Evening star., 1947-06-09
D. {. Fiscal Plan
Hit in House as
Debate Is Begun
Income Exemptions
AssoiIed by O'Horo;
Time Limit Agreed On
By John w. Thompson. Jr.


Debate was begun by the House
this afternoon on the Districts
new sl3.500,000 revenue bill un-
der two-hour limitation agreed
to by District Committee leaders
of both parties.
At the outset, Representative
OHara, Republican, of Minnesota
branded the income tax proposals
in the measure as horribly unjust"
He characterized as dishonest leg
islative process" the exemption of
members of Congress and cabinet
officers, while the bill does not
exempt other Federal employees.
Under the provisions OF the bill.
persons living here seven months of
the year would be liable for the in
come Iax, but could credit against it
any tax or income intangibles paid
to a State.
Chairman Horan OF the Appro-
priations subcommittee handling
the $97 100000 District budget for
the fiscal year beginning July l,
charged that political expediency
of far distant areas of our Nation
is clearly and biasedly written into
the money-raising program,
Will Seek Sales Tax.
He said at the proper time he
would introduce AS an amendment
to the tax program a proposal for
a Q per cent sales tax.
the revision of the present in
come tax law as carried in the new
bill was defended by Representative
Smith, Democrat, of Virginia, who
told members of the House it is up
to them to decide how they want the
Capital of the Nation to be main
tanned.
The question is" the Virginian
said, are you going to accept this
program or are you going to throw
it in the ashcan?
While leaders OF the District Com
mittee which reported out the fiscal
bill Friday were confident of favor
able action. they expect battle on
some features.
Congressman Exempted.
These f11eMde:
1. The provision under which
members OF Congress and presiden-
tial appointees subject to Senate
confirmation are specifically ex-
empt, but other Federal employees
are not. E
q The stipulation that all persons
resident here for seven months of
year would be subject TO the in
come levy but could credit against
it any income or Intangible tax
paid to a state.
3. The proposed s4,0O0000 in
crease in the annual Federal pay
ment toward city expenses.
4. Lack of sales tax in the
program.
Barely Saved In Committee.
Objections to the provisions OF
the new income tax arose in COM
mittee and might have we'll stalled
action on the measure had nos
Chairman Dirksen pleaded the time
factor and promised that amend
ment could be offered on the floor.
On this basis the members voted
out the bill 1872.
Mr.. O'Hara is the leader of the
attack on the income tax exemp-
tions. He has objected "the little
fellow" in federal service is not pro-
vided for, and that the state of an
individuals legal residence should
have prior claim on taxing him over
a state of actual residence.
Drafters of the plan, however,
drew distinction between elective"
government officers and the group
which comes here voluntarily be-
cause of the attractiveness of the
federal payroll
Mr.. O'Hara also objects to the
proposed credits against the local
tax for taxes paid to States, because
of the is States which have no in
come tax
80 Other States Higher.
AS the bill now stands legal resi-
dents of the 80 income taxing States
would not have to pay any such levy
here because the rates in all are
higher than those carried in the
bill
Both Republican and Democratic
leaders on the District commmittee
are aware of some hostility toward
increasing the Federal payment, but
the committee members are believed
unanimously behind this feature of
the bill even if an amendment Is
offered on the floor. ..
Mr.. Horan has consistently MAIN
tanned that the Dirksen COMMITTEES
program will not raise enough
money. He also feels that the sales
levy will cover a broader segment Of
the population than the proposed
income tax
Yield at Least Million.
Estimates of the yield of 2 per
cent sales tax here run from s9,000,-
900 to 100000.
Yield of the income tax revision,
which includes with the personal
levy tax on corporations and un-
incorporated businesses, is esti-
mated at S3.l00,000 more than the
So, 9,00o,0 900 now being taken in from
d personal and corporate levy.
Other revenue raising features in
the plan to come before the House
include a 25-cent raise in the real
estate tax rate to 81. This is ex-
pected to produce 100000. Water
rates are boosted 25 per cent to yield
100000 and the gasoline tax in
creased to cents per gallon until
July /. 1852. when it would revert
to its present cents. The 50-cent
motor vehicle inspection fees would
be doubled.
IL LII NIL l..