Evening star., 1938-04-07
D. c. INCOME TAX
FOES WILL CARRY
BATTLE TO HOUSE
Jobs of Nearby Residents
| in Capital Stir Up
Opposition.
EXEMPTIONS PROVIDE
| EMBARRASSING POINT
Beer Tax and $1.75 Realty Rate
Called for in Report of
Committee.
BY JAMES E. CHINN.

BY JAMES E. CHINN.
Opponents of the proposed District
income tax made preparations today
vigorously to fight the plan when it
comes up for consideration in the
House Monday.
Chief opposition is expected to come
from the Maryland and Virginia dele
cations because of the vital effect it
will have on thousands of their own
constituents who work in Washington.
A number of members from other
States also are expected to fight the
plan for political reasons-members
who regard the specific exemptions Of
select group. including themselves,
from payment of the tax as political
dynamite. especially in an election
year.
Fear Constituent Quiz.
These members are said to feel GER
tain that vote against taxing their
own incomes will place them in an
untenable position in the forthcoming
campaign If constituent should ask:
Why did you vote to tax the salaries
of virtually everybody who works in
Washington except yourselves? You
make $4,000 year. A vast majority
of the others who work in Washing
ton do not earn $4,000 a year"
One of those who believes it would
be politically fatal for a member of
the House to exempt himself from
taxation is Representative Kennedy,
Democrat, of Maryland, an active
member of the House District Com
mttee.
Il think the best contribution a
House member can make to his politi-
cal campaign for reelection this year"
he said would be a vote to tax his
own salary. 1 am willing to pay a
tax to the District on my salary"
Agreement Silences Kennedy.
Mr.. Kennedy, however. will not be
in position to oppose the exemption
Of members of Congress on the House
floor because of a so-called gentle
mans agreement" among members OF
the District Committee to support the
income tax. The agreement was made
united front to the House during de-
bate on the tax plan.
The House last year refused to even
consider a local income tax because it
proposed to impose the levy on the
salaries of members of Congress This
year the members were purposely ex-
empted to remove this opposition. But
conditions have changed in the last
IL months and, it was pointed out,
this is an election year.
The income tax plan is the very
heart of the new 1889 revenue bill
which the District Committee reported
favorably late yesterday after carefully
scrutiniZing the work of the Fiscal Al
fairs Subcommittee which framed it.
Only few relatively minor changes
were made in the bill as it came out of
the subcommittee.
Beer Tax Cut.
The most important amendment,
perhaps. was one reducing the pro-
posed local tax on beer from IS to so
cents barrel. The committee had the
fore it reached final decision to fix
the tax at so cents. First, it tentatively
removed the tax altogether. Then it
restored the levy at the rs cents rate.
Ultimately so cents was agreed on as
compromise.
In final form the bill is estimated to
yield $5,200,000 in additional revenue
in the coming fiscal year to meet
budget deficit in this period now fig
ured at S4,500,000 by Mai. Daniel ].
Donovan, auditor and budget officer.
Two weeks ago the anticipated deficit
was placed at s3.7O0,oOO, but Mai.
Donovan explained the amount has
been raised as result of recent re-
quests of the Commissioners for de-
ficiency appropriations, plus the fail
ure of the temporary business priv
ilege tax to produce but S20O0.0OO of
an estimated $3,000,OO0 in additional
revenue.
If the bill is enacted into law in it's
present form, the District should have
surplus of 100000 in it's treasury at
the close of the coming fiscal year, un-
less deficiency appropriations are pro-
vided for relief or other purposes.
Credit Would Cut Revenue.
The tax-producing features of the
completed bill, and the amount of rev.
enue they are estimated to yield,
follow:
Income tax S5O0O,OO0. But credit
is to be allowed against the income
tax for Intangible tax payments, re-
ducing the gain from this source to a
net of s2,O0O,OOO.
Continuation of the Sits real estate
tax rate t25 cents higher than the
former rate), 100000
A so cents tax on beer per barrel.
100000.
Other features of the finished bill
provide:
Outright repeal of the long in
operative substantive law requiring the
Federal Government to pay 40 per cent
of the expenses Of the District govern
ment.
2-Extension Of the automobile tag
registration year to March /.
keCouStiOIl III LIE minimum regis.
tration fee on automobile trailers from
SIS to IS.
ECreation of a board of tax ap-
peals of three members with salaries of
$4,000 year for the chairman, and
$1,000 for each of the two others.
5-Continuation of the enforcement
provisions of the business privilege tax
law which expires at the close of the
current fiscal year June 80.