Evening Star Newspaper, June 28, 1937, Page 5

CONFEREES AGREE ~ ONRELIEF PLAN $8,000,000 Cut From Funds Earmarked for P. W. A. Quick Vote Seen. BACKGROUND— What to do about “this business of relief” was so uncertain in mind of President Roosevelt last January that he postponed for three months suggestions to Congress concerning relief needs for coming fiscal year. When he finally asked for $1,500,- 000,000 and free hand in spending it, House saw losing fight for ear- marking funds, and then some Senators sought in vain to reduce the appropriation, Leader Robinson among them. B the Associated Press. Senate and House conferees reached & speedy agreement today on the ad- ministration’s $1,500,000,000 relief bill, after they had trimmed $8,000,000 from the funds earmarked for the Public Works Administration. By eliminating an item for unspeci- fled “miscellaneous projects,” the con- ferees cut the P. W. A. funds from $367.000,000 to $359.000,044. Few other imporiant changes were made in the bill Congressional chieftains said they expected to place the measure before both Houses for final approval today The Conference Committee elim- Inated a provision which would have required the Works Progress Admin- istration to make public the names, positions and salaries of all admin- istrative officers It had been written into the bill at the request of Senator Davis, Repub- THE EVENING STAR, WASHINGTON, D. C. Speakers as Senators Open D. C. Tax Hearing ¢ | Senator Copeland of New York stress- MONDAY, JUNE 28, 1937. those who are not permanent Distriet residents, but here only because of the Government, Nichols admitted he doubted whether Congress would be able to “draw that hairline distinc- tion between Government employes | who are permanently domiciled here and those here only during the emer- gency.” Defends Realty Levy. Nichols contended the 20-cent in- crease on real estate is not exorbitant, but that it could probably be discon- tinued next year if the next session of Congress worked out an income tax. When Nichols argued the present $5,000,000 lump sum is enough for the Federal Government to pay, the dis- cussion turned to fiscal equity, with | ing the fact that the constant expan- slon of Government buildings and | reservations here is ‘aking more and books and driving local taxpayers out | into other taxable jurisdictions. Nichols disagreed with Copeland. | In defending the gross receipts | business levy, Nichols argued existing business license fees are too low. The discussion brought out, however, that these annual license fees were not fixed for revenue raising purposes, but to cover the cost of municipal inspec- tion of the various types of establish- ments. Answering the contention business does not now pay enough, Whiteford Representative Nichols as he today on the District tax bill. Commissioner Allen. At left is testified Representative Kennedy Maryland discussing the bill. Senators King and McCarran in a brief dis- cussion during the hearing. —Star Staff Photos. vo, | cited some of the effects of the pres- | ent intangible personal tax law, and | | also the social security pay-roll taxes, Social Security Tax. ! Whiteford asserted that the social | security tax of 3 per cent on pay | rolls would be equivalent to 23 per | cent off & merchant's profit, and that —_— P A e " If You Are Troubled With Rheumatism S Arkansas. aline. Deeply istyine. En- physicians for over 30 years. Phone for bool more valuable property off the tax|[Jg & new tax of three-fifths of 1 per cent on gross receipts would be an- other 23 per cent off profit, or 46 per cent combined. In most cases, he insisted, mer- chants will not be able to pass the new tax on, but will have to absorb it. He pointed out the milkman can- not add less than a cent to a quart of milk. He also reminded the com- mittee merchants here cannot have dren, you are you deal == LR Meaty Santa Clara Kellogg’s Cornflakes 4SC0 Baking Soda ASCO Plain or Hot PRUNES Hurlock Cut Stringless Beans WHEATIES; Breakfast of Champs wkde A—S different prices on well-known come modities and products. Benjamin C. Marsh, representing the people’'s lobby, told the commite tee that only two taxes were necese sary—a small and not very progrese sive tax on incomes, with the Federal exemptions, and a’1 per cent tax on the value of land exclusive of ime provements. The land tax, he estie mated, would yield $4,830,000. SERVICE HAT SATISFIES— AND CONSISTENT SAVINGS Whether you shop in person or send the chil- always assured quality food, courteous service and worthwhile savings when Where Quality Counts and Your Money Goes Furthest HOM-DE-LITE MAYONNAISE Fresh, creamy and dependable quality. 