Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-10-24
10 Steps Proposed
To Raise D.C.Taxes
Budget Office
Gives Plans to
Commissioners
BY CHARLES PIERCE
Star Staff Writer


Ten tax increase alternatives
were suggested to the District
Commissioners yesterday as
part of a plan to help avoid
a deficit in the city's general
fund next year.
These potential sources Of
additional revenue were sub
mitted by the Budget Office Of
the Department of General Ad-
ministration.
The Commissioners will now
have to decide what tax in
creases to seek.
The Commissioners tax-in-
crease authority is limited to
the real estate levy and the
business inventory tax. The
Commissioners can only recon-
mend other tax boosts for APP
proval by Congress.
Taxes Suggested
The tax sources suggested,
with comments by the Budget
Office on each, are:
Real estate tax-It is the sim
gle most important source Of
tax revenue for the District. 1t
was raised 20 cents in fiscal
1862 to $3.50 per 500 of as
Lsessed value. If raised 20 cents,
the amount by which this tax
has usually been boosted in the
past, it could provide an addi-
tional SIS million in revenue.
At present the real estate tax
on a Washington home valued
at $4,000 is $275: -Four of the
six other local Governments in
the Washington area charge a
higher real estate tax for a
| $40, 900 home.
/ Alcoholic Spirits
Alcoholic spirits : This tax
:. was raised in fiscal 1862 from
1925 per gallon to $3.50 per
gallon. Another rs : cent in
crease would yield 100000 in
revenue.
An increase in the Districts
J spirits tax rate will eliminate
? part of the favorable price diff
: ferential that now exists be-
: tween the District and sur
:. rounding Jurisdictions, Never
9 theless, District liquor retailers
e would probably continue to sell
i liquor at lower prices than in
surrounding jurisdictions.
BERTHE tax rate on beer
has been $3.50 per barrel since
1885. If this tax were doubled
Lit would yield $775,000 in addi-
tional revenue.
Wine-The current tax rates
of is cents on light wines, SO
cents on other wine and As
cents on champagne and SPAR
king wines have not been
raised since 1856. These rates
are comparable with those in
most other States. Raising these
rates by 10 per cent would pro-
vide an extra $4,000, in reve-
nue..
Cigarette Tax
Cigarettes-The District tax
on cigarettes has been two
cents per pack since 1854, lower
than the rate in every State
which taxes cigarettes except
Arizona, which also imposes a
2-cent-per-pack tax. Boosting
the present District tax by 2
cents would yield So million.
Sales tax on three items
Broadening this tax to include
now exempt local telephone
service. cigarettes and food
purchased for home conSump-
ton would provide an addi-
tional $6,250, 900 in revenue.
Extending the tax in this man.
ner would not be out of line
with the, practice in States
with, a similar tax.
Income - Applying present
income tax rates to a lower
level Of income. The 2.5 per cent
tax rate would start at the
$4,000 taxable income level
rather than the present $1,000.
This would provide an addi-
tionaI SO million in revenue
and make the District income
tax more comparable to Vir-
ginia and Maryland.
Unincorporated business
Observation-Disclosures this tax
/ to include the income Of pro-
fessional men such as attor-
neys, doctors and engineers,
who are now exempt, could
yield an additional $1,600,000
in revenue.