Evening star., 1949-03-06
.McGrath Backs
~ Sales Tax 10
Bar DC. Deficit
Committee Head Says,
No Other AttuinubIe
Plan Is in Sight
By Don S. Worren

Chairman McGrath OF the Sem
ate District Committee yesterday
threw his support to a 2 per cent
retail sales tax as the key to the
solution of the city's pressing A.
nancial problem.
He announced he would sup
port in general the revenue plans
outlined by the fiscal subcom-
mittees of the House and Senate
District Committees because there
is no foreseeable, attainable al
tentative"
It was his first specific declara-
ton on the tax issue since he
took over the reins Of the District
Committee. It gave a big push
to the move to prevent an i'm
pending big city deficit since some
opponents of the sales tax plan
had been predicting he would join
their ranks.
New Drafts Awaited.
Action on the measure may be
stepped up this week. New drafts
Of the bill, carrying out the latest
decisions of the joint fiscal group.
are scheduled to be introduced to-
morrow in the House and Senate.
The revisions have been pre-.
pared by Corporation Counsel
Vernon E. West at the direction
of Senator Hunt, Democrat. Of
Wyoming and Representative
Smith, Democrat, of Virginia.
chairmen of the two finance units.
While the Joint subcommittee
has surrounded it's latest decisions
with official secrecy, in keeping
with the legislative precept that
tax proposals cannot be written
in public without causing tax
payer howls, the general pattern
has been indicated.
Food Exemption Planned.
Some reports as to final de-
cisions may prove in error, OBJ
servers warned, but it appeared
yesterday the pending plan called
for:
! A 2 per cent retail sales levy.
exempting foods for home con-
sumption and medicines and some
other items, generally in keeping
with the Maryland sales tax law;
A use tax to make the sales levy
effective as to imported products;
A revision of the city's income
tax, to broaden the base to in
clude all persons, except certain
elected and appointed officials, re-
siding here seven months or more
of the year, but to provide basic
exemption Of $4,000 or $4,000 Of
taxable income;
A section to lower the basic
exemption from the income levy
as to the net incomes of unin-
corporated businesses; and
A 2 per cent tax on the price
of rooms in transient hotels.
Larger U. S. Payment Studied.
An increase in the Federal pay
ment toward the District also was
favorably considered but it could
not be confirmed that the joint
group has included it in the re-
vised measure.
The joint group has approved
the plan of the Commissioners
for a doubling of the city's liquor
taxes and license fees, but there
was some indication yesterday
this might still be subject to a
final decision by the House Fiscal
Subcommittee.
A separate bill to carry out the
Commissioners request for such
increases, in addition to the appli-
cation of the sales tax to beverage
sales, has been introduced by
Chairman Smith. Liquor spokes-
men, however, have been pressing
the argument that to make the
total taxes too high" might serve
to reduce, instead of increase, the
total of liquor tax revenues.
Senator McGrath made his
statement after studying one Of
the latest confidential committee
drafts of the revenue bill. While
no champion of sales taxes as
such, he told reporters he would
support the recommendations Of
the subcommittee since he could
find no practical substitute.
Can Find No Alternative.
Alternatives have and might be
suggested, he commented, but
added that he had heard of none
that would be an "attainable
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