Evening star., 1938-04-17
BY J. A. O'LEARY.

Dy ~ -h' " AA<thAsA
Senate action probably will be
sought Tuesday on the local tax bill.
still estimated to contain surplus
cushion of approximately 100000
above the existing deficit as agreed
on by the District Committee yes
terday in form calculated to raise
about s5.40O.000
A last-minute decision brought the
total down Sl,OOo.OOO when the COM
mittee announced approval of the
deduction of tangible personal tax
payments in computing the gross re-
ceipts business privilege tax.
Although the completed draft Of the
measure will not be ready before to-
morrow. this is believed to have been
the only important change made yes
terday in the earlier tentative draft,
and was a partial recognition OF tile
plea of trade and civic leaders not
to impose large surplus tax burden
IN anticipation of possible future
needs
S2,000.000 Original Surplus.
As the measure stood Friday night,
indica tions were it would have raised
close to s6,500,000. or about s2.000,000
more than the existing deficit Of $4-
100000 on the basis of appropriations
made to date.
The committee apparently decided
to leave part Of the. cushion in the
bill in case the new Congress in
January makes an additional local
relief appropriat following the un-
employment investigation now getting
under way.
1t is understood that in considering
the tentative draft, with its much
were contending for tax program of
more permanent character that would
anticipate not only relief but other
possible future needs.
Chairman King indicated yesterday
It was decided that in view of heavy
tax burdens, Federal and otherwise. it
was better not to raise more than
Is necessary at this time. except a
reasonable margin for contingencies.
S2.2o0,000 From Business Tax.
Counting House provisions and
Senate committee changes to date,
the tax features and estimated yields
are:
Revised business privilege tax. with
sliding scale of rate. S2.2O0,OOO.
Continuation of sl75 rate on real
estate and tangible personal prop
erty for another year, S3,000,000
New tax of SO cents per barrel on
beer. 100000.
The Senate committee announced
yesterday it has substituted one tax
appeals officer, at $500 year, for
the three-man board of tax appeals
provided for in the House bill.
AS the bill came from the House it
carried only the beer tax and con-
tinuation of the 25-cent increase in
the old sl.50 real estate rate. ELM
ination of the income tax on the floor
OF the House left the measure short
Of meeting the deficit by about $780,
000
The Senate committee decided sew
eral days ago to re-enact the business
privilege tax to close the gap, and
then set out on the task of revising
1t with the announced purpose of
making it more equitable
Tax Scale Retained.
The main step in that direction was
to replace the fiat rate of two-fifths
OF per cent on gross receipts of all
concerns with graduated scale, rang
ing from one-tenth to four-tenths of
per cent. The tax would still be
applied to gross receipts, but the rate
would be determined by the percent
age of spread between the cost of the
years stock of goods and the gross
receipts. This sliding scale feature of
the tentative bill was retained at yes
terday's meeting, it was announced.
1t developed several days ago, how
ever. that the committee had en-
bodied three other changes in tenta-
tive revision which were destined to
boost the probable yield from the gross
receipts tax next year to a possible
total of $3,300,000. This would have
been far more than the yield for the
current year and accounted for a sub
stantlal part of the surplus which
prompted a delegation of spokesmen
for various trade organizations to urge
the committee Friday night to avoid
what they felt was an excessive and
unwise surplus cushion
The three steps that broadened the
gross receipts tax were; Proposed re-
peal of the deduction allowed this year
for tangible personal taxes paid by
business concerns; lowering of the
gross receipts tax exemption from
$4,000 to $1,000, and definitely ap-
plying the gross receipts levy to rental
income from real estate.