Evening star., 1955-03-11

estate tax rate, increasing it from
1920 per $100 of assessed valua-
ton to $3.50. This figured to
raise revenues by $1.9 million.
The committee also urged
raising the beer tax from SIPS
a barrel to So, for a revenue in
crease of $950,000
If the earnings tax is not
adopted, the committee said, the
$4,000 personal exemption under
the individual income tax should
be cut to $4,000. On this, the
estimate was So million more
revenue.
Another suggestion, in case the
earnings tax is not adopted, was
to extend the Districts unin-
corporated business franchise tax
to doctors, lawyers and other
trades or businesses which by
law, customs or ethics are not
incorporated and those in which
more than 80 per cent Of gross
income is derived from personal
services rendered by owners"
The yeild on this was estimated
at $1.250,000.
Expanded Income Tax
REGARDLESS of the earnings tax.
the committee suggested making
persons domiciled in the States.
but who actually live in Wash
ingtop. pay the Districts income
and franchise tax in full.
Present law permits such per-
sons to deduct from their Dis
trict tax returns the amount of
taxes they pay their home States
and territories as income or in
tangible personal property tax.
The committee also suggested
that the Districts 2 per cent
sales tax be charged on sales at
armed forces commissaries and
post exchanges here.
Also, the group suggested
amending the Soldiers and Sail
ors Civil Relief Act to make
members of the armed forces pay
the District income tax, unless
they pay such taxes at home.
There was no estimate of what
these last three proposals might
bring the District in added
revenue.
Other suggestions were to
charge the sales tax on medi-
cines and drugs. on crutches, eye
glasses, wheel chairs. false teeth
and hearing aids.
The committee also suggested
a 2 per cent tax on admissions
and on communications, "princi-
pally local telephone exchange
service"
Another proposal involved sew
eral possible increases in the
gross earnings taxes on banks
and on building associations, plus
an increase of from 2 to 2h
per cent on insurance companies
net premium receipts.
Refuses to Speculate
Releasing the tax committees
figures, Mr.. Spencer refused to
speculate about the payroll in
creases the District may have to
meet because they are 80 un-
certain"
The Eisenhower administration
has asked Congress for a S per
cent increase for Federal and
District civil service workers, but
the Senate Civil Service Com
mittee has approved a 10 per
cent increase. Other compromise
figures are also under discussion
in Congress.
District fiscal officials have es-
timated that the lowest figure,
limited to the classified workers.
could cost the city So million a
year. If 1t was given to all Dis
trict workers the cost is esti-
mated at 81 million.
If the highest figure sets the
pattern, the increases could run
from $4 million to So million a
year.
Even without any pay in
creases, Mr.. Spencer said, Sub
stantial deficits are facing u.s."
These are expected to start
showing UP at the end of the
next fiscal year. which begins
July /. On the basis Of official
revenue estimates approved by
the Budget Bureau, the District
budget for fiscal 1856 shows a
deficit of $500 without the
usual 81 million reserve for "es-
timated supplemental" appropri-
ations.
/ More recent, unofficial esti-
mates by District officials have
increased revenue expectations
by $1,150.000 and have been re-
ported as wiping out the deficit.
Based on the new figures, how
ever. yesterdays estimates still
showed a deficit OF $710,489 after
restoration to the budget Of the
81 million reserve.
Using the Districts unofficial
estimate Of revenue expected.
yesterdays figures also showed a
cumulative deficit Of $50 million
at the end Of fiscal 1857 and of