Evening star., 1955-11-22
D. c. Heads Study Plan
For Tax On All Earnings
Would Cover
All Working
In Washington

A Citizens Advisory Council
proposal to levy taxes on all
gross earnings in the District
and to increase existing taxes BY
about $7.8 million was under
consideration by the Commis-
sioners today.
The citizens advisory group,
headed by Attorney William e.
Leahy, gave first priority in a
four point package tax proposal
to a " per cent tax on all gross
earnings.
The tax would apply to every
one who makes money in the
city, regardless Of his place Of
residence. But District residents
who pay such taxes would be
given a credit against city in
come taxes.
Previous efforts to impose
such tax have failed because
of the opposition of Congress
men from Maryland and Vir-
ginia.
Other Tax Proposals
Other tax provisions recon-
mended. in order Of priority,
were:
/. Reduction Of individual in
come tax exemptions from $4,000
to $1,000. A man and wife would
lget $4,000 exemption, with $500
for each dependent.
The council also recommended
rate increases in the top brackets
to provide a AZ per cent tax on
taxable incomes in excess Of
$40, 900 and 5 per cent in excess
lof $4,000. The current rate
provides for a per cent rate on
taxable income in excess Of
ISIS, 900.
The council also ~ indorsed
a start of withholding taxes on
incomes as of October /, 1856,
land co suggested "considera-
tion be given" to applying a nat
IS per cent tax on all taxable
incomes above $5,000-the for
mula used in Virginia.
I Tax on Wine, Beer
/ 2. Increased taxes on wine.
'Ibeer and spirits as follows: Wine
New 20-cent-a-gallon tax on
table wine, an increase from 20
cents and 80 cents a gallon to As
cents a gallon on other wines
land champagne. Beer-Increase
,Ifrom $1.25 to So per barrel.
lSpirits-Increase from 81 to
liS1.25 per gallon.
i 3. Increase real estate taxes Of
10 cents on each 500 Of as
sesed value, from 1920 to $3.50.
I Officials have estimated previ-
Iously that a gross earnings tax
would net about Sc million. The
Advisory Council proposal to give
District residents a credit against
income taxes, however, officials
said today. would reduce this
estimate. perhaps by as much as
half.
| The other increases, officials
ESTIMATED. would produce about
1888 million from higher income
taxes, $2.l million from the beer.
wine and spirits increases and
$l.9 million from the real estate
raise.
Latest Step in Program
The council recommendations
are the latest step in a series of
moves leading toward the city
heads eventual presentation to
Congress of a new tax program
to help offset spiraling city ex-
penditures.
Mr.. Leahy declined to say
whether the council vote was
unanimous.
All the council proposals would
feed additional revenues into the
Districts General Fund, which
pays for most administrative
Expenses Of the city and such
activities as schools. hospitals
and welfare institutions.
Various forms of earnings and
payroll taxes have been pro-
posed in the past. One objec-
ton raised to some of the earlier
forms has been that SO many
exemptions might be involved
that the legality of the tax would
be questioned.
The councils recommends
ltion would go beyond levies i'm
posed on payroll wages, however.
to cover earnings of professional.
Self-employed and other persons.
| Mr.. Leahy said his group is
aware of questions raised in the
past, but that I'VE felt some
thing ought to be tried in regard
to those who work here and use
icity facilities and contribute
nothing in the wav of taYes