Evening star., 1940-05-27
Experts Unable
To Agree on a
D. {. Tax Plan
But Forum Is in
Accord on Need for
More Federal Help

A group OF tax experts, participate
ing in a forum on District revenue
problems broadcast from the Dis
trict Building yesterday afternoon,
couldn't agree on a new plan to Sc
cure additional revenue, but on two
points they were in full accord.
They agreed that a greater share
of the cost of the municipal govern
ment should be borne by the Fed
eral Government and that real es-
tate and personal property are now
being taxed sufficiently.
Three methods by which the Dis
trict might raise the additional rev.
enue needed during the next fiscal
year were suggested by members of
the panel composed of William E.
Hayes, chairman of the Tax Com
mittee of the District Bar Associa-
ton; Seton Darr, former president
Of the Bar Association; Herbert S.
Wood, senior technical adviser to
the Commissioner of Internal Rev.
enue; John E. Mcclure, prominent
tax practitioner, and E. Barrett
Prettyman, former corporation
counsel of the District and one-time
general counsel Of the Internal Rev.
enue Bureau.
Mr.. Darr and Mr.. Wood, the only
ones to agree on a new tax plan,
suggested retention of the present
personal and corporate net income
levy, and vigorously opposed a sales
tax.
Other Tax Plans.
Mr.. Mcclure recommended a plan
embodying a general 2 per cent sales
tax, restoration of the tax on in
tangibles and a two-cent increase
in the gasoline tax, while Mr.. Pret-
lyman advocated the Pond plan,
which calls for a combination sales
income levy.
Declaring he believed an income
tax is the "fairest and most eq-
uitable means" of raising additional
revenue for the District, Mr.. Darr
said he favored that and opposed
sales tax because the levy on in
comes is based on ability to pay,
while the sales tax ignores the tax
payers financial ability and requires
payment by the poor in equal pro-
portion to the rich" He contended,
further, that the income tax is cas-
Ter to collect and is so elastic that
1t can be made to raise as much or
as little as is needed from time to
time.
"1f additional tax burdens are
necessary" he said, "it is far better
that in democracy the burden
shall be shouldered by those best
able to bear it. I'm unalterably op-
posed to a sales tax because expert
ence has demonstrated that it will
impose a heavier burden on those
least able to pay it.
Mr.. Wood said the income tax
should be amended to apply to
every one who actually lives in the
District, except elective officers who
are required by law to maintain
their homes elsewhere. In opposing
q sales tax, he said: ut seems in
credible that legislators should be
so perverse as to turn to plan for
raising revenue that swells idle in
vestment funds by exemption from
taxation and cuts down markets
by taxing expenditures for tangible
goods. submit this is worse than
economic folly. It is attempted ma
tional economic suicide. Let us
have none of it in the District"
Tax Residents and Tourists.
Mr.. Prettyman explained that,
generally, he was an advocate of
an income tax, but that because of
the Districts peculiar situation, he
favors a tax program that would
hit every one-residents, non-resi-
dents and tourists. He suggested
an income tax on the higher brack-
cts incomes above 100000, a S
per cent tax on corporate net in
comes and a per cent sales tax.
He declared that when an attempt
Is made by the District to raise
money by the income tax method,
many difficulties are encountered.
Persons domiciled elsewhere pay
their tax in their home towns and
take credits against the District
tax. and the District gets nothing
from them. In addition, the District
either must have an enormous force
to collect the tax or simply let those
who want to pay it, land that is
bad government anywhere" he said.
Contending that an income tax
invites all sorts of ways to delay
collection, Mr.. Mcclure proposed a
sales tax, reimposition of the in
tangible property tax and 2-cent
increase in the gasoline tax as a
program 80 simple to administer
rs to prevent tax dodging."
In the discussion that followed
presentation of the formal address,
Mr.. Wood declared he could see no
reason why a person who lives and
makes his livelihood in the District
should be exempt from taxes based
on "domicile" simply because he
maintains a voting residence" in
his home State.
The panel discussion was the first
of a series of four arranged by the
Public Relations Committee of the
bar association. It was broadcast
by Station WJSV.