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The Financial Crisis We Face
D. C. Toys With Getting Extra $3 Million From Income Tax One big source of additional revenue for the municipal gov ernment of the Nation's Capital is the District’s individual in come tax. The tax was first established by Congress as a source of local Seventh end lest es a Series revenue 16 years ago. It was re vised 10 years later in 1949 and again last year in 1954. In this fiscal year, which ends June 30, it is expected to yield $5.1 million. At present rates, it is calculated to produce $5.7 mil lion in the next fiscal year. This year, at any rate, it is producing 3.9 per cent of the revenues received in the Dis trict’s General Fund bank ac count. which finances every municipal activity except high days, water works, sanitary sew ers and motor vehicle parking. Facing a flood of spiraling costs and a tidal wave of new pay increases for city employes, ; District tax experts have rec ommended to the Commission ers that it be increased by $3 million if Congress refuses to impose a gross earnings tax on payrolls, which would tap sal aries of suburbanits who work In Washington but live in Vir ginia and Maryland. Changes Terms The tax was increased one percentage point in each bracket only last year. This was under the Public Works Act of 1954, designed to help finance a 10- year, S3O million program of city building. The present proposal would Involve no basic change in rates. It calls for a decrease in in dividual exemption from $4,000 to $2,000 and would adjust the present scale of rates to a max imum of 5 per cent on taxable income over $25,000. The present scale is 21 2 per cent i on the first $5,000 of taxable in-' come. 3 per cent on the second, j 3V 2 on the third and 4 per ceyt i on all over $15,000. The exemp- i tlon is $4,000 for each taxpayer and SSOO for each dependent. The new proposal would set rates at 2% per cent on the first 15,000, 3 per cent on the second, tVa on the third, 4 per cent on all taxable income over $25,000 The individual exemption, of course, would be $2,000 for each taxpayer. Could Cause Explosion This plan itself is likely to set sffff an explosion in Congress,! which raised the exemption to 14,000 in 1949 to compensate for i enactment of the sales tax here.i Under the tax as originally enacted, the District charged 1 per cent on the first $5,000 of i taxable income, l'/a per cent on | the second $5,000, 2 per cent on ; the third $5,000, 2Vi per cent! on the fourth $5,000 and 3 per cent on all taxable income over $20,000. Originally, the act allowed a personal exemption of SI,OOO i for individuals and $2,500 for couples. I And, of course, there was the < standard list of Washingtonians ] exempted completely—members i of Congress and those of their t staffs who live in the congress- J Ffreel I S/ / AS A GIFT FROM MR. BOND \\y I This 18 pc. Sat of Haat Proof, 22-kt.' I Gold-Rimmed Dinnerware I II • VTr : ' W" *1 WHY DOE* MR. Jr xw bond give I you this „ yp|| LOVELY GIFT? Bacauio of your cour tasy in giving Mr. Bond's representative ::a moment* of . K'mKfltppM&wQKSS&fM/ your tima. Mr. Bond ghpßiln taaii you ihould get ~thi* gift at a token of opP r ® c iation. You mm I ’ f J L .fBI ar ® absolutaly V, " no obligation. ■ rail LA. 1 daily 9 to 9 for free estimate on I REUPHOLSTERY IrTuPCOVEW SOFA a CHUR I complotoly roupholitor in your choic. of S hundreds of gorgeous now 1995 fobrki and fgiipholiforgd If roMId jt to YOUR ordor Into . Iraoutiful . ■ NEW tuito—at about HALF tho coit of now SlipcOVOTOd furniture of comoorablo boauty and com- | fort. Call Mr. Sond now at LA. * 2444 for |fe MR M H your froo oitimato and froo 18 pe. lot of XL ■ m 22-kt. gold-rinrarad dlnnorworo. H [no monthly PAYMENT! jD I FOR 2 MONTHS “w W W M i’fl 1052 Meetaao Avema . B ; J UWBINCIJO6»J| man’s State, the President, and officials appointed by the Presi dent with consent of the Senate who sesye at the Chief Execu tive's pleasure (Cabinet mem bers). In 1949, when Congress im posed a sales tax on Washing ton, it sought to ease the blow on low-income people by raising the floor of the income tax, in- i creasing the personal exemption to $4,000. Rates were boosted to l'/2 per cent for the first $5,000 of taxable income, 2 per cent for the second $5,000, 2Vi per cent for the third $5,000 and 3 per cent for all over $15,000. The list of those-fully exempt was retained intact, however. Domicile Terms Changed One other change was made affecting those who might have 1 to pay the tax. Originally, the tax did not hit anyone who was “domiciled” elsewhere, and who alleged that he intended some day to return to his original home. Finally, however, it was re vamped to apply to anyone— except those totally exempt— who spent seven months or more, of the year in Washington. How ever, if they actually paid an income or intangible personal property tax in their home States, they could deduct the payment from what they owed the District. Since the District tax is usually lower than the Income taxes of any of the States, the taxpayer usually winds up owing the District nothing. The latest change came last year under the Public Works Act, when the taxes were raised j one percentage point in each ’ bracket. While the only proposal to j which a price tag is hitched— i $3 million a year—is to cut the j I personal exemption figure to j $2,000, District tax officials also | have recommended abolition of i I the provision which lets “non ! resident” residents wipe out the taxes they owe the District by paying taxes in their home States. District Finance Officer James L. Martin, however, says the change would produce a "con siderable amount” in additional taxes. And, he tells the story of a friend who works for the Fed eral Government—who has lived ; in Washington for 20 years and \ brought up his children in Dis- : | trict schools, but who has not j ! paid a cent in local income tax j to finance those schools. The reason is that his friend maintains a residence in Massa chusetts to retain his civil serv ice quota status, and pays in come taxes there. Every year he files a District individual income tax return, shows that he owes the District X dollars in taxes,; but has paid more than that to Massachusetts. Thus, he pays the District nothing. Another recommendation was to amend the Soldiers and Sail- | ors Civil Relief Act to require payment of the District’s indi vidual income tax if similar taxes are not paid to the serv iceman’s home State. Higher Taxes Here Opposed The North Cleveland Park Citizens’ Association last night opposed any increase in District taxes on real estate, incomes or personal property. The association also urged the Federal Government to pay a fair share of District expenses. The resolutions, made on a mo tion by Elmer Dentzer, Jr., were directed to the fiscal relations committee of the Federation of j Citizens’ Associations. A committee was appointed) to present a citation to John B. Dickman, jr., former president and member of the association for 17 years. R. Hamilton Cawood was ap pointed chairman of the group’s civil defense committee. Mrs. T. Ellis Allison, president, conducted the meeting in the • Hearst School, ' MHIf I THBr tt Y w IHB 1 Ml Ih * 4 Hi, Hull f J M *I ■ 1 M I > 1 7mT *¥ f Big-family me! Brand - new model II JIIH in i I UW J »11f U Hi if f> b,..j _„ w I -w!d!h s*i A A,95 by ,omou * maker - SdLdL.BO ■ ihalvot, GI a IttV Hos safety wringer Qll M Our Reg. Modern Arm Chair Jw Mm Aluminum Chair in or 9 teen heavy chartreuse, aqua >B3 canvas scat, light alu- $ A ,49 or red modern tab- JNfJL 1— \ f.Wl ’B JJBPWminum frame. CASH *£L and carry; M 30x40x48 inch wrought Iran Rich, emart (hades of grey, 'T*yMlppglSi extension table has rad or cocoa, light green, dark green, %. stainproof and scratchpreof. 4 woven for long wear. Hat latex ' fnortheast store Arlington srntX l DENNING RD. & MINNESOTA AVS. ■ ■■ » B 655 N. GLEBE RD. PARKINGTON j V* 111 *'*- l> 8 ftrtist FtQI 0(M It 1.H.U9 p. si. isHy— Free Pittat/ Jupiter (Way Up There) Sends ‘Blips' Down to Seneca, Md. The little town of Seneca, Md., several miles northwest of Potomac, has something out of this world. Blips. Blips from Jupiter, by Jove. The intermittent radio waves, the first such Interplanetary phenomena recorded, were picked up by the Carnegie Institution of | Washington’s large radio “tele scope” near Seneca. Dr. Bernard F. Burke, a mem ber of the institution’s Depart ment of Terrestial Magnetism, and Dr. Kenneth L. Franklin, a research fellow of the institu tion, reported their find today at the 92d meeting of the Ameri can Astronomical Society at Princeton. The source of the radio waves, I bursts of static resembling thun ' derstorm interference on a radio, is unknown. Carnegie scientists speculate that the waves may be caused by gigantic disturb ances in the atmosphere of the planet. Jupiter, with a diameter more than 12 times that of the earth, is in reality a little universe. It is the largest of the sun’s planets, rotates on its own axis at great speed, and is surrounded by *t least 11 satellites. Result of the discovery is still < a matter for discussion. Carnegie scientists say that as long as Jupiter keeps blip ping. they’ll keep listening. Collapsible Tubes in '92 PHILADELPHIA.—The col lapsible metal tube, such as used to contain toothpaste, was first used commercially in about 1892. ; CU Troupers See Eisenhower A group of Catholic Univer sity players received best wishes from -President Eisenhower yes terday before leaving today on a seven-week trip to entertain American armed forces in Eu rope. The group. Players, Inc., the graduate touring company of the Catholic University drama | department, plans to „ present two plays on the tour—Shakes peare’s “Julius Caesar” and Mo liere’s “The Would-be Gentle man.” The Rev. Gilbert V. Hartke, founder of the company and leader of the tour, told reporters that Mr. Eisenhower thanked the group for going to Europe and said he recognized the need THE EVENING STAR. Washington, D. C. WXPWXaPAT, AMtIL O, l»ag of this kind of entertainment for servicemen. The group entertained troops in Korea in 1952 and 1953. It Foundry Methodist Church 16th and P Sts. N.W. Minister* i Frederick Brown Harris F. Norman Van Brunt Wednesday, April 6—B p.m. The Pension Portion of "THE MESSIAH," by Handal, sung by Foundry Choir. Thursday, April 7—B p.m. Comma mo noting Christ’s lost Sup par with His disdplas, tha Holy Com* munion wil bo administered by tho Ministers. Friday, April B—l 2 (noon) ta 3 p.m. SERVICE OF MEDITATION AND DEVOTION, including tho. tinging of “THE SEVEN LAST WORDS.” by tho Choir A-21 has just finished a 35,000-mile tour of the United States, pre senting plays at universities and high schools.