Evening star., 1948-01-08
Arlington Group
Adopts Tax Plan
For Assembly
Delegation to Support
Five-Point Program,
Fight Sales Levy
n a..
By Robert c. RoIIinos

py NOOeTt -. koIlinQS
Arlingtons Representatives In the
Virginia General Assembly, plan
ming to oppose enactment OF a
Statewide sales tax law when the
Legislature convenes next week, are
ready with a substitute proposal
for increasing revenues.
The plan is to support recon-
mendations of commission of the
Generale Assembly which proposed
alternatives to a sales tax after
a seven-month study of the SUBJ
ject.
Created in 1914. the Commission
to Study the Sales and Use Tax
comprised five members of the Gen.
era( Assembly and two authorities
on taxation appointed by the Gov
ernor. 1t made its report in Febru-
ary. 1945, but the General Assembly
did not act on its recommendations
at either the 1916 regular session or
the 1947 special session. Nor did
the Legislature adopt sales tax law.
Would Alter Proposals. d.
Although members of the delega-
tion-Senator Charles r. Fenwick
and Delegates J. Maynard Magruder
and George M. Damm-are general
ly behind the alternatives, they
would change some of them.
"Rallying behind this report will
give us an official position which
will be much stronger than if we
pulled our recommendations out OF
thin air." one of the Arlington
legislators asserted.
The commission suggested adop-
ton of four -piont program in lieu
of the sales tax. This program called
for an increase In the rate on in
comes above $1,000; an increase in
the rate of the corporation income
tax; in increase in the rate of the
merchants retail license tax and an
increase in the gross receipts tax of
public service corporations.
OF its recommendations as to in
come tax the commission said:
The rates of both individual and
corporation income taxes are some
what lower in Virginia than in most
States which employ these taxes.
Proposes Income Fax Rise.
There would seem to be no valid
objection to schedule of gradu-
ated income taxes in Virginia rang
ing from IL per cent to S per cent.
.
Likewise, the corporation income
tax in Virginia is somewhat lower
tha nthe average rate in other
Regarding its overall proposals,
the commission noted that "the in
creases suggested are condi-
toned upon present levels of busi-
ness and national income payments.
A contraction in income payments
would be followed by a decline in
tax receipts. Thus the funds real
lied from the sources given above
might we'll be substantially below
the estimates. ... .....-
"A recession in business would
cause a reduction in revenue from a
sales tax also. but the decline would
be less sharp than in the case OF in
come taxes"
Sales Tax More Stable.
. Continuing, the commission stated
sharply:
In time Of depression the sales
tax has proven to be much more
stable than the income tax"
Another commission which is to
report to this years General Assem-
bly, will advocate a 2 per cent sales
tax among other revenue measures.
The principal objection to such a
levy-ss determined by the 1914
commission, was that it is particu-
larly hard on the small income
group.
Members of the earlier commits
sion were DR.. Upton r. Snavely
chairman of the schools of eco
nomics and commerce, University of
Virginia, and c. H Morrissett
State tax commissioner. who were
appointed by the Governor; Sena-
tors Y. Melvin Hodges and j. C.
Carpenter, jr.. and Delegates Ed
mund T. De Jarnette, John Warren
Cooke and Vernoy B. Tate.
The Arlington legislators pointed
out that the rates suggested in the
commission report undoubtedly have
to be changed if the recommended
tions are adopted now because the
computations we're based on the
financial problems of 1944-5.
What we are thinking must be
governed somewhat by what other
groups which oppose the sales tax
are thinking" the Arlington delega-
tons spokesman declared. ALSO
by what the Governor sasy in his
message
They made 1t clear. however, that
they feel that all sales tax oppo-
nents must present united front
if they hope for success.