Evening star., 1938-02-13
BY JAMES E. CHINN.

BY JAMES E. CHINN.
Civic leaders made preparations
last night to go before the subcom-
mittee on Fiscal Affairs of the House
District Committee this week and
fight for a general consumers sales
tax of 2 per cent as substitute for
the proposed three-point tax increase
program as provided in the 1899
revenue bill.
Public hearings on the measure will
start before the subcommittee to-
morrow at 10 am.
The sales tax will be urged chiefly
by the Federation of Citizens Asso.
Citations, whose Executive Committee
at special meeting Friday night ap-
pointed committee of three to i'm
press on Congress that organized cit
liens of Washington vigorously op-
pose the new revenue bill The COM
mittee is composed of l.. A. Car
ruthers, president Of the Federation;
Thomas E. Lodge, former president,
and A. M. Edwards, vice chairman
OF the organizations Fiscal Affairs
Committee.
Three Taxes in Revenue Bill.
The three tax-raising plans en-
bodied in the revenue bill provide:
l. A tax Of per cent on the in
comes Of all persons who work in the
District.
2. Continuation of the present busi-
ness privilege tax on gross receipts,
modified with a graduated scale of
rates.
3. Continuation Of the existing
SITS tax on real and personal prop
erty, which represents an increase of
rs cents over the rate In the last
fiscal year.
Mr.. Carruthers said the special Fed
Grafton committee probably would not
appear before the House subcommit-
tee at the initial hearing, as it is wait
ing on Chairman Nichols for q def
mite assignment of time.
The Federation committee, accord
ing to Mr.. Carruthers, will take the
position that the Federal payment
toward District expenses should be
increased before Congress imposes
any additional taxes as called for
in the revenue bill. II additional
revenue is needed to balance the
budget after the Federal payment is
raised, he said, the committee will
then propose a 2 per cent sales tax
exempting foods, drugs and lower
priced clothing.
Favors Limiting Revenue.
The committee also will recon-
mend that the Commissioners be al
lowed to fix the real estate tax rate.
and that any new tax legislation be
designed to raise only the amount
OF revenue actually needed to bal
ance the budget.
The three-point tax program OF the
subcommittee is estimated to yield
about s6,600,0 900 in additional revenue.
The budget deficit in the coming
fiscal year is not expected to exceed
SO .OO0,O 900.
The Commissioners are scheduled
to be the first witnesses to appear
before the subcommittee, but they
probably will not make any definite
recommendations in view of their
previous "straddling" Of tax legis-
lation.
It will be recalled that when the
Commissioners sent to Congress, more
than month ago, the tax programs
of their own tax committee and those
Of the Citizens Advisory Committee
on Taxation, they described the pro-
posals as suggested sources of addi-
t1onal revenue" and said they would
be prepared to discuss them with the
subcommittee when it started hear
ings on the revenue bill.
Recommended Lump Sum Increase.
The official District Tax Committee
recommended an increase from
$5,000,000 to $7,500,000 in the Federal
payment, general sales tax not to
exceed per cent with no exemptions,
and a per cent tax on incomes, This
committee estimated its program
would raise an additional $4,000 900,
broken down as follows: Increase In
the Federal payment, $2,500,ooO;
sales tax Of per cent, So, 500, 900, and
a l per cent income tax, $1,000, 1000.
The recommendations of the Citi-
zens' Advisory Committee on Tax
alton, which, incidentally, was headed
by Mr.. Carruthers, called for an in
crease in the Federal payment, and
If Congress failed to agree to that
plan, that a general consumers tax
be provided. exempting food and
medicine. The committee also sug-
gested that the Commissioners be al.
lowed to fix the rate Of the sales tax.
Chairman Nichols Of the Fiscal AZ
fairs Subcommittee expects the tax
bill to undergo many changes before
it Is reported to the House for consid-
GRAFTON. His own prediction is that
the income tax bill will be eliminated
and the SITS real estate levy will be
reduced to $1.60, leaving the 10-cent
increase above the former real estate
tax rate and the modified business
privilege tax to produce the additional
revenue needed to keep the District
out Of the red in the new fiscal yeSr.
These two sources are estimated to
yield $500, 900 in additional revenue.
That would be ut least 100000 in
excess Of what now appears 70 be
needed to balance the budget.