Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-09-11
MuIti-MiIIion
Tax Increase
Plans Drafted
D. c. Heads Will Get
Proposals This Week
From Finance Officer

crease program-including q new
recommendation to levy a pay
roll tax on Maryland and Vir-
ginia residents working in Wash
ington as wen as on residents of
the city--is slated to go to the
District Commissioners late this
week.
Finance. Officer James l.. Mar
tin. who is drafting the program.
said yesterday it would include
every conceivable increase to give
the city heads a choice in de-
Gliding within the next two
months which tax boosts they
will recommend to Congress.
Mr.. Martin indicated he viii
make a strong effort once again
to get the payroll tax. which
drew a hostile reception from
suburban congressman when it
was proposed earlier this year.
SIS Million Deficit
Now, however, Mr.. Martin
warned, I'VE need big money"
to meet outright deficits Of nearly
SIS million in the next year and
a half. plus an undecided In
crease in the budget for the COM
ing fiscal year. District depart
ment heads have asked to spend
a record $2l3 million-nearly $43
million more than present reve-
nues are calculated to produce.
Estimated yield from the pay
roll tax, under an Inflated pro-
gram prepared last March. was
So million a year at the rate Of
one-half of one per cent on gross
earnings of residents and nom
residents alike, with no credit
against individual income taxes.
The program also will include
recommendations for q boost In.
income taxes, with the possibility
Of doubling up income taxes for
one year Is Maryland Is now
doing. =
FavOrs Pay-As- You-GO
Mr.. Martin said he win pro-
pose shifting income tax COLLEGE
tons to 4 pay-as-you-go with
holding basis. During such .
shift, taxpayers would be paying
on income for the previous year
as well as on current income.
Personally, Mr.. Martin said.
he favors forgiving half Of one
years taxes If such a shift is
made, and viii include in his
program estimates of the yield
under such a procedure.
Also, however, he will include
estimates Of the yield of a shift
to the withholding basis without
any forgiveness at all.
Coupled with this is expected
to be a renewed proposal to re-
duce the personal exemption Of
taxpayers from $4,000 to $4,000,
or even $1,000, and increase
rates in the upper brackets. The
reduction to $4,000 has been es-
timated to yield an increase Of
from So to "a million a year.
Would Hike Realty Tax
Another recommendation un-
doubtedly will be for . hike Of
at least 10 cents In the real
estate tax rate, from 1920 for
each 500 Of assessed valuation,
to $3.50 or more. This is esti-
mated to yield nearly 81 million
Q year.
Another proposal. calculated
to produce nearly $2A million
q year, will be to bring the Dis
trict grocery tax up to the city's
nat 2 per cent rate for other
sales.
Also, the recommendations
presumably will repeat an earlier
proposal to raise 81 million a
year by reducing from SO to 10
cents the point at which res
taurant meals are subject to
the sales tax.
The recommendations are
slated to come before the Com
missioners at a formal public
hearing late In October, three
or four weeks after a public
hearing on departmental budget
requests for the coming fiscal
year which begins next July /.
The revenue and budget pro-
grams must be considered to-
gether by the Commissioners
this year. Legal requirements
that they submit only balanced
budgets to Congress will force
them to send a revenue program
along with the budget to make
up deficits which will exceed SO
v,aif1invn