Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-04-01

&AtCo 8Oe " At1 4Akob SScu ~ UtC
Senate early today.
It was approved on q serni-
final vote, 16-to-e.
Opposition came from Repub-
leans and the Montgomery and
-->-------->--- --->-------~
Sfatus Of Bills ia MorIdnd Legislature.
Pese ALL
Prince Georges County senators.
who object to a provision In the
plan cutting Of the local SUBJ
divisions share of the extra
revenues which would result from
o proposed Withholding system
for State income taxes.
The plan. developed by the
Senate Finance Committee. pro-
poses to start withholding In
come taxes from payrolls in July.
The 2 per cent rate would remain
the same, but deductions would
be set at a fat $500. Deductions
are now $1,000 apiece for tax
payer and wife and $500 for each
dependent.
Different House Plan
Meanwhile. the House Ways
and Means Committee has its
own plan for meeting the esti-
mated 1884 million gap between
anticipated revenues and ex-
penditures next year.
The House recommendation
would involve increasing the In
come tax rate to- 2l1a per cent
with a fiat 5000 deduction. It,
too. would collect income taxes
through Withholding as Of july /.
Also before the Legislature is
Republican Gov. McKeldin's pro-
gram Of penny increase In the
sales tax this year and q SO per
cent boost in the income tax
next year.
But the only tax plan that
has moved anywhere in this
Democratic Legislature so far is
the Observation-Disclosures plan
of the Senate Finance Conn
mittee.
Senate Majority Leader John
q. TurnbuIl maneuvered his pro-
gram over its first hurdle In q
Senate session. which lasted
until 1908 am.
He said he wanted to make
haste on passage Of the tax bills
because 1T may be necessary toi
have d conference COMMITTEES To
work out our differences with
the House"
The constitutional Z deadllne
for adjournment Of this 90-day
session Is Monday midnight.
Stop-Gap Proposal
Mr.. Turnbull conceded his
plan Is q stop-gap In that It.
draws most Of its revenues from
sources that win not be available
after the first year. He con-
ceded also that the next Legis-
lature win be faced with the task
Of finding tax revenues to meet
o deficit Of at least $21 million,
but he added that the Legisla-
ture 'has 10 months to study
and come up with q sensible
long-range. tax program"
The bulk Of the revenue under
the Senate committees plan
would come from q telescoping
Of income tax payments under
withholding collecting taxes for
q year and a half in one year.
In addition, 1t would keep for
the State an estimated $50 mill,
lion Of these windfall funds
which, under the Sherbow dis
tribution, would be given back to
the cities and counties. The cities
and counties would receive about
the same amount next fiscal year
from redistribution Of income
taxes that they would get with
out initiation Of q withholding
system. I
This latter provision drew OPP
position from Senators II. WIN.
ship Wheatley. jr.. Of Prince
Georges. and Edwards 8. Nor
throp Of Montgomery, both DEM
ocrats. They argued that the
counties are In dire financial
straits, too, and--in Mr.. Nor
throp's words--"are entitled to
this windfaIl cushion 80 that
they also can explore their sit
uation for q year"
Estimates Made
Estimates are that Montgom-
cry would receive about $l.2 mil
lion In extra State money from
the withholding windfall and
Prince Georges something close
to $3.50. 900.
Senator Turnbull argued that
the legislators owe o paramount
responsibility to the State. He
reminded the two Washington
area Senators that II the local
subdivisions are allowed to share
In the withholding windfall, the
legislature win have to raise tax
rates. 80 I.
The House ways and Means