Evening star., 1948-03-22
Sales Tax Plan
Given Congress
By Trade Board
20 Levy Would Yield
13R Millions Yearly,
Group Tells Hearing
BY Don S. Worren

Adoption of a 2 per cent re-
tail sales tax with grocery and
medicine exemptions was urged
today by the Board of Trade as
the only adequate and practical
solution to the Districts i'm
pending deficits.
As joint House-Senate hearings
were resumed on the revenue prob
lem, Board of Trade spokesmer
reviewed a wide field of other tax
possibilities and found all of them
inadequate, injurious or impossible
of enactment.
They marshaled many pages of
arguments, charts and survey re-
ports, assembled in months. of study
of the whole budget and revenue
problem. in support of the sales levy.
Returns for the coming fiscal year
were placed at 100000 and for
later years at least $13,50o,000
In doing so, the board renewed
its call for higher Federal pay
ment toward National Capital costs.
The present $11 200, 900 payment to
general fund costs. it said, was in-
adequate compensation for city segv-
ices to the United States and reve-
nues lost by exemption from taxes
of more than half of the area of the
District Most of the tax-free land
is held by the United States.
Budget Cuts Urged.
Maj. Gen. David McCoach, jr,,
former Engineer Commissioner, who
heads the Municipal Finance Com
mittee of the Board of Trade:
l. Suggested cuts in the record
breaking s101 ,400. 900 budget for the
year beginning July l, particularly
as to requests for hiring 935 more
city workers, but reluctantly"
agreed no great saving could be
made here.
He put net savings at not more
than $2,000,000, called this "rela-
lively inconsequential" and said the
Board of Trade was in substantial
agreement with city officials as to
the need for further taxes,
2. Attacked as out of date the
critics arguments that the sales
tax is "regressive," saying this is
"of the vintage prior to present high
and sharply progressive Federal
income taxes"
3. Submitted statistics studies to
show that If real estate taxes we're
raised to fill the gap a rate of s3
per 500 would be needed--a rise
of so per cent-which would place
a heavier burden on renters and
home owners than the sales tax. 1t
would amount to the difference Of
an added $50 for the owner of a
home assessed at $1,000 and sales
tax totaling S19.42, he said, assum-
ing the home owner or renters
income to be $4,000
Monthly Returns Asked.
4. Proposed that retailers make
sales tax returns monthly instead
of quarterly. with the result that
collections of the tax in the next
fiscal year would amount to
So, 100000 instead of the earlier
estimated s6,O00O0O. The explana-
ton was that under the quarterly
plan large portion of the first
year receipts returns for the final
quarter) actually would be received
in the following year.
5. Abandoned hope, in view of ex-
perience, that Congress would be
willing to broaden the coverage of
the Districts personal income tax to
include the salaries of many thous-
ands of Government workers living
here but exempted on claims of
legal residence in their home States.
Without such correction of the
inequities of the personal levy, the
board rejected proposals for higher
income rates. AS practical men,"
the board members concluded
broadening of the personal income
tax was impossible of accomplish
ment' and therefore asked for its
repeal as of next December 81. This
would leave it in effect for the next
fiscal year, with some receipts still
due the following year.
8. Suggested that the United
States payment be increased to
cover the whole cost of any District
pay raise that would have to be
granted in keeping with any Federal
pay increase, on the ground that it
would represent the imposition OF
a national policy"
The position outlined by Gen. Nc
Coach was backed up by action OF
(See D. C. FISCAL, Page A-5J