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Mr. BATES. And I do not know what that revenue will mean. But have you any criticism of the efficiency of the department other than that?

Mr. TURNER. No, sir.

Mr. Bates. I think it might be a good suggestion that both the testimony of Mr. Turner and Mr. Keller be made part of the testimony of the day following the hearings, of the tax bills, so that we : will have a sequence of opinion.

Senator Cain. Yes.
Mr. TURNER. Thank you.

Mr. BATEs. Now, the next witness on this list this morning is Mrs. Gertrude Parks, of the Federation of Women's Clubs. Is Mrs. Parks here this morning?

Mrs. Wright. She was to appear with me, and unfortunately she thought that she was to be informed; she is on her way here and if you would not mind

Mr. BATEs. Then, Mrs. Wright, we will hear from you.

Mrs. WRIGHT. Would you rather hear from Mr. Press, and let me wait until she comes?

Mr. Bates. Very well.
Mrs. Wright. Thank you.

Mr. Bates. All right, we will hear from Mr. Press, of the Washington Board of Trade.

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STATEMENT OF WILLIAM H. PRESS, EXECUTIVE SECRETARY,

WASHINGTON BOARD OF TRADE, WASHINGTON, D. C. Mr. Press. I am William H. Press, and I am executive secretary of the Washington Board of Trade.

Mr. Bates, I have a very brief statement, and I understand you are trying to get through with these hearings.

Mr. Bates. If you have anything to add of any real substance, we will make it a lengthy statement.

Mr. Press. Last Tuesday, April 8, 1947, General McCoach, chairman of the board of trade's municipal finance committee, presented our over-all views to this committee. He submitted details of the program which the board of trade recommends for raising the revenue which we believe is required. An alternate proposal made by General McCoach recommended passage of a sales tax in the event that our primary program was impossible of accomplishment. We desire to submit very brief comments respecting the sales tax.

In our judgment, a 2 percent sales tax in the District of Columbia would yield $12,000,000 to $15,000,000 a year, rather than the $9,000,000 estimated by the Commissioners.

This estimate of yield is based on the experience in New York and New Orleans, the only comparable jurisdictions in the United States. A statement explaining our method of arriving at this figure is submitted now for the record.

Mr. BATES. Very well.
(The statement referred to is as follows:)

was

E'TIMATION OF SALES-TAX YIELD FOR THE DISTRICT OF COLUMBIA In order to make an adequate estimation of the yield to be expected, necessary to draw on the experience of fairly comparable cities. Accordingly, sales-tax yields for the year 1944 were taken from Where Cities Get Their Money

99538-47 -51

(Municipal Finance Officers Association). New York City, with a tax of 1 percent, collected $36,963,989 in 1944 and New Orleans $5,357,000. Although these cities vary widely in population from the District of Columbia, their per capita retail sales is estimated to be much lower; yet, it is interesting to note that the yield of the sales tax per dollar in both cities is very close. Per capita retail sales, 1944: New York City-

$616 New Orleans_

602

Sales-tax yield per dollar:
New York City (based on 2 percent)-

0.016 New Orleans--

.017 Yield per dollar was figured on the basis of the retail sales per 1944 in re lationship to the sales-tax yield for the same year. Based on these two yields and sales management's estimate of retail sales for the District of Columbia, the estimated sales tax for Washington was estimated to be: Based on New Orlean's tax.

$15, 042, 535 Based on New York's tax..

14, 157, 680

OTHER METHOD OF COMPUTATION

Based on the population estimate of 860,000 for the District of Columbia and by applying a ratio of per capita retail sales to per capita sales tax for both New York and New Orleans, a lower estimate of yield was obtained, as follows: Based on New York..

$12, 332, 400 Based on New Orleans_.

15, 265, 000 It should be borne in mind that although the New York City yield more closely approximates the probable yield in the District of Columbia, it cannot be considered entirely comparable. The New York tax exempts interstate commerce. However, it has been contended by various legal authorities that Congress, by enacting the District of Columbia sales tax, has the rightful power to tax property purchased in interstate commerce. This would, of course, make the yield in the District of Columbia considerably higher than the estimates.

New York City exemptions: (1) Food; (2) eyeg'asses; (3) cigarettes, (4) fuel supplies, ships' equipment, ships' stores; (5) newspapers and periodicals; (6) sales to New York City or semiprivate institutions; (7) sales exempt by State or Federal institutions; (8) automobiles to veterans, material used in converting property into emergency shelter.

New Orleans exemptions: (1) Livestock, poultry, and other farm products direct from the producers; (2) used articles taken in trade; (3) utilities; (4) newspapers; (5) fertilizer and farm products.

