Evening star., 1938-04-19
D, c, TAX MEASURE
REPORTED BY KING;
VOTE DELAY SEEN
Senate Action May Be Held
Over by Navy Supply
Debate.
BUSINESS PRIVILEGE
CHANGES OUTLINED
Surplus Cushion of $685., 900 Is
in Plan as Presented in
Final Condition.
By ]. A, O'LEARY.


The Districts S5.200,000 revamped
tax bill, estimated to contain sur
plus cushion of $685., 900 for possible
future contingencies, is ready for
Senate action today, but may not be
taken up for several days. Leaders
plan to dispose of the Navy appropria-
ton bill first.
The formal report of the District
Committee, filed late yesterday by
Chairman King, carried the three
levies agreed upon Saturday. namely:
Re-enactment of the gross receipts
business privilege tax. modified to
make it more equitable, s2,000.OOO;
continuation for another year of the
$l75 rate on real estate and tangible
personal property, s3,OO0,Oo0, and the
new tax on beer of so cents barrel,
100000.
AS it came from the House it con-
tanned the real estate and beer taxes.
but fell short of meeting the deficit
as a result of elimination of the pro-
posed income tax by the House.
The major changes in the business
privilege tax are the substitution of a
sliding scale for the fiat rate in order
to measure the tax by the varying
margins on which different lines of
business operate, and the lowering of
the exemption from 81, 1000 to $1,000.
Gross Receipts Basis.
The tax will continue to be applied
to gross receipts, but the rate will
depend on the percentage of spread
between the gross receipts and the cost
of the goods sold. The final draft of
the bill shows that this sliding scale
arrangement will apply only to dealers
in goods, wares and merchandise.
Others subject to the tax, such as
professional and vocational groups
working for themselves, will continue
to pay the fiat maximum rate of four
tenths of l per cent.
AS announced several days ago, the
sliding scale for business houses is
as follows:
Where the spread. or gross receipts,
do not exceed 3 per cent of the cost
of the goods sold, minimum rate Of
one-tenth Of per cent will be applied
to the gross.
Where the spread is between and s
per cent, two-tenths of l per cent.
Where the spread is between and 9
per cent, three-tenths of / per cent
and where it exceeds per cent, four
tenths of per cent. In future, how
ever, the tax would apply to all gross
receipts above $1,000 instead of above
$4,000.
The gross receipts tax includes also
q $40 annual business license fee, and
the committee report reveals that the
lowering of the exemption from $4,000
to $4,000 will add about 100000 to
the city's income from licenses. This
Is because in the current year the law
provided that if persons gross re-
ceipts were less than $4,000 he was
relieved of paying the $40 license fee.
Free Licenses Issued.
According to the committee report,
nearly 10000 such free licenses were
issued for this, the first year of the
gross receipts tax.
The committees report revealed for
the first time a new clause providing
that no license shall be issued or
renewed to taxpayers who have failed
or refused to pay the busienss privi-
lege tax, with penalties. Leeway is
given the Commissioners to set this
rule aside where they find the tax
payer was unable, because of some
catastrophe, to make payment when
due
The report places the city's known
general fund deficit for the coming
year at $4,315,083. In defense of its
action in recommending levies that
will raise a surplus, the committee
stated:
While it would appear that the
taxes proposed by the bill will raise
approximately 100000 more than
appears necessary. as compared with
the estimated revenue deficit of s4,-
3l5,000. it should be borne in mind
that additional relief appropriations
may consume this difference. More
over. should there be any excess reve-
nue. collected in the next fiscal wear
1t would be available in the fiscal
year 1910 for disposition as provided
IN the act of June 2e, 1922"
The committee then quoted the
clause in that act empowering the
Commissioners, in their discretion. to
apply any excess District revenues
either to the citys obligations for the
next year, or to reduction in the real
ana personal property tax rate.
Some local civic leaders fear. how
ever, that the existence of an unex-
pended balance at the end of the wear
might be used in Congress as an areu-
ment to reduce further the Federal
payment toward District expenses.
which already has dwindled, through
the $5,000,000 lump-sum figure, to
only II per cent of the annual appro-
spriations.
Mass Meeting Tonight.
The Citizens Committee on Fair
Taxation planned to continue its bat
tie against the business privilege tax
at mass meeting in the A. B. c. room
VI VIC AAoCIACC oullQlIlS tOIllS1U, Wne0
support will be sought for substitu-
.tion of an income tax for the levy
branded by the committee as "thinly
disguised" sales tax.
N. Arnold Tolles, director of the Tax
Council of the committee, wrote mem
bers of the Senate urging them to kill
the business privilege tax and restore
the income tax section defeated in
the House. He contended the levy
would be passed on to consumers In
the form of higher prices, that it
would fall far short of the estimated
yield and be difficult to collect.
"The wishes and interest of the
vast majority Of the District residents
will be best served by support of the
progressive income tax" his statement
concluded.