Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-04-12
Subcommittee Backs
Combined Income,
Sales Tax Bill
House District Group
Expected to Act on
Measure Monday

The Districts new revenue bill,
the heart of which provides for a
combination l per cent sales tax and
tax on earned income in excess
of $4,000 a year, was formally ap-
proved today by the Fiscal Affairs
Subcommittee of the House District
Committee. Action was taken be-
hind closed doors.
Representative Nichols, Democrat,
Of Oklahoma, chairman Of the sub
committee, announced, however, that
no changes had been made in the
original bill as introduced by him
two days ago.
Mr.. Nichols plans to place the
bill before the full District Com
mittee at regular meeting Monday.
Representative Dirksen, Repub-
lican, of Illinois. was the only sub
committee member absent when the
bill was approved. He left Wash
ington more than week ago, an
nouncing his opposition to any tax
program that included sales tax.
Other members of the subcommit-
tee are Representatives McGehee of
Mississippi and Schwert of New
York, Democrats, and Bates, Re-
publican, of Massachusetts. It is
understood Mr.. Bates voted against
the sales tax feature in the bill and
urged as a substitute a graduated
personal income tax with exemp-
tons lowered to the present Federal
income tax base.
$6,371,752 Deficit Estimated.
10 v. Morgan, sole member of the
District Board of Tax Appeals, and
Corporation Counsel Elwood H.
Seal were closeted with the SUBJ
committee during its consideration
of the bill Mr.. Morgan has served
assan adviser to the subcommittee
during its long struggle with the
new tax program.
The new tax plan, Chairman
Nichols estimated in a statement
he issued at the close of the execu-
tive meeting, will produce Sc, 1865, 900
in additional revenue which, he said,
would balance the 1910 budget on
the basis of appropriations carried
in the supply bill for the new fiscal
year as it passed the House and
leave small surplus of about $94,-
600. He calculated the prospective
deficit in the coming fiscal year at
$6,371,752.
His estimates of the revenue yield
of the bill are the same as those
of Maj. Daniel j. Donovan. Dis
trict auditor and budget officer.
They follow:
l. Sales tax, $2.50O,OO0.
2. Five per cent corporate net
income tax. 100000.
3. Personal net income tax, ST.
100000.
4. Automobile parking lot tax, $685.
600.
S. Revision of utility taxes, $780,
900.
6. Pro-rated motor vehicle tax,
$4,000.
Bill Permits Rate Increase.
Mr.. Nichols said his estimates
of the probable deficit of $6,371, 752
are based upon a $3.50 real estate
tax. The present rate is SITS, but
is due to return to $50 at the
close of the present fiscal year
June 30.
THE bill allows the Commission
ers to raise the rate if needed 20
$l75," said Mr.. Nichols statement.
This allows a cushion and will give
the tax system that elasticity which
it needs and will prevent perennial
worry and work of drafting tax leg
islation for the District of Column
bia.
TN making the above estimate Of
revenue for the fiscal year ending
June 80, 1910, the intangible personal
property tax and the business
privilege tax have been dropped.
THE foregoing statement does not
take into consideration such increase
in the appropriation as the Senate
may make and which the conferees
may agree upon"
The business privilege tax on gross
receipts is scheduled to expire auto
matically June 80. The new revenue
DILL provides for repeal Of the in
tangible personal property tax which
is now producing about So zoo, 900 .
year. The business privilege tax
Weld hAk been ahoaaf ~ IN mn