Evening star., 1946-07-10
Higher U. 5. Sum
Held Vital Under
ID. {. Tax Plan
$l7,750,000 Boost in
levies Not Enough
Alone, Mason Says
BY John W. Thompson, Jr.

The $l7,75o,oO0 tax program
recommended to the Commissioners
yesterday by their special tax COM
mittee must implement a substan-
tial increase in the annual Fed.
eral payment If the District is to
make both ends meet in future fis.
cal years.
This was the opinion of Com
missioner Guy Mason last night
after the report OF the committee,
headed by Corporation Counsel
Vernon E. West, was made public.
Neither one will be suf1cient
without the other" Mr.. Mason de-
clared.
The committees seven-point pro.
gram was.
l. Broaden the base of the pres
ent income tax to cover persons
actually residing here and non-resi.
dents earning their income here.
Per Cent Sales Tax.
2. A 2 per cent sales tax on re.
tail goods except certain necessi-
ties bought in the District and a
use tax" on similar articles bought
out OF the city for use or storage
here. The sales tax would be i'm
posed. through stamps, on the seller
with 25-cent exemption. The use
tax would not be applicable to pur-
chases of less than s25 aggregate
In any one month or to purchases
OF nonresident for his own use.
3. A 10 per cent amusement tax
on ticket price.
4. Doubling most of the LIQUOR
levies.
S. A 1-cent tax per package of
cigarettes by stamps.
6. A S per cent tax on unincorpo.
rated businesses.
7. A 2 per cent tax on utilities
bills.
Mr.. Mason said the Commission.
ers may have to prepare primer"
On District finance to convince every
member of Congress that even with
the $4,000, 900 increase in the Fed
eral payment this year, the District
will enter the 1918 fiscal year
with $4,000, 900 operating deficit.
Sees Aid Toward Formula.
He felt the tax program that IL
ultimately adopted by the Commits
sioners for presentation to Congress
may help the cause OF the fixed
Federal payment formula such as is
proposed by Senator OMahoney,
Democrat, of Wyoming.
You can't get money from bank
without showing your sources of in
come" he said. Congress Is our
banker"
The O'Mahoney plan would re-
late the Federal payment to the
District tax income in ratio of the
amount of Federally owned, tax
exempt land to the entire District
area. At present, the formula is
calculated to produce a payment Of
about $1,000, 900.
While Mr.. Vests report repre-
sented the majority OF the commit-
tee, there was no unanimity on the
schedule of taxes. Joseph r. Harris,
a member of the Merchants and
Manufacturers Association, has filed
with Commissioner John Russell
Young his opposition to a sales tax
in the form OF minority report.
Claims Income Will Drop.
Mr.. Harris charged that if the
District has a sales tax and the
surrounding Maryland Virginia
communities do not, consumers will
buy where the price is best. Thus,
he said, there would be decreased
profits for District stores and lower
income tax returns for the District.
Mr.. Harris concurred with the
other phases Of the report.
K. P. Armstrong of the Fedora
ton of Citizens Associations, sought
a low priority for the sales tax
which the committee majority gave
place to the income tax amend
ments.
Rufus S. Lusk of the Washington
Taxpayers Association, did not vote
for the amusement tax Mr.. West
said Mr. Lusk favored seat" tax
on amusement places rather than
the levy on the ticket prices. The
committee chairman admitted the
10 per cent on top of the 20 per cent
Federal amusement tax would be
high, but said the group turned
down the seat tax on the idea that
capacity is not the gauge of busi-
ness.
Two theaters might have the
same number of Seats" he said, but
one through operating longer hours
may be doing twice the business of
the other"
Others Study Gas Tax.
The West Committee did not men,
ton gasoline tax increase, Mr.,
West said, because it was Investigate
ing only sources of income for the
general fund. The gasoline tax and
the problem of traffic fees is being
studied by another group headed by
Highway Director H. c. Whitehurst,
he said.
Real estate was believed by the
committee to be adequately taxed.
The first point in the tax program,
relating to taxation of persons get
ting their income from the District
but claiming residence elsewhere,
would affect thousands of persons
with homes in nearby Virginia and
Maryland.
Lawyers. in Rockville said they
knew of no Maryland law pro-
hibiting double taxation. One point
ed to a provision in the State code
which permits a Maryland resident
who is liable to income tax in an
other State to deduct the latter tax
from his Maryland income tax.
They said the legality of taxing a
Maryland resident who works In the
, District would have to be decided in
District courts.
Seen as Stated. C. Problem.
;, Montgomery County Treasurer
John B. Diamond said he had re-
ceived letter from a county resi-
dent recently in which the resident
J, complained of being asked to pay a
District income tax in addition to
his State tax and asked Mr.. Dia.
mond whether such action was legal.