Evening star., 1938-12-04
Privilege Tax
Abandonment
Is Urged
Intangible, Utility
Levies Backed
By Citizens

Beginning the task OF formulating
its own proposals for a new District
tax program, the Federation of Citi-
zens' Association last night asked
that the business privilege tax be
not re-enacted and that Congress
provide a ceiling" on the real prop
erty tax rate of SITS per 500 as
sessed valuation.
Because of considerable contro-
versy over special tax proposals,
however, the Federation was Unable
to complete action on series of
recommendations advanced by its
Fiscal Relations Committee, and de-
cided to hold a special meeting,
probably next Saturday night.
The delegates unanimously agreed
on a special session after Harry S.
Wender of the Southwest Citizens
Association pointed out that the
Commissioners Tax Advisory Com
mittee wished to receive the Fedora
tion's proposals before December IS.
Proposals Offered.
Before the recess was declared,
however, the Federation adopted
resolutions offering the following
other proposals:
/. Urging retention of the in
tangible property tax law and put
ting teeth" into the act.
2. Urging S per cent gross re-
ceipts tax on all public utility cor
porations in the District, except the
Capital Transit Co., and per
cent gross receipts tax on that
company.
At the same time, the Federation
asserted that before it will favor
any special type of additional tax,
I'VE reiterate our stand that, if
the Federal Government paid its
proper share of the cost of main
tanning the District of Columbia
government, there would be no need
OF additional taxes"
Corporation Tax Favored.
The Fiscal Relations Committee
report, which was offered by Ch9Y-
man A. M. Edwards, also recon-
nended approval of a corporation
net income tax on all corporations
domiciled or doing business in the
District, with the exception of the
public utilities.
However, this proposal and an
other asking disapproval of the Tax
Advisory Committees suggestion of
non-salary, non-wage personal net
income tax and a retail sales tax
were not acted on by the Fedora
ton due to the latenesS Of the hour
They will be considered at the spe-
cial meeting.
The Federatlon's proposal with re-
gard to the real estate tax called on
Congress to provide by statutory
enactment that the maximum tax
rate on real property in the District
shall not exceed SITS.
1T is quite generally agreed, u
the Fiscal Relations Committee said
that real property in the District
Is now bearing its full share, if not
more than its full share, of the tax
load; and there is almost united
opposition to any increase in the
tax rate above SITS per 500 OF
assessed valuation"
Amendment Defeated.
The proposal brought forth a sug-
gestion from Delegate William NICK
Clayton that if a ceiling of SITS
is recommended Congress will be-
lieve that District residents feel that
the rate should be that high.
The present rate of SITS was
only temporary measure made with
the understanding that it would be
reduced later" Mr.. Clayton declared
District real property being as
sessed at its full valuation, and the
old $l.50 tax rate was comparable
to the rates in other States"
Mr.. Clayton offered an amend
ment to the resolution asking tha.
a $l.50 rate be the maximum, but
his suggestion was lost by a "a to
II vote.
L. A. Carruthers, president of the
Federation, warned that dropping
the rate to $1.50 would mean the
loss of about $3,0O0,OOO in revenues,
and that other taxes would have to
be levied to make up for it,
I'VE are hopeful that the new
tax program will permit lowering
the present rate" he said, "but we
must remember that when we cut a
certain tax, we must find other
sources of revenue"
Substitute Motion Rejected.
There was considerable contro-
versy over the proposal to retain the
Intangible property tax, but sub
stitute motion asking that the Fed
Grafton favor repeal of the tax as
being "duplicative, inequitable and
difficult of administration, was de-
feated.
The substitute proposal was Of
fered by Mr.. Wender, who declared
that the intangible levy has fallen
into disrepute." He contended that
1t is easy for citizens to avoid
payment of this tax and declared
1t is questionable whether the levy
meets the fundamental rule involv-
ing ability to pay.
In arguing for retention, George
A. Corbin of Manor Park admitted
there is some hardship connected
with the administration of the in
tangible property tax, but contended
the collection cost is small and that
the revenue from the tax here is
the highest in the country. There
(See FEDERATION, Page B-5)