Evening star., 1939-03-09
BY JAMES E. CHlNN.

~ S1AAAkS As SA1AANANs
10 " Morgan, the Districts one
man Board of Tax Appeals, made
an unexpected disclosure today be-
fore tho Fiscal Affairs Subcommittee
of the House District Committee.
that he had made number of enajor
alterations in the proposed new tax
program without the knowledge of
the experts who drafted it or the
Citizens Advisory Committee on
Taxation which approved it.
The principal change would lower
the exemption on srticles affected
by the retail-sales tax from. Is cents
to 13 cents.
L. A. Carruthers, President Of the
Federation of'Citizens' Associations
and member of the Commission
ers' Advisory Committee on Taxa
tion, spectator at the hearing on
the tax bill, manifested indignation
over the development.
Mr.. Carruthers said lie had reg
istered hiS dissatisfaction to Com
missioner Hazen over the procedure
followed by Mr.. Morgan il. making
"fundamental' changes in the tax
plan without first comforting with
the Advisory Committee on Taxa
ton. AS result of that complaint.
he said, Commissioner HaZen prom
ised to reconvene the committee.
Whole Picture Held Changed.
DR.. Chester B. Pond, New York
tax expert, who drafted the new
program, said the alterations made
Dy Mr.. Morgan change the whole
tax picture
The changes were revealed when
Chairman Nichols unexpectedly
called Mr.. Morgan to the witness
stand to explain some "administra-
tive alterations in DR.. Ponds draft
Off, proposed tax bill which appear
In the committee print of the tax.
bill.
Mr.. Morgan said he made the
changes on his own authority.
The retail sales tax under the
Pond bill would not have applied
to articles selling for less than Is
cents. 1t also prescribed that in
the payment of the tax fractional
part of cent should be disregarded
unless it amounts to one-half cent
or more, in which case it should
be increased to l cent.
Graduated Schedule.
Mr.. Morgan's change provides a
graduated schedule as follows: One
cent on sales amounting to 13 cents
or more, but not exceeding 81 cents;
2 cents on sales amounting to SO
cents or more. but not exceeding
SO cents, and 2 cents on each even
dollar, plus the above rates in excess
of even dollars.
Most Approved Plan.
The subcommittee was told by Mr..
Morgan that the most approved sale
tax plan is to require a merchant
to report the total gross receipts
and also the amount of sales tax
collected and to pay a tax of 2
per cent on gross receipts, or the
sales tax, whichever is greater. In
order that the burden shall not fall
too heavily on the merchant, he
explained, the line must be drawn
between cent and Is cents.
Another major change made in
the Pond bill would make the pro-
posed tax on earned incomes of
$4,000 or more and unearned in
comes of $500 or more retroactive
to include the 1888 taxable year.
The Pond bill would make the tax
applicable to the 1899 taxable year.
Mr.. Morgan said if that change is
approved tax returns would be filed
and the first installment of the tax
paid in October this year, and the
second installment would be payable
in March next year. He also said
adoption Of this plan would relieve
merchants of paying the business
privilege tax for the 1888 taxable
year. The business privilege tax, in
cidentally, will automatically expire
June 80.
Parking Lot Clause Changed.
Mr.. Morgan also made a change
in the phraseology of the parking lot
tax provided in the Pond program
to prevent operators of lots on either
Federal or District owned property
from escaping the proposed per
cent levy on gross receipts through
a technicality.
Most of the other changes made
by Mr.. Morgan were relatively minor.
One, for instance, would exempt
from the sales tax food products for
human consumption" off the prem
ises. The Pond bill merely said the
exemption should apply to food
products" for consumption off the
premises Mr.. Morgan said he in
serted human consumption" be-
cause otherwise the exemption would
apply to food purchased for animals.
Chairman Nichols instructed Mr..
Morgan to prepare for the subcom-
mittee a report completely detailing
the changes made by him.
Rufus S. Lusk. president of the
Washington Taxpayers Association,
(See D. C., TAXES, Page A-5.)