Evening star., 1940-03-17
Seal Studies
Sales Tax Plan
Inequities
Drafts Amendment
To Give D. 6. First
Claim on Incomes

SOUt UCCSOH GuoL M O7tUuH
raised doubts Uhether income tar
can be collected from persons
worktng tn the District but hold
ing legal, or Dottng, residence
elsewhere. Fiscal Affairs Sub
committee of House District COM
,naittee, busy ,Dfth 1874 D. c. rep-
enue program, on Thursday re-
ported by 3-2 Dote sdles-tncon,e
leuy recommended in Pond tar
study more than year ago.
Corporation Counsel Elwood H.
Seal announced last night he in
tends to seek changes in the pro-
posed new dual sales-income tax
plan for the District to clear up
inequities resulting from the hasty
preparation of the bill. particu-
larly in regard to application Of the
sales tax to purchases under 10
cents.
Under the proposal as it now
stands, Mr.. Seal pointed out, child
would have to pay sales tax on
l-cent stick of candy.
oC11CI oCNCloElAlCllto III tllC LID
trict tax situation included:
Mr.. Seal yesterday drafted an
amendment to the local revenue
act which would give the Dis
trict the first levy against in
comes earned in the District,
whether by residents or non-res-
idents. This was being done
at the request of Representative
Bates, Republican, of Massachu-
sets, leading opponent of the
sales tax on the Fiscal Affairs
Subcommittee Of the House Dis
trict Committee.
The House District Committee
arranged to consider the Fiscal
Affairs Subcommittee proposal
for adoption of the sales-income
tax levy at its regular weekly
meeting tomorrow at 10:30 am.
The full committee now holds the
fate of the plan. Committee ap-
proval would send the plan to
the House for a vote on the
next so-called District day."
April 8.
Urges Claf1ncat1On.
Mr.. Seal said that obviously there
are some provisions in the proposed
tax program that need "clarifica-
ton" He mentioned specifically the
provision that would impose a 2
per cent tax on all retail sales. This,
with personal income levy on
earned incomes in excess Of $4,000
and unearned incomes in excess Of
$500, is the basis Of the tax plan
drawn up to substitute for this year. 5
income tax.
No formula is set up In the new
tax bill, according to a committee
print" which came of the press yes
terday, as to the detail method Of
taxing retail sales. This procedure
Is left entirely to the discretion of
the Commissioners.
Mr.. Seal explained, however, that
under the bill as it stands the Com
missioners could prescribe the use of
q mill tax either in token form or
In script form to be collected on q
1-cent sale.
But" he admitted, there must
be some change about 2-cent sales,
especially in view of the fact that
person who buys a 10-cent article
would not have to pay any more in
taxes than child who buys q l.
cent stick of chewing gum"
Retailer Is Responsible.
The committee print" of the bill
revealed that unless the retailer i'm.
poses the tax on the 1-cent sale,
he ultimately would have to make
up the tax revenue himself from
his sales, because the measure pro-
| vides:
That the retailer shall collect the
tax and pay it to the District on the
basis Of gross receipts. If he does
not collect the tax on penny sales
he obviously would be forced to
suffer loss. On the other hand,
If he had nine penny sales, and
collected a mill tax on each sale,
he would make a profit when he
| pays his tax to the District on the
basis Of gross receipts.
Sales under Is cents caused much
concern before the committee last
year, when it considered a similar
sales tax program. The original
combination sales-income tax plan
advocated by DR.. Chester B. Pond
New York tax expert, who made q
survey of the District tax struc-
ture for the House and Senate Dis
trict Committees, would not have
tapped sales under Is cents. Even
then proprietors of 10-cent stores
and other places where sales are
10 cents or less, protested because
they would have been forced to pay
the sales tax to the District on the
| (ContinI,ed an PAGE A.16 Coi,1n,n 1 \