Mr. Press. This estimate of a $12,000,000 to $15,000,000 yield is predicated on the assumption that the sales tax, if enacted in the District of Columbia, will not be overly burdened with exemptions. Experience in other jurisdictions has indicated that evasion and avoidance of the sales tax is made easier as exemptions are multiplied.

The board of trade is in general agreement with the proposal to exempt food for home consumption and medicines. We believe, however, that the proposed exemption of meals in restaurants up to $1.50 is too high, and that if meals are to be exempted, the maximum should be $1, the figure currently being used in New York.

The board of trade believes that public utility bills should be exempt. It is suggested also that sales exempt from the act be those not over 15 cents. The bill provides that the Commissioners may exempt sales of 50 cents or less. Various District officials have been discussing the exemption of sales of 25 cents or less. We think that figure should be reduced to 15 cents, and suggest that to the committee, if it does specify the brackets for payment of the tax in the bill, start at a figure no higher than that.

I wish to submit for the record also a tabulation of items exempt from the sales tax in other States, which has been compiled from information on hand in our office.

(The tabulation referred to is as follows:)

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Mr. PRESS. I also submit a list and a map showing the States which have a tax on retail sales in effect in those States.

a (The documents referred to are as follows:)

STATES WHICH HAVE A TAX ON RETAIL SALES

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(Municipal Finance Officers Association). New York City, with a tax of 1 percent, collected $36,963,989 in 1944 and New Orleans $5,357,000. Although these cities vary widely in population from the District of Columbia, their per capita retail sales is estimated to be much lower; yet, it is interesting to note that the yield of the sales tax per dollar in both cities is very close. Per capita retail sales, 1944: New York City--

$616 New Orleans --

602

Sales-tax yield per dollar:
New York City (based on 2 percent).

0.016 New Orleans.-

.017 Yield per dollar was figured on the basis of the retail sales per 1944 in re lationship to the sales-tax yield for the same year. Based on these two yields and sales management's estimate of retail sales for the District of Columbia, the estimated sales tax for Washington was estimated to be: Based on New Orlean's tax_

$15, 042, 535 Based on New York's tax.--

14, 157, 680

OTHER METHOD OF COMPUTATION

Based on the population estimate of 869,000 for the District of Columbia and by applying a ratio of per capita retail sales to per capita sales tax for both New York and New Orleans, a lower estimate of yield was obtained, as follows: Based on New York..

$12, 332, 400 Based on New Orleans.

15, 265, 000 It should be borne in mind that although the New York City yield more closely approximates the probable yield in the District of Columbia, it cannot be considered entirely comparable. The New York tax exempts interstate commerce. However, it has been contended by various legal authorities that Congress, by enacting the District of Columbia sales tax, has the rightful power to tax property purchased in interstate commerce. This would, of course, make the yield in the District of Columbia considerably higher than the estimates.

New York City exemptions: (1) Food; (2) eyeg'asses; (3) cigarettes, (4) fuel supplies, ships' equipment, ships' stores; (5) newspapers and periodicals; (6) sales to New York City or semiprivate institutions; (7) sales exempt by State or Federal institutions; (8) automobiles to veterans, material used in converting property into emergency shelter.

New Orleans exemptions: (1) Livestock, poultry, and other farm products direct from the producers; (2) used articles taken in trade; (3) utilities; (4) newspapers; (5) fertilizer and farm products.

Mr. Press. This estimate of a $12,000,000 to $15,000,000 yield is predicated on the assumption that the sales tax, if enacted in the District of Columbia, will not be overly burdened with exemptions. Experience in other jurisdictions has indicated that evasion and avoidance of the sales tax is made easier as exemptions are multiplied.

The board of trade is in general agreement with the proposal to exempt food for home consumption and medicines. We believe, however, that the proposed exemption of meals in restaurants up to $1.50 is too high, and that if meals are to be exempted, the maximum should be $1, the figure currently being used in New York.

The board of trade believes that public-utility bills should be exempt. It is suggested also that sales exempt from the act be those not over 15 cents. The bill provides that the Commissioners may exempt sales of 50 cents or less. Various District officials have been discussing the exemption of sales of 25 cents or less. We think that figure should be reduced to 15 cents, and suggest that to the committee, if it does specify the brackets for payment of the tax in the bill, start at a figure no higher than that.

I wish to submit for the record also a tabulation of items exempt from the sales tax in other States, which has been compiled from information on hand in our office.

(The tabulation referred to is as follows:)

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Mr. PRESS. I also submit a list and a map showing the States which have a tax on retail sales in effect in those States.

(The documents referred to are as follows:)

STATES WHICH HAVE A TAX ON RETAIL SALES

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