Evening star., 1939-06-16
Re.endchnent
Of D. {. Tax Law
Is Predicted
Short Time Left to
Evolve On Income
Levy May Kill 1t
Just hoto does the proposed
District income tar compare
NTH income t1res in the States?
See tables on page B-1.
By J., A, OTEARY.

~ " EAs " ANAASAs
Re-enactment of the present 10
cal tax structure, including the bus
iness privilege levy, for another year,
with some increase in the Federal
payment, because of the short time
remaining in which to work out a
reasonable income tax appeared a
strong possibility today after a two
hour executive conference between
the Senate District Committee and
the Commissioners Advisory Tax
Committee.
At the outset of the conference
the Commissioners and the Advisory
Committee had filed a report pro-
posing these two alternative sub
stitutes for the drastic House.
approved income levy:
!. A return to the combination
income-sales tax recommended in
January by DR.. Chester B. Pond
and other experts of the Joint
Committee on Internal Revenue.
This would be 2 per cent sales
tax, with food, medicine and rent
excluded, equalized by an income
levy above $4,000.
2. If this cannot be done con-
tinuation of the present tax
program, with some notifications
In the business privilege levy.
No effort was made to reach de-
cisions today and Chairman King
instructed District officials to make
further efforts to obtain more exact
data within the next few days as
to what a revised income tax would
raise, in view of the unusual non-
resident problem in Washington.
Trial Income Tax Suggested.
Senator King also asked District
officials to consider the feasibility
of adding an income tax to the
present tax structure, with very low
rates, as a means of obtaining one
years experience as to the number
OF returns and to throw light on
nonresident difficulties.
Il would prefer a carefully pre-
pared, scientific income tax" Senator
King said following the conference,
but agreed that this would be diff
ficult to work out at this late period
of the session, with the present tax
law expiring June 30.
Senator Overton, Democrat, of
Louisiana said following the con-
ference that continuation Of the
business privilege levy, with an
equitable percentage of Federal pay
ment toward the National Capital,
appeared the most advisable solu-
ton under all existing circum-
stances, in his opinion.
On the eve of the conference the
Louisiana Senator filed as an amend
ment to the tax bill his land-area
formula for determining the Federal
obligation to replace the House pro-
vision making the present $4,000, 900
annual lump sum the permanent
Federal payment.
Senator Overton reiterated follow
ing today's meeting his belief that
the only logical way for Congress
to proceed in writing new tax
structure for Washington is to es-
tablish first the Federal payment
definitely, so that the amount of
local revenue to be raised would be
known. The Senator's formula
based on the land acreage of the city
required for national purposes, would
be 20 per cent, or about $4,000. 600
instead Of the present $4,000, ,000
lump sum.
No Data on Income Tax.
Senator King said it developed to-
day that there is no tangible evil
dence of what we could get from an
income tax" Whether the commit
tee will attempt to keep that tax
principle, however, and revise the
House provisions will await further
meetings next week, after local Off
cials make another effort to obtain
more data.
If the Senate decides to try to
perfect the House income levy
however it. is generally expected
exemptions similar to the Federal
law will be considered. This would
reduce sharply the yield under the
House bill, which allows no exemp-
tion for married persons and taxes
all income above $4,000.
The most doubtful factor in the
income tax picture, however, is
Washington's large proportion of
temporary residents from all parts
OF the country and wage earners
who live in Maryland and Virginia
who would be credited here with in
come taxes paid elsewhere, thus re-
(See D. c. TAXES, Page A-3.)