Evening star., 1939-03-13
Not Openly Arrived At

Some of the confusion over
whether the proposed consumers
sales tax for the District should be-
gin with purchases of twenty-five
cents or begin with purchases of
thirteen cents might have been
avoided had the municipal officials
who are members of the Commission
ers' Tax Advisory Committee been
more careful to consult the citizen
members of this committee about
their final recommendations.
Under the draft of the bill pre-
pared by members of the staff of the
Joint Committee on Internal Reve-
nue. Taxation, the retail sales tax
which, by the way, is Joined with an
income tax on earned income over
$4,000 and investment income over
$5OO-exempted from the sales tax
food, medicine, specially taxed COM
modities (such as gasoline) and, as
originally proposed, meals under
seventy-f1ve cents in restaurants.
When it was written, however, the
legislation removed the exemption on
meals in restaurants and substituted
an exemption from the tax of all sales
under twenty-five cents. This was
approved by a majority of the Com
missioners' committee.
The twenty-five-cent exemption,
however, was revealed by study of
laws in the twentythree States and
New York City where sales taxes are
imposed to be unique. And the more
study given to it the more inequitable
it seemed in its effect on retailers.
For the District would collect the tax
from the retailers, the levy being two
per cent on gross receipts, while the
consumer would not pay the tax on
purchases under twenty-five cents.
The retailers gross receipts on which
he is taxed would include all sales
under as well as over twenty five
cents.
1t was suggested to municipal off,
cials that the practice in the States
be followed and the exemption low
cred to thirteen cents, the argument
being that the thirteen-cent level has
been shown by experience to come
nearest equalizing the amount of tax
collected by the merchant from con-
sumers and the tax-two per cent of
gross receipts-paid by the merchant
to the tax collector. While some of
the municipal officials who are men,
bers of the Commissioners commit
tee approved the change from twen-
ty-flve to thirteen cents, the citizen
members Of the committee as we'll as
the taxpaying citizens of the District
of Columbia were left in the dark
about the change until Mr. 10 Nor
gan, impressed into service as a
spokesman for the Commissioners
committee, told about it on the stand
at the House committee hearing.
The change may be perfectly prop
er and In line with accepted practice
elsewhere. Failure to make the
change might shift substantial por-
ton of what is, frankly, consumers
tax, to the retailers who are charged
with collecting and paying it. There
are alternatives which should be con-
sidered and which may be found to
be more acceptable. But the manner
in which the change was made at
the District Building left the un-
pleasant though doubtless erroneous
impression that somebody was trying
to pull the wool over the taxpayers
eyes. There ought to be lesson in
this to the municipal officials, the
moral being that as long as the tax
payers are going to have to pay the
tax-no matter in what form it is
dished up to them-they should be
kept Informed about what is going on.