Evening star., 1932-06-09
FIGHT PROVISION
IN MAPES BILL
Maryland, Virginia Groups
Hit Tax on Non-Resi-
dent Incomes.

Protests against a provision in the
MapeS income tax bill for the District
which would tax the income on nom
residents were made to the Senate D:s-
trict Committee yesterday afternoon by
j. Bond Smith, chairman Of the Legts-
lative and Legal Action Committee of
the Montgomery County Civic Fedora
ton. and H. j. McGrath Of the Arling-
ton County Civic Federation.
The committee concluded hearings
on the bill shortly after receiving these
protests, but Chairman Capper said he
was uncertain when report would
be prepared.
Money Spent Here.
Smith pointed out that probably
more than one-half of the income of
the average resident of Montgomery
County is spent in the District. AS a
result, he said, this increases the in
come Of the District and the taxes
which the District will derive, while
Maryland will not be benefited and the
tax will not make possible an increased
amount of taxes for Maryland.
He called attention to resolution
adopted by the Montgomery County
Federation describing the bill as 'inex-
pedient and oppressive" because it seeks
to impose for the benefit of the Dis
trlct an income tax upon persons who
are not residents.
Cites Report.
The unfairneSs of the proposed ex-
tension of taxation of incomes to non-
residents of the District of Columbia, -
Smith declared, lis we'll illustrated in
portion Of the Bureau Of Efficiency
report dealing with reciprocity with the
States. and the bureau suggests pro-
viso to be added to section 10 provid-
ing for reciprocity with States which
now impose and collect an income tax
on their residents.
1T so happens that the State Of Vir-
ginia does levy and collect State in
come tax, whereas the State of Mary
land has thus far found it possible to
secure sufficient revenue without the
imposition of such a tax. Even If the
proviso suggested by the bureau should
be inserted in the bill, Maryland resi-
dents would, therefore, not be affected.
Under the present situation, the in
come tax proposed to be levied on Mary
land residents under the pending bill
is in all respects an additional tax not
compensated for directly or indirectly
as in the case either of the residents Of
the District of Columbia or residents
of Virginia.
Declared Oppressive.
Under these circumstances, there
can be no question that the tax Is not
only oppressive to that extent, but Is
Objectionable because Of its discrimina-
tory features toward residents OF Mary
land"
Smith said If the committee adopted
the Bureau of Efficiency recommenda-
ton for reciprocity with other States
imposing an income tax. proviso
should be added to the bill stipulatlng
that no tax should be imposed on non
residents of the District who are resi-
dents of States in which no income tax
is levied
Warned by Donovan.
Mai. Daniel j. Donovan, District
auditor and budget officer. tCld the
Committee if Smiths recommendations
are adopted. residents of Maryland
would entirely escape the District tax,
whereas those in Virginia, which has a
State income tax, would be subject To
the District tax. Such situation. he
said, would be inequitable and unfair,
and to preclude it he urged on behalf
of the District Commissioners an
amendment to a reciprocity provision
proposed by the Bureau OF Ethclency.
which would require non-residents IN
States not having an income tax law to
pay a tax to the District on their In
tangible personal property.
McGrath pointed out that many
Arlington County residents employed or
engaged in business in the District
would not be affected by the proposed
income tax under the reciprocal amend
mert recommended by the Efficiency
Bureau. He also declared it would De
illegal for the District to tax the income
of Federal employees as local tax.
Mai. Donovan explained later that
the Commissioners had agreed to an
amendment eliminating nonresident
Federal employees from the provisions Of
the bill
Insurance Amendment.
Representatives of a group of life in
surance, fire insurance, casualty and
surety companies proposed an amend
ment to exempt such corporations from
the income tax on the ground that they
already are paying to the District either
a gross income tax or tax on premium
receipts Chairman Capper explained
that the entire section Cf the bill deal
ing with taxes on corporations would
be considered later in separate bill
which also would cover public utility
corporations.
Those who urged the amendment in
cluded Hobart S. Weaver, Association
of Life Insurance Presidents; F. S.
Dickson, National Board of Fire Under
writers; H. j. Drake, Association OF
Casualty and Surety Executives, and
Howard Casey, general counsel for the
Acacia Mutual Life Insurance Co.
Julian Brylawski of the Stanley
Crandall Co. of Washington, Warner
Brothers subsidiary, urged the commit
tee to write into the bill a provision
providing a consolidated return for cor
porations.
A local sales tax in lieu of the pro-
posed income tax and the existing tax
on intangible personal property was rec
commended by Rear Admiral w. L. Rod
gers of the Dupont Circle Citizens AS
sociation. Such tax, he said, would be
evenly distributed according to spending
power and thus remove the inequities IN
an income tax.
Other witnesses included Frank P.
Lord, who advocated a single real
estate property tax and E. B. Hem
,r,ho ho hill