Evening star., 1938-04-12
BY JAMES E. CHINN.

Its heart removed-the section that
would have imposed an income tax on
virtually everybody who works in
Washington except members of Con-
gress and select group of others
went to the Senate today to face an
uncertain fate.
The same House that year ago
fevolted against an income tax for
the District because it would have
applied to the salaries of members of
Congress, late yesterday killed a SIM
. liar plan by a decisive l97-87 roll cal
vote, largely because it would have
exempted them and taxed other non
residents
With the income tax eliminated. the
bill now will fall short by about
100000 of providing sufficient reve-
nue. to meet an anticipated deficit
OF S4,400,000 in the coming fiscal
year beginning July l. The remaining
tax features retained in the measure
are estimated to yield $3,20O0O0 in
additional revenue
King to Hear Officials.
Chairman King of the Senate Dis
tract Committee, who will now have
charge of the bill, plans to call the
Commissioners and other municipal
offlcials into conference in a few days
to decide on potential tax source
to tap to make up the revenue the
Inflated income tax plan was designed
to produce
Personally, Senator King favors an
income tax and believes the Senate
should restore that plan to the bill.
He said, however. he would subordi-
nate his views to those of the District
officials
There are several tax sources dis
carded by the House Fiscal Affairs
Subcommittee, which wrote the bill,
that would produce the necessary
s1,2O0,0O0. One is an increase of so
cents a gallon in the present tax on
hard liquor, which is estimated to
yield exactly that amount An in
crease from $1.75 to $l.85 in the
existing real estate tax rate also would
raise sl,2o0,OO0.
OPE"Seo Dy King.
Senator King, however, opposes both
these plans. He does not believe the
real estate tax rate should be raised.
and he doubts whether a 50-cent in
crease in the hard liquor tax would
yield s1,2OO,OO0.
1t will be recalled that the Senate
last year voted for local income tax
after the House refused to approve it.
but the plan was eliminated in con-
ference and the business privilege tax
on gross receipts substituted.
Removal of the income tax section
represented victory for Representa-
tlves Smith of Virginia and Lewis of
Maryland, both Democrats, who not
only sent joint letters to every mem
ber urging defeat of the plan, but led
the opposition fight on the floor Of
the House. Mr.. Smith. incidentally,
sponsored the amendment adopted bv
the House, which eliminated the in
come tax section from the bill.
Representative Nichols, Democrat, of
Oklahoma, who headed the subcom-
mittee which wrote the revenue bill.
fought valiantly to save the income
tax section and after he had lost, gave
the following statement to newspap per
men:
Il am satisfied now that some other
method of running the District gov
eminent must be adopted. Congress
permits prejudices to govern rather
than what is best for the District.
1T was perfectly silly for the House
to follow Representatives Lewis and
Smith, whose constituents from nearby
Maryland and Virginia help fill up the
Federal pay roll in Washington"
Palmisano Votes for Amendment.
Only of the 10 members of the
House District Committee voted on the
Smith amendment. and three of them
cast their ballots in favor of it, in
cluding Chairman Palmisano, who pre-
viously had made speech in favor OF
the income tax, and defended the pro-
posed exemption of members of Con-
gress from payment of the tax.
In addition to Chairman Palmisano
those on the District committee who
voted to kill the income tax are Rep
resentatives Schultz and Jenckes. both
Indiana Democrats. The other 81,
who voted against the amendment are
Representatives Nichols, McGehee
(Saa n r. TAYEc De-. eN