12 216w 39C HOM-DE-LITE SALAD DRESSING Has & snap and zest you'll appreciate, 8 oz. jar |<=- ) 228 10c | 19¢ | 29¢ Mother’s Joy French Dressing bot. 13¢ pint jar quart jar 211 2 cans 15¢ 2 pkgs. 23¢ pkg. Te 16 oz. pkg. 5S¢ lican, of Pennsylvania, who contended it would stop use of W. P, A. jobs for *political purposes.” The National Resources Commit- tee it believes the House bill would | &re not legal residents of the District.” require Washingtonians to produce; With all but legal residents ex- $12335.000 of new revente. After | mpted Cotrell sald the tax Jeaves | allowing for $1,000,000 of tangible | out ““one-third or more"” of the taxable come tax was dropped in the House [ up in court, and the uncertainty of mainly because of the difficulty of | the yield. After discussing the ques- Mountain Valley Mineral Water | 11 t. N. writing a measure that would stand | tion of exempting from an income tax 05 K § == = =1 reg. 13c tee. a planning board which has oper- ated largely with relief funds, was exempted from a clause which limits sdministrative costs of all agencies using relief money to 5 per cent. A number of other agencies were | exempted in the original bill. Tax (Continued From First Page.) out the hizh taxes, inserted on House, and resto heritance rates. per cent, as provided in the bill as reported to the House by the House District Committee. The estate tax is left as it was. The Commissioners will testify at the ciose of the hearing before the committee acts on these suggested changes. “Gross Receipts” Meaning. Another proposed amendment in the reprint would change the meaning of “gross receipts” in the business privilege tax. as applied to con- tractors. It would define contractors’ "gross receipts” as “their total re- ceipts less money paid by them to sub-contractors for work and labor performed and material furnished by such sub-contractors in connection with such work and labor.” Chairman King started the hearings with the statement the committee hopes to get the bill out by July 1, if possible, but this appears unlikely. The opening session was marked by defense of the House bill by Rep- resentatives Kennedy and Nichols of Oklahoma, members ot the House committee that drafted it. Kennedy, however, joined in op- posing the special chain store levy that was added to the business priv- ilege tax on the floor of the House, on motion of Representative Dies of Texas. It was not in the original committee bill. Challenges Nichols’ Claim. Speaking not only for the Mer- chants and Manufacturers’ Associa- tion, but for other business men, also, Whiteford challenged the claim of Nichols that the storekeeper will be able to pass on to the consumer the business privilege tax of three-fifths of L per cent on gross receipts. Pointing out that this levy would apply to virtually every business ven- ture, profession and vocation except the man working for a salary, White- ford told the committee at least 50,- 000 persons would have to take out the $10 license fee and then pay the three-fifths of 1 per cent on his gross receipts. Whiteford declared the term “busi- ness privilege” tax is & misnomer be- cause gross receipts bear no relation to the privilege of doing business. To illustrate, if one lawyer receives $100,000 a year gross and another 810,000 gross, they both are taxed at the same rate, although both have same privilege. Before a crowd that overflowed into the hallway, the hearings opened with the Municipal Finance Committee of the Board of Trade presenting its plea for revision of the House program to avoid raising more than is needed to balance the city's budget for the com- ing year. Trade Board Program. Retaining some and eiiminating other features of the House bill, the ‘Trade Board urged the following tax program: Increase in insurance premium tax, $200,000. Auto weight tax, $1,500,000. Increase in liquor tax from 50 to 80 cents per gallon, $7.0,000. Estate tax, $800,000. Increased rate on tangible per- sonal property, of 20 cents per hundred, $2.500,000. ‘The statement of Edgar Morris, spokesman for the Trade Boar pointed out this schedule would pr duce $5,700,000. To this would be added the $1,000,000 additional the assessor expects to collect from title 1, which tightens enforcement of the existing personal tax law, making $6,- 700,000. Extension on Loan Sought. The trade body then suggested that Congress grant the District an exten- sion of time on repayment of its P. ‘W. A, loan amounting to $1,000,000 a year, which would leave the city with $7,700,000 of new revenue, or approxi- mately the amount of the deficit under the 1938 appropriation bill, as figured by the Board of Trade. The statement previously had shown that the supply bill calls for less than $7,000,000 of new revenue for the city's general fund, and about $1,000,000 to meet requirements of the gas tax fund, or $8,000,000 in all. The trade board’s recommendations would eliminate the controversial business privilege tax based on gross receipts and including the heavy spe- cial levy tax on chain stores. It also would eliminate the inheritance tax, rates on inheritance the floor of the previous in- taxes deducted from the business privilege tax, the board arrived at an estimated yield of $11.335,000 from | the House measure, or far more than is required Summing up its substitute program, | the board stated: “It appears to us that such an ar- rangement would be entirely adequate to meet conditions during the coming | fiscal year, that the basis of taxation will be reasonably fair and just, and | that adoption of this program will