Evening star., 1940-03-26

SS~~
Income TaxHike
Revision to Include
CIorificotion of Those
Exempt Also Hinted
BACKGROUND
House District Committee re-
ported out com bination sales and
income tar bill after District
Court OF Appeals, in recent de-
cision. held that a Washington
Federal Dorker could not be re-
quired to pay intangible property
tar it he maintained a legal resi-
dence in some State. Congress
sional leaders believed that this
decision. it upheld by Supreme
Court, Mould apply equally to
present income tar laU, Dhich
supplanted former intangible tar.
Belief that it may be necessary to
revise the present District income
taxes, perhaps as to definition con-
corning those subject and perhaps
to provide for increased rates, was
suggested today by, the Commission
ers after they had consulted with
key District officials on the Districts
new financial crisis.
Earlier, the Commissioners had
said that whether it would be neces-
sary for them to increase the Dis
trict's SITS real estate tax rate,
effective July l, would depend on
whether the District received. by
October Is. as much as $1,000 900
from the Districts present personal
and corporate income levies. Mai,
Daniel j. Donovan, District auditor
and budget officer, was skeptical as
to whether that total would be
achieved.
The Commissioners took no i'm
mediate action, but indicated that,
If necessary. they would be pre-
pared to submit a proposed new
District tax program to Congress at
the opening of the session next jan
uary, in view of the refusal of the
House yesterday to act favorably on
the proposal for combination of a
2 per cent sales tax. with an income
tax on the higher brackets. as a SUBJ
stitute for the present income levies.
Program Twice Rejected.
In their formal statement the
Commissioners said:
In 1889 the Commissioners SUBJ
mltted to the Congress tax pro-
gram which was believed to be suit
able for the District, and which,
with the present Federal rate of
contributions, would have raised
ample revenue for the operation
and development of the Nations S
Capital. The Congress has rejected
this program twice and has clearly
indicated preference for the pres
ent form of tax structure.
1T is believed that it will be nee
essary to revise the present tax law
III order to raise sufficient revenue
to meet the requirements. The in
come tax may have to be revised as
to definitions and possibly as to
rates. The proper course to pur-
sue, particularly as to the income
tax. can better be determined after
receipt and analysis of income tax
returns due to be submitted by
April Is.
THE present tax law may not
raise sufficient revenue to meet the
budget submitted to ana now under
consideration by the Congress. While
the recent act authorizes borrow
ing from the Federal Government
to meet cash requirements due ia
deferred income tax payments. the
act of June %. 1922, requires the
Commissioners 10 fiX such tax rate
on real and personal property
which, together with other reve-
nues, will meet the payment Of ex-
penses under appropriations made
by Congress.
Depends on Revenues.
whether or not an increase in
the real estate and tangible personal
property taxes will be necessary
depends on the revenues produced
by the present law and the appro-
priations to be made by Congress.
ut is proposed to analyze the
forthcoming income tax returns and
to formulate a revised tax program
for submission to Congress on the
first day of its next session, If
such action is found to be neces-
sary."
Following today's conference with
two key District officials, Commits
Sioner Allen said that if the re-
turns from the income levies
amounted to as much as $3,2OO,OOO
even though no further tax legis-
lation were passed at this session
he did not believe it would be nee.
essary for the District to boost the
real estate tax rate above the pres.
ent figure.
Report on Receipts.
Tax Assessor Edward A. Dent re.
ported today that his latest report
on receipts from the income levie,
showed the payment of a total Of
something more than $682, 900. o.
this $473,000 has come from thu
personal net income levy, on which
the District has received nearly
$4,000 taxable returns and more
(See D. c. TAXES, Page AID
Al -