Evening star., 1946-10-06
District Tax Bill
With Sales Levy
Will BeDrafted
Some EorIy Proposals
Moy Be Altered in
Final Measure
By John W. Thompson, Jr.

by Jonn w. thompson, ~.
Corporation Counsel Vernon
e. West has been directed by the
Commissioners to draft a pro-
posed District tax bill, including
a 2 per cent sales tax, for early
to the Bureau of the
Budget, it was learned last night.
The draft Is being undertaken, it
is understood, in response to urg-
ing by Budget Officer Walter L.
Fowler that the suggested legisla-
ton go to the bureau as soon as
possible.
While the city heads have not
disclosed their approved program in
detail, 1t is expected to be a modi-
fed version Of the original seven-
point schedule of new and in
creased taxes, recommended to them
by their special tax committee
headed by Mr.. West, and estimated
to yield $17,750,oo
Opposition Is Noted.
This called for broadening the
income tax, sales tax, 5 per
cent tax on unincorporated busi-
nesses, doubling most of the liquor
taxes, a 2 per cent tax on utilities
bills, 1-cent levy per package Of
20 cigarettes and a 10 per cent tax
on the ticket price for amusements.
In view of the general opposition
to the utilities tax expressed at the
public hearing last month, it was
considered likely that this proposal
would be dropped. Some modifca-
ton in the amusement proposal
also was forecast on the basis OF
testimony at the hearing. II not
entirely scrapped, the amusement
tax may be turned into seat tax
on capacity along lines suggested
by Rufus Lusk of the Washington
Taxpayers Association, a member
of Mr.. Vests special committee.
Mr.. Lusk did not vote on the
ticket tax recommendation after
the committee discussed and dis
carded the seat-tax proposal.
Federal Share Factor.
Although citizen witnesses at the
tax hearing were unanimous in
support of greater Federal share in
District expenses, it was not indi-
Gated that Mr.. Vests draft would
include any such provision.
District fiscal observers feel that
submission of any moFley-raiSing
bill to prevent a deficit expected in
the next fiscal year should feature
some flexible formula for determine
ing the Federal share, such as the
OMahoney formula, supplemented
by taxes.
Under the O,Mahoney formula re-
lating the Federal payment to the
percentage of Federal tax-free land
holdings, the city would receive an
estimated $4,000, 900 more than the,
current $1,000 900 Federal contribu-
tion. Since it is computed on a per-
centage of the total expected Dis
trict revenues, the amount would be
increased If tax legislation were to
raise the city income.
Plans Fate Uncertain.
If such formula, already indorsed
by President Truman. is submitted
by the Budget Bureau to the new
Congress, along with the annual
Federal budget-which includes the
District budget-it was felt there
would be good chance of passage.
On the other hand, if the Dis
trict budget is accompanied solely
by q tax program. it was believed
the taxes would be enacted, and
if the O'Mahoney plan we're intro
duced for separate. consideration, the
plan might be lost in an economy
wave.
Meanwhile. on October II, the
Commissioners are due to hear the
views of the public on the record
breaking s136,0o0, 900 budget requests
for the next fiscal year submitted
by the Department heads, and hence
they have not yet decided on an
overall figure to limit the budget.
For this reason, legislation drawn
up by Mr.. West will be subject to
revision in the light of what the
city heads feel is a necessary amount
to spend during the coming year.