Evening star., 1948-03-18
ID. {. Heads Ask
z Pct. Sales Tax
To Meet Budget
Oppose Any Poy Boost
For City Workers as
Joint Hearing Opens
By Don S. Worren

District government spokes-
men today called on Congress
to enact a 2 per cent general
sales tax to balance the city's
record $101, 100000 budget and
meet some of the permanent i'm
provement backlog.
In doing so. storm signals were
raised against proposals for pay
raises for city employees. The Com
missioners said pay boosts could not
be met, even with the sales tax,
unless other taxes were increased
further.
1t was the opening of hearings
before the joint Fiscal Subcommit-
tees OF the House and Senate Dis
trict Committees on a proposed new
revenue bill for the city.
During these sessions, which will
run five or six days, all present
and proposed tax measures are to
be studied. A special problem at
taches to the hearings, since the
pending 1949 city budget is at least
S6,O0O,000 over estimated resources.
Many Views Expected.
A wide variety of views of the
District financial problem Is ex-
pected to develop. Chairman Cain
OF the Senate Fiscal Subcommittee
has sponsored a bill to repeal the
Districts individual income tax on
the ground it is inequitable and
discriminatory, because it exempts
the salaries of Government workers
VINO say they pay levies to the
States. He is said 10 be sympa-
thetlc to the sales tax measure.
chairman Bates of the House Fis-
cal Subcommittee, who has found
fault with the terms of the personal
income levy here, looks on a sales
tax only as a last resort" and has
demanded sharp slashes in the pro-
posed budget.
support Tor a sales tax has been
registered by the Board of Trade.
The levy is to be attacked by spokes-
men for labor and other groups,
Calls Income Tax Inequitable.
Although not in agreement on
the sales tax proposal, Senator Cain
and Representative Bates, co-chair-
men for the hearing, Joined in
oenouncing the lack of equity in
the District income tax which
exempts a wide section of persons
who live here but maintain domicile
IN their home States.
Mr.. Bates said II the income levv
were on an equitable basis he would
nave no. hesitancy in moving to
raise the rates to double their
present level.
Senator Cain said he wished that
could be done, but added Congress
IN It's wisdom has determined on an
income tax that is not on an eouita-
ole basis He called the present in
come tax a "mongrel' and said he
mad moved for its repeal because it
did not apply to people living on
both sides of the street"
commissioner Guy Mason solidlv
supported the move for a sales tax.
put differed somewhat from his
Commissioner colleagues by recon-
mendlng continuation of the income
TAX until experience had proved the
sales levy would be adequate to meet
city needs. He said he believed in
the principle of the income levy. to
tax according to ability to pay. and
held the District levy, though in
equitably applied, was not a heavy
burden.
SS,OOO Subject to Income Tax.
Mr.. Bates opened lively general
discussion of the sales tax plan by
asking Commissioner John Russell
Young whether he was opposed to
the Districts individual income lew
as matter of principle or because
IL exempted the salaries of Govern
ment workers who claim they are
subject to State income levies else
where.
Commissioner Young replied that
the Commissioners were seeking re-
peal OF the income levy after next
year because of its inequitable and
discriminatory features.
He ard District Assessor Edward
A. Dent stressed that only some a.
600 persons here are subject to the
District income tax, whereas it is
estimated about 100000 would be
subject to it if it were not for the
broad exemption provisions.
Mr.. Bates suggested that the pro-
posed sales tax might start with a
z per cent rate, but later be raised
to 3 or 4 or 5 per cent. At this
point, Representative Tale, Re-
publican, of Iowa, agreed that re-
straint must be placed on spending
programs where the sales levy is
used. Later, however, he said Iowa
has sales tax and that the State
government does use restraint in
passing on budget proposals.
Smith Backs Sales Tax.
Representative Smith, Democrat.
OF Virginia, brought out that the
danger OF raising rates on the sales
tax is something that could be ap-