Evening star., 1938-09-11
Tax Survey
Continued From Page BID

ond would be to assure a system that
would produce revenues to meet more
adequately the growing needs Of the
District from year to year.
Experts working for the Joint COM
mittee, while not announcing any in
dividual conclusions at this stage, have
indicated desire to. promote the
ability to pay theory in development
OF a revised local tax system.
Lump Sum Not Considered.
How deeply the tax survey group
may touch on the question of the size
Of the Federal payment toward ex-
penses OF the National Capital has not
yet been determined. Dr.. Pond said
the subject no doubt would be raised.
since the present s5,OoOOO0 lump sum
payment Is a part OF the revenues of
the District. He voiced doubt that
the survey report would recommend
any change in the size of the payment.
however. He questioned whether it
would be within the proper scope of
the survey staff to suggest to Congress
what It should pay toward National
Capital costs. under the wording of the
survey appropriation.
The most definite indication given
30 far as to the survey experts trend
OF thought was seen in reports that
agents OF the Joint Committee on In
ternal Revenue Taxation were giving
reconsideration" to suggestions for A.
combination Of limited sales tax and
curtalled income tax plan.
Admittedly. this idea was broached
IN the beginning as something of q
trlal balloon. However. reports persist
that agents OF the committee are giving
1t serious study, though all the while
inviting public and expert comments,
There are reports that no major OBJ
,ections so far have been encountered,
Members OF the survey staff, however.
expect objections will be raised before
the study is ended, and all responsible
offlcials explain they are not yet COM
mitteed to the details of any plan.
Income Tax Rejected,
Congress so far has failed to seize
on either fortnight sales tax or an
income tax as the solction to the
District problem. The House has def
nitely rejected the income tax idea
because OF numerous practical and con-
stltutlonal questions involved, par
ticularly If it is to be applied to the
100000-odd Government workers. and
If these are to be exempted. it has been
argued. the tax would be selective and
discriminatory.
With equal promptness, protests
nave been raised in the past that a,
fortnight sales tax would be a de-
partufe from the theory that the tax
should be based on ability to pay.
The suggestion of a possible COM
blnation of curtailed income tax with
a curtailed sales tax is offered as a
means to avoid major objections to
either as a separate plan, since some
experts are convinced that Congress
would approve neither as a separate
entity.
Under the tentative suggestion now
under study, the income tax side of the
combination levy would not be ap-
Piled to wage earners, but rather linn
1ted to business and professional re-
turns and investments. The sales tax
side OF the plan would be applied gen.
orally, but would be limited in force,
although applied to wage earners and
all other residents of the District as
well as to tourists and persons coming
into the District for business dealings.
The rates for the suggested combina-
ton plan have not been specified, even
IN the tentative outlines
End of Business Tax Hope.
1t Is suggested in one responsible
quarter that adoption of such a plan
might make possible abandonment of
the business privilege tax, adopted in
1887 as a stop-gap measure, and con-
tinued in the Revenue Act of 1898 In
considerably revised form. The new
plan. 1t is suggested, also might make
possible abandonment of the personal
property tax on intangibles which has
been much criticized over period of
years as one impossible to enforce
equally on all holders of stocks, bonds
and other intangibles, depending on
the varying honesty Of tax returns.
DR.. Pond, who has been at work on
the tax survey for nearly two months,
revealed he had completed one phase
OF his work, survey of what now con-
etitutes the District tax structure.
The tentative draft Of tHh phase Of