Evening star., 1946-08-18
Sales Tax Opponents
Must Find Substitute
Critics Should Not Come Empty
Handed to d. G.. Tax Hearings
By John w. Thompson, T.

I1dIlueu 10 -. ~. ak Hearings
By John W. Thompson, Jr.
Those who are sharpening their axes
for the proposed per cent sales tax at
the September is public hearing called
by the Commissioners would do well to
be armed also with a workable substI-
tute.
The financial situation facing the Dis
trict in the next few years Is too serious
for the Commissioners simply to cut the
heart out of the SIT ,750, 900 program pro-
posed by their Special Tax Committee
without an equally productive alterna-
tive.
The sales levy is calculated to produce
better than half of the total amount.
Any substitute or group of substitutes
which will not raise this cannot be con-
sidered an alternative
1t is an interesting fact that the Spe-
cial Tax Committee headed by Corpora
ton Counsel Vernon E. West, lifted
virtually word for word from the 1883
District revenue study by New York Tax
Expert Chester Pond the committee sales
tax recommendation with its companion
use tax covering articles bought out
side the city which would be sales tax
able if purchased within.
The Pond report also had this to say
after analyzing tax reports of the 20
years preceding his investigation:
"As one peruses these reports and the
numerous public hearings on the subject
OF District taxation, one is struck by
the wide disagreement as to funda-
mentals. Too often personal
prejudices prevail over objective judg-
ment. Reasons are but rationalizations
called forth by the desire to escape tax
alton. In recent years the contending
forces have divided into two diametrical-
ly opposed camps, the sales-tax group
and the income-tax group. Failure to
realize that under certain circumstances
each of these taxes may have it's place
IN tax program has been one of the
chief difficulties in uniting the two fac
tions.'
And DR.. Pond had this piece of advice
for the community: Emphasis should
be shifted from the individual tax to
the system, for balanced tax system
may result from a blending of taxes
which together comprise an equitable
program"
= What this community needs is mod
ern flexible tax structure which dis
tributes equitably among those who
enjoy city services the burden of the
cost OF those services with due cognizance
| of the principle of ability to pay. In
separable from this. Of course, is an
equitable fiscal relationship with the
Federal Government to complete the
financial picture.
| Such system would have a ready
| framework of levies with rates adjust
able up or down according to the finan-
cial needs of the city and fair per
capita burden.
Last week Assessor Edward A. Dent
disclosed that real estate valuations for
tax purposes are going to be raised
pretty generally on all types of property
in the city. The boosts have no rela-
ton to the municipal financial plight,
but are simply in line with the law
which requires the real property tax
rate of $1.75 per hundred to be applied
| to full value assessment and mo less"
| But the S2,500000 to S3,o00,000 addi-
| tional taxes to be brought in beginning
| in September, 1947, will be a welcome
breeze for the becalmed city income.
| The city now obtains about $24 100000
| from its real estate tax. The estimated
| increase may bring this as high as
s27,000,000, or about as much as all the
other local taxes together can raise for
| the general fund. The fund now re-
ceives, exclusive of the Federal pay
ment and any accumulated reserve,
something more than s500Oo,O00 an
| nually.
| There is no better evidence than this
| OF the truth of DR.. Ponds remark eight
| years ago: The District has continued
| to rely on forms and methods of tax
| alton belonging to the last century"
| At that time the only evidences Of
modernity DR.. Pond could find in Dis
| trict tax structure were the inheritance
| and estate taxes established two years
before. And since the report, which
recommended a combined sales-income
levy, only the personal and corporate
income tax levies were adopted in the
currently prevailing revenue act Of 1899
the former so hamstrung by the
domicile clause that less than 100000
of the local citizenry have been pay
ing the mild assessment.
| Efforts can and must be made to
widen the base of the personal income
tax by removing the domicile clause
| and making actual residence the basis
| for payment.
| Certainly raising the low rates Of the
| present tax, even doubling them, would
not produce the money required by the
| community in the opinion of District
| officials On the other hand, it would
| increase the inequity of the present sit
| uation where few are contributing for
| the benefit of many and the few are
selected, not for ability to pay, but be-
| cause Of don1icile.
| 1t is inconceiVable that any tax pro-
| gram sought by the Commissioners
would receive the unanimous approval
| of all segments of the community. Yet
| it is not too much to believe that the
| city heads will give careful attention to
| the opinions and wishes of civic spokes-
men at the hearing and that whatever
| they decide to forward to Congress next
year will represent an honest effort to