eliminate from further consideration | the | running from 1 to 5 certain taxes which are admittedly arbitrary and inequitable, and which will have a most unwholesome effect on the economic structure of the city and place a tremendous disad- vantage upon local citizens in every | | walk of lfe, whether they be con-| sumers or business men.” Says Federal Share Too Small, At the outset the Trade Board em- phatically registered its belief that the Federal Government is not bear- ing its fair share of the expenses of the Capital. For the coming year the Federal payment is only $5,000,000 toward & total outlay of almost $46.000,000 The statement reiterated the board's opposition to a local income tax, but there is no likelihood the Senate com- mittee will attempt to revive that | issue in view of the opposition to it | in the House. | The board also pointed out that it originally supported the Commission- ers in their request for a 2 per cent sales tax on all except food, medi- cine and possibly basic clothing ne- cessities, “Despite the fact that the passage of & 2 per cent sales tax would very nearly offset the threatened deflcit,” the board said, “we have not recom- mended it in this brief because it seems obvious that the Congress will | not support such a measure.” Features in House Program. Five features of the trade board program are already in the House bill, | namely: Insurance increase, auto, weight, estate, tangible property in- | crease and tightening of collection machinery of the personal property law. The board’s chief recommendations, therefore, are substitution of the | liquor tax for the business privilege ! levy, dropping the inheritance levy and the requested postponement of the P. W. A. reimbursement this year. In urging modification of the in heritance and estate tax title, th board explained: “We urge the elimi- | nation of the inheritance tax feature of this title. Substantial taxes are already assessed against estates and the adoption of a further tax on in- heritances at the rates prescribed in this bill constitutes, in our mind, ex- cessive taxation against these funds.” Robert J. Cottrell, secretary of the | Board of Trade was questioned at length by members of the committee on various phases of the board's rec- | ommendations. | He was interrupted, however, by Chairman King, in order that the committee could hear Representatives | Kennedy and Nichols. Cottrell was to continue later. Questioned by King. Asked by Senator King why the Board of Trade objected to the busi- ness privilege tax, Cottrell charged this levy “was developed practically over night, raised too much money, more than is needed by the District, but could not be put into operation for at least 60 or 90 days.” “You cannot tax business a flat rate of three-fifths of one per cent,” he said, “because many operating on & small margin would go out of busi- ness.” Concerning the proposal to tighten up on collection of tangible tax, Cot- trell, in response to questions by Sen- ator Copeland, estimated a million dollars a year might be realized if the Commissioners were granted power of subpoena. The personal property tax, Cottrell charged, had been largely avoided by persons who “do not re- port.” Senator Capper pursued a series of questions as to the proposed income tax levy, which had been in the measure when reported to the House, but was eliminated in the House, Cottrell told the committee the Board of Trade felt income tax was a fleld for the Federal Government, and the District should stay out of it. Chairman King said for 15 years he had been trying to get an income tax for the District, was still in favor of it, but in view of the situation now, he would be a ‘“realist,” and recognize it was impracticable now to attempt further. Senator Capper insisted 31 States had an income tax and charged that a “great many wealthy people come here because they escape payment of an income tax.” Questioned on Income Tax. Pressed by Senator Capper on the income tax question Cottrell said the but retain the estate tax feature of | apparent reason why it had failed was that section. | be | turniture. incomes, and produces too little from | the remainder.” Kennedy stoutly defended his House Tax Subcommittee for the work it had done in framing the bill, admitted | the measure was not perfect, could improved by some amendments, | but felt it was the best that could have been done with the time avail- able. Further study should be given, he said, so that next year, a better system could be worked out | Objecting to action of the House in raising rates on the inheritance tax, Kennedy suggested the House amend- | ment should be stricken out and the rates returned to the lower scale in- troduced by the committee. While explaining the provisions for tightening up on collection of the tangible tax, Kennedy was asked by Senator Copeland | “What's going to happen when it is discovered that taxpayers here have been evading the law?" | The provision so far was designed | only as a tax collection measure, Ken- | | nedy said, not to catch back taxes or | institute criminal proceedings. ’ Defends Business