The Daily Alaska empire., 1945-02-22

Alaska needs such a tax, ''Is it fol revenues?' the witness declared tha forecast of the revenue to be de. rived under the bill had been pre-. pared. In reply to Senator Whaley he stated that it was estimated that the net income levy would return s630,000 annually, in additiona. revenue to the Territory. He quail fled the estimate by declaring il to be predicated on an assumption of the difference between conditions in Alaska as they are now and as they were in 1941, the date of the Hast accurate available data. Wher it was brought out that 1941 was 8 far better than normal year in the Territory, he was asked for estimates based on such years as 1940 and 1889, Prof. Harsch declared that he had made no analyses for any years previous to 194l.
 When challenged by Senator Shattuck as to the discrepancy be- tween the revenue estimate he had just given and his figures given two weeks previously, Prof. Harsch em- phasized that at the former hear ing he had been careful to set his estimates at definite minimum and that at that time they had not been properly adjusted to the 194i basis
 Senator Shattuck came back with the question whether, as a tax au- thority, in light of the very great increases in the Federal income in recent years, did he not believe it would be better for the Territory to run along for the present with it's tax system as it? To this Prof. Harsch said that, if it was thought that a tax based on ability to pay should be part of the tax struc- ture," he believed the net income tax justified, notwithstanding any revenue aspects.
 Various Angles
 Further questions by oenator Coffey drew replies that: There is no credit for earned income provided in the bill; that 0here is provided a de- ducticn fer medical expense, similar to the Federal; that the seasonal worker taxing system might be con- sidered an "occupational tax"
 Senators, Whaley and ' Coffey pointed out the differentials in liv- ing costs, running as high as 81 per cent. obtaining through the four Judicial Divisions and three differ ent types of economies of Alaska. Is it equitable that the tax rate be the same everywhere? they ques- tioned. Prof. Harsch's reply was that very substantial living cost varia- tions exist in some States having the tax, also; that wage structure differentials should take care of in equities. Also, he said, the bill pro- vides personal exemptions double the Federal to help care for increas- ed living costs. It was pointed out by the Senators that many workers, such as Government employees, earn the same throughout the Territory.
 Asked by Senator Don Carlos Brownell is he thought the Terri tory's present tax structure up-to- date or adequate, Prof. Harsch de- clared Alaska's present sources of revenue differs widely from those in most States; that licenses are a big part of the system here Question ed as to his opinion of the present tax load on Alaskans, he replied hat taxes in Alaska, per capita. are very low in comparison with most States.
 m answer to query by Senator Gordon, the Professor stated that if the proposed bill should become law, some present taxpayers might find their taxes reduced. -aaf
 Other Taxation
 Senator O. D. Cochran, who pre- sided at the hearing, asked: Prof. Harsch, do you know of any part of the United States outside Alaska where the tax burden on the aver age individual is so small = is not the tax burden in Alaska the least you know?" To which the reply was: "Thefe are certainly very few direct taxes on the individual, for Territorial purposes-the condition is nearly similar only in the State of Nevada Direct contributors from Alaska residents are now at "a minimum rEa
 Quiz By Robertson
 First member of the gallery to en. ter into the questioning was Attor- ney R. E. Robertson, of Juneau He asked as to what would be the pol icy under the bill in fixing limits on salary deductions allowed officers of corporations. Answered that reasonable salary payments would be deductable as business expenses, he asked if the Supervisor of Taxation, provided in the bill, would have the authority to fix what would be con- sidered reasonable salaries, as in the