substitute for
either the business privilege tax on
gross receipts, or continuation Of the
existing SITS levy on real and per-
sonal property.
Sales Tax Ruled OUT
Chairman Nichols declared two Of
these proposed revenue sources would
have to be adopted to balance the 1899
budget. The proposed general sales
tax, he said, is definitely out
Both drafts Of the proposed income
tax bills fail to contain q rate. A
blank space was left by Mr.. Seal for
the subcommittee to fill in the figure.
If 1T ultimately decides to sponsor An
income tax.
Both proposed bills would impose
the tax on non-residents, but they
would be allowed a credit for q levy
paid in the States in which they live.
For instance, If a resident Of Virginia
who Is required to pay an income tax
II ne does not work for the Federal
Government, Is taxed $25 there, and
his local levy would amount to $50.
ne would be billed for IS by the Dis.
trict.
Mr.. Seal, it was said, modelled both
ollls after the one which the House
80 vigorously rejected last year, except
that he failed to write in the rate, and
IN one case provided q specific exemp-
tion for Federal employees and mem
bers of Congress.
Ranged Up to 5 Per Cent.
The original income tax bill pro-
vlded graduated rate, starting at l
per cent on incomes Of 81, 900 or more,
and ranging up to per cent on In
comes in excess Of $4,000.
Estimates furnished the gubcom.
mittee indicate an income tax without
exemptions would produce about S..
100000 year. No estimate has been
advanced, however, as to the amount
OF the prospective yield with Federal
employees exempted. District ofncials,
however, have pointed out the yield
would be substantially small" since
it would only affect employees Of pri-
vate establishments, who are In the
minority in Washington.
] MIR. Seal was requested to draft the
two income tax plans as q result of
a so-called misunderstanding" among
subcommittee members as to the forms
OF taxation 1t would recommend. A
week ago it was tentatively agreed to
write revenue bill providing for con-
tinuation of the present unpopular
business privilege tax, with modinca-
tions to eliminate its inequihes, and
the SITS tax on real estate,
Income tax supporters on the sub
committee, headed by Representative
Dirksen, Republican, of Illinois, how.
ever, baked yesterday and forced the
subcommittee to delay until tomorrow
the actual writing of the new tax
program.
Mr.. Nichols is confident the original
tentative plan will be finally approved.
The income tax proponents, it was
said, will have an opportunity to
sponsor the plan ON the floor of the
House by urging that this levy be sub
stituted for either the business privil.
ege tax or the $l.75 real estate levy,
Under that plan, the selection Of the
forms Of taxation to be imposed ON
the District In the coming fiscal year
to raise the needed 100000 would
be placed squarely on the entire House
membership, and not on . committee
or subcommittee.