Evening star., 1947-06-10
Senate May Act
Late This Week
On Fiscal Plan
House-Approved Bill
Bars Wider Bose for
D. c. Income Tax

District officials were uncertain
today whether the House action
yesterday on the proposed new
personal income tax would leave
the city better or worse off than
it is under the present law.
Their study of the measure came
as the members cut the heart out
of the proposed revision with an
amendment exempting all Federal
employees who declare themselves
legal residents of a State.
The amendment would eliminate
nearly all chance Of the city picking
up additional taxpayers over the
$4,000 who now carry the burden
under the present law, in which
legal rather than actual residence
is the basis for the tax.
Increases Federal Payment.
Except for this one major setback,
however. the $13, 100000 money bill
designed to keep the city out of the
red for the next two years was sent
to the Senate intact.
It carries a $4,000 900 increase In
the annual Federal payment toward
city expenses; a 25-cent increase in
the real estate and personal prop
erty tax rate to So; rs per cent
increase in the water rates; a tenn
porary 1-cent increase to 4 cents
per gallon in the gasoline tax until
July /. 1852, and a doubling of thss
50-cent automobile inspection fee.
Still surviving in the income tan
is a S per cent levy on unincor-
porated business.
Some action-possibly even an
effort to include a sales tax in the
program-may develop on the Sem
ate side of the Capitol late this
week.
Senator Cain, Republican, Of
Washington, chairman of the fiscal
subcommittee of the Senate District
Committee, Is out of town but is due
back Wednesday. Chairman Buck
of the full committee has indicated
he may be able to get the bill be-
fore his colleagues shortly after
ward.
Sales Tax Beaten.
A move by Representative Koran,
Republican, of Washington, chair
man of the House Appropriations
Subcommittee handling the $97,000,.
900 District budget for the year be-
ginning July to force per cent
sales tax into the revenue plan yes
.terday was beaten 1888.
Mr.. Horan told the House that
without it, the fiscal plan would not
yield enough money, since it is
geared to overcome $10,500,000
deficit in the general fund. Mr..
Horan said the deficit might be
larger.
After his sales tax amendment
was defeated, Mr.. Horan made a
last-ditch effort to send the bill back
to committee but was voted down.
The original revenue program re-
ported to the House last week would
have carried the city through the
next fiscal year with a $2,000,0 900
surplus at the end provided Mr..
Horan cut the 1948 District budget
estimates by $2,000,000.
Effect of the House action, If fully
sustained, will be to force the cut
in proposed expenditures, since the
loss from the income tax amendment
could consume what would have
been the surplus.
O'Hara Sponsors Amendment.
The crippling amendments to ths
income tax was sponsored by Repre-
sentative O'Hara, Republican, Of
Minnesota, and climaxed lengthy
debate on how the proposal of the
District fiscal subcommittee, headed
by Representative Bates, Republic
can, of Massachusetts,, would affect
their secretaries and constituents.
Under the Bates proposal, the
exemption of the present law
would have been written into the
revision exempting members Of
Congress and cabinet officers prin-
cipally. For others maintaining legal
residence in State, credit against
any District income tax would have
been allowed for any income or
intangible personal property tax
paid to a State.
The O'Hara amendment-beaten
in slightly different form in the
District Committee last Friday by
II to 4-was driven through 78 to 80
in a bipartisan vote of members
unwilling to expose their staff to
local levies, and Representatives
of the 16 non-income tax States,
whose constituents would not have
received major credits under the
Bates plan.
The language of the change would
exempt Federal employees from the
tax, provided they make a declara-
ton under oath to the assessor
that they are legal residents of a
State.
d. C. officials Worried.
District officials frankly are wor-
ried that the mere requirement OF
an affidavit might cost them a large
number OF taxpayers.
"It's not that the taxpayer would
deliberately misrepresent under oath
(See REVENUE, Page A-5)
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