Levy. | Defending the business privilege tax, which had just been attacked by the Board of Trade, Kennedy charged there were & ‘“number of firms in Washington doing up to a million dol- lars worth of business, who pay taxes | | to the District only on some office The business privilege he said. was neither “a sales tax | nor a gross income tax,” but a tax on gToss receipts. Kennedy opposed the chain store tax inserted on the floor of the! House by Representative Dies of Texas. | A chain store bill had been pending in the House District Committee, he aaid, but it had not been included in the omnibus tax measure. “Ungquestionably,” he declared, “it would work & hardship on small mer- | chants.” To illustrate this he said it would apply, for instance, to a laundry | which had a number of collection | points with nothing more than a “store front” and a place from which | to collect the laundry. If it had 20 | such places, the bill would exact a tax from each, he said. | Charge of Nichols. ‘ In defeating the proposed income | tax provision in the ‘House. certain | members of Congress definitely must | have had in mind the fact that they would have to pay the tax themselve it was charged by Representative Nichols. The income tax was characterized y him as “the most controversial” factor in the measure. “I doubt if any one can make a very satisfactory explanation,” he said, “of what was in the minds of | members voting against -that income | tax provision.” “It certainly was in some of their | minds that they would have to pay the tax themselves. “But to my' way of thinking, it would be impossible to tax them here, except as a non-resident. If they are subject to a tax here it would be impossible for them to be & resident of the State they represent back home. The cnly way to reach | those salaries would be tax them as| | non-residents on that portion of their income earned in the District of Co- | lumbia. A’ bill might make that portion taxable.” Reasons for Vote. Members of Congress may also have | had in mind, he said, that their clerks | would have to pay the tax, in addi- tion to their expenses of travel, and, in many cases, maintaining a home in two places, here and back home. Nichois flatly declared that ‘“resi- dents of the District, who live here, call this hcme, use it more than any transient, snould pay as much com- parably as any citizen, in income tax, contributing their share to the Gov- ernment.” Representative Nichols said the in- Lowest Summer Prices Now in Effect White Ash Stove $11.30 per ton White Ash Chestnut $11.30 per ton White Ash Egg $11.30 per ton White Ash Pea $9.80 per ton J. EDW. CHAPMAN Coal Fuel Oil 37 N St. Nw. | No. 3609 CATSUP bot. because “we feel great influence was The trade board told the commit- brought to bear to exempt those Who Agent, Wayne Oil Burner LOANE’S Tl This Heppelwhite —and 21 Others All that remain in the Sale of Finest Bed Room Furniture at Reductions Up to 50c on the Dollar— Only 2 Days Left. welfth Streef_; Group Dill or Sour Majestic ICKLES ASCO or Sleigh Bell This annual sale of the finest Bedroom Furniture will end with store, closing Wednesday night. distributed through the various periods. Remaining groups are well If you haven’t attended the sale and viewed these examples of fine craftsmanship you are missing an opportunity that cannot recur for many months. May we again suggest that the actual saving will justify an anticipation of your needs and that any selection you may wish to make now will gladly be held for delivery at any later time upon deposit. . $435 Heppelwhite Group in genuine Hor tion; twin beds of the chair-back type d $695 $340 $470 $325 an Empire Group, fruitwood construction with th painted and decorated in French gray and green Early requisites except the bureau. craftsmen; genuine Amazon mahogany Heppelwhite Group touched with Sheratan influ the payment of a mahogany construc- e twin beds English Oak Group, censists of full-sized bed and all the Sheraton Group, a product of our own Company of Master- ence; sleigh- type twin beds; genuine Amazon mahogany construction.___ Modern Group, of solid maple finished in the blond hanging mirrors $295 $360 $460 $395 French Provincial Group, a Louis XV1 tempered wi rural thought; genuine walnut construction inlays and handsome gilt mirrors Modern Group, silver sycamore decorated in blu tone of silver. Bureau and chest are designed in tions and may be used end to end $690 tone; crystal th the French Sheraton Group, genuine Honduras mahogany with satinwood e and deeper same propor- Chippendale Group, designed after*the Chinese motif, with graceful serpentine fronts; genuine Cuban and Honduras mahogany - - Louis XVI Group, a combination of wild cherry, maple and burls. Mirrors are copies of famous French ori Empire Group, in which the Sheraton influence is ginals pronounced. Construction is genuine Honduras mahogany finished in the rich brown tone, rubbed dull Enjoy Perfect Rest on the New Sloane Zepher Mattress Featured in this sale of Bedroom Furniture at Box Springs to motch——s’].so W.& J. 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