Evening star., 1938-12-20
Tax on Incomes
Above $4,000
To Be Studied
100000 Revenue
. Possibility Seen
In Proposal

A soak the rich" income tax
which would apply only to salaries
in excess of $4,000 year, will be
considered tomorrow by the Com
missioners' Advisory Committee on
Taxation. when it meets at the Dis
trict Building primarily to draw up
report for the House and. Senate
District Committees.
The latest tax scheme is esti-
mated to yield, depending on the
rates suggested, between $l.000,OOO
and S2000000 a year in additional
revenue The plan was proposed,
according to committee members,
ito meet demands for taxation OF
higher salaries" and also as COM
promise to advocates of straight
graduated income tax modelled after
the Federal income tax law.
Proponents of the new plan claim
Its adoption would provide a me-
dium for legal test as to whether
the salaries of Federal employees
could be taxed by the District.
One of the principal objections
raised in the past to local income
tax in any form is the question OF
its constitutionality if it should be
applied to the salaries OF Federal
employees. Twice the House has re-
fused to consider an income tax for
the District.
S7,00O,000 Revenue Seen.
The Commissioners Advisory Tax
Committee today called upon Off
cials of the Citizens Committee on
Fair Taxation to produce figures to
show how the District income levy
could produce as much as $7,0OO,OOO
or more in revenue.
Some of the Commissioners ad-
visers had raised serious questions
as to whether use of the Federal eX-
emption and credit plans and mod
crate" rates for the suggested Dis
trict income tax could produce so
much revenue.
The following letter was sent to
Mrs. John Doyle. jr., president of the
Citizens Committee on Fair Taxa
ton, by Chairman Daniel j. Dono-
van of the Commissioners Com
mittee:
Il am directed by the Advisory
Committee to request you to advise
me as soon as possible of the figures
upon which your committee bases
its contention that progressive in
come tax, using Federal personal ex-
emptions and credits for dependents,
will yield approximately s7,0o0000
to $7,50O,000 year under moderate
schedule of rates, showing also the
proposed rates"
Arthur Bernstein, chairman of the
Subcommittee on Research for the
Fair Taxation Committee, said fig-
ures supporting its contention would
be filed within a day or two. He
added that his group was suggest
ing a maximum rate of 9 per cent
on the highest brackets of income.
7 Pct. pretty Low"
Mr.. Bernstein said that while the
highest rates adopted by most States
ran around or per cent, he con-
sidered these pretty low" and re-
ported that North Dakota has a
maximum rate of Is per cent on in
comes of $4,000 or more; California
a maximum rate of Is per cent on
incomes of $250,000 or more, and
>. liGXimum on in
comes of $4,000 or more.
Some tax students who questioned
the revenue estimates of the Fair
Taxation Committee said that Fed
eral income tax returns from the
District for 1886 showed an expected
tax revenue of about S13 100000 but
that roughly $1O,0OO,OOO of this tax
was to have come from persons
receiving incomes of $4,000 or more
q year and only little more than
$3,O00,OOO from those having incomes
of less than $4,000 year. Some
of the students believe that either
the rates of the District income tax
would have to be higher than the
average for the States or that the
exemptions would have to be lowered
> If the levy was to produce as much
as s7000,000 year.
The Commissioners Committee to-
day received letter from Mrs. Ed
ward Salner of the Washington
League of Women Shoppers regis
tering support by that group for a
progressive income tax and oppo-
sition to a District sales tax, argu-
Ing that the latter proposed levy
would lay the heaviest burdens or
persons with the smallest incomes