Evening star., 1938-11-23
Higher Utilities
Taxes Seen as
Consumer Blow
Spokesman Of Four
Companies to Draft
Opposition to Plan

Warning that any increase in tax
alton on the four major utility con-
Germs of Washington would consti-
tute an indirect increase in taxes on
consumers was placed before men,
bers of the Commissioners Tax Ad-
visory Committee yesterday by util-
ity concern spokesman.
Officials of the utilities agreed to
meet within 10 days to formulate q
formal answer to the proposal of
the city tax experts for imposition
of fiat rate Of S per cent corpo-
ration net income levy on the utili-
ties, plus a uniform gross receipts
| tax
The discussion yesterday was a
preliminary to the formal public
hearings to be conducted jointly
next Monday and Tuesday, begin
ming at 10 a m, in the Senate Judi
ciary Committee room at the Capt.
tol by the Commissioners advisory
group and the experts of the Con-
gressional Joint Committee on In
ternal Revenue Taxation.
While the utility spokesmen agreed
their concerns should bear an equi-
table taxation, they warned that
higher taxes would hamper" any
further reduction in utility rates to
the consumers.
Maj. Daniel J. donovan, chairman
of the Commissioners Tax Advisory
Committee, made public revised
tabulation of the probable effect of
the suggested utility tax program,
as follows:
Capital Transit Co., $299 1888 from
a tax on gross receipts, correspond
ing with the present franchise levy,
plus $500 from the suggested per
cent corporation net income tax.
Chesapeake & Potomac Telephone
Co., $426,965 from gross receipts
taxes and $lO1, ,699 from the income
levy.
Washington Gas Light Co., $331,-
566 from gross receipts taxes and
S46,713 from the corporation income
tax.
Potomac Electric Power Co., $529,-
SAT from gross receipts and $192 ,750
from the proposed income tax.
Indicates. S4S3,O81 Increase.
Such a schedule would indicate
that the four utilities would pay
$433 08l more in taxes in the next
fiscal year than they are paying now.
E. D. Merrill, president of the
transit company, emphasized that
his concern pays the largest gasoline
tax and the largest social security
tax and that it would be glad" to
pay increased District taxes If it
were relieved of the 5000, 1000 loss he
said his concern sustained each year
by reason of the compulsory three
cent fare for school children. He
added that the transit company had
expended about $12,000,OO in the
past four years for physical improve
ments and said the pressure for ad-
ditional new equipment was strong
at all times.
Robert c. Overs, representing the
Washington Gas Light Co., ques-
toned whether there could be any
taxes were increased.
DR.. William Mcclellan, president
OF the power company, argued that
the proposed 1929, ,423 net increase
in taxes on the Pepco would mean,
actually, an increase of approx
mately 81 year from each power
consumer. He argued that power
consumers have enjoyed an annual
saving OF some $560,000 during the
last 10 years in rate reductions.
Ralph A. Van Orsdel, for the
telephone company, submitted sim
liar arguments, contending that If
taxes were increased the extra rev.
enues would have to come out of
the pockets of the customers by loss
of rate reductions which otherwise
might be possible.