Evening star., 1949-03-12
6 on D. {. Unit
Fight 10
Kill Sales Tax
Back Income Levy
For Bottle Due on
House Floor Mondoy
BY Don 5. Worren


trict Committee will lead an at
tack in the House Monday on the
2 per cent retail sales tax pro-
posed by the committee to solve
the city's impending deficit.
In a minority report filed with
the House last night, the six said
they will demand that the bill be
recommitted so that other revenue
measures may be substituted for
the sales tax.
The protesting group suggested
as substitutes an income tax ap-
piled to all residents, without re-
gard to claims of State domicile,
higher income tax rates, a higher
Federal payment, borrowing to
pay for permanent improvements
and re-examination of realty
taxes with the aim of raising
more money.
Reported Out, 16 to 7.
The group is headed by Repre-
sentatives Kennedy. Democrat, of
Massachusetts,. and Klein, Demo-
crat, of New York. Others join
ing in the minority report were
Representatives Miller of Califor-
mia. Morrison of Louisiana, Bu-
chanan of Pennsylvania and
Granger of Utah, all Democrats.
The tax bill, calling for several
changes in the city's income tax
law as we'll as adoption of a sales
levy, was recommended Thursday
by 16-to-7 vote of the commit
tee.
Representative Smith, Demo-
crat. of Virginia, head of the Dis
trict Fiscal Subcommittee, has
pointed out that the House twice,
in recent years, has rejected pro-
posals to apply the city's income
tax to all persons resident here.
The pending bill would eliminate
the old "domicile" restriction but
would provide a basic exemption
of $4,000.
"Austerity Budget"
A report for the proponents of
the bill. submitted by Mr..
Smith, stressed the necessity for
much greater District funds in
the coming year. The Commis-
sioners' budget, the majority
group said. was one of "auster-
ity," providing no funds for new
school projects. 1t lacked suffi-
cient funds for expanding service
needs and for meeting all the
needs of indigents, the report said.
Even with this careful prun-
ing. the budget for the general
fund was submitted with deficit
of $8,077, ,627," the bills sponsors
said. 1t then noted that passage
of retroactive pay raises for city
employees would boost this deficit
to S18.747,03o.
While the House slashed about
S4,400,000 from the Commission
ers' budget, to reduce the imme-
diate deficit to about $2,500,000,
the majority report said the Sen
ate probably will be urged to re-
store much of the total dropped
by the House.
Sales Tax Held Discriminatory.
The Kennedy-Klein group de-
nounced the sales tax proposal as
inadequate, unfair and discrimi-
natory." 1t agreed the financial
situation is serious, but attacked
the sales tax as a measure of
fiscal desperation" 1t repeated
the arguments that sales tax
is "regressive" and that it is more
burdensome on the poor than on
the rich.
I'VE cannot believe that Wash
ington, one of the richest COM
munities in the country. need re-
sort to this device. when the al
ternatives are so clearly superior"
the minority said.
1t argued that the Klein bill for
a broad new income tax, with
higher rates. would produce about
100000. Also, it said. this does
not exhaust the income tax posi-
bilities. An additional $5,000,000,
the Kennedy-Klein group said,
could be raised easily, without
unduly burdening District resi-
dents" by increasing the top rates.
Federal Share 'Lags."
On the realty tax. the group
proposed a re-examination. with
view to equalizing the effects
of this tax among the various
property owners. This equali-
zation will contribute additional
revenue"
AS to the Federal payment.
which now totals $12,000,000, the
Kennedy-Klein group said the
Federal share has Jagged far be-
hind the cost of services rendered
by the District to the Federal
Government"
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