Evening star., 1932-06-05
, EARRINGS are now planned be-
fore the Senate District Com
,,,itfao fn.. T1laSdaN afternoon

| lore tQe 0eudIc 1|lStIl SOA1-
mittee for Tuesday afternoon
on the proposed income tax
bill for the District of Colum-
| bia. and in some respects the hearings
| will probably exceed in interest those
previously held on other taxing meas
| ures that made up what has come to
be known as the "Mapes program
of increased local taxation.
In the first place, members OF the
local community and representatives OF
the local municipal government who
appear in connection with the proposed
bill to record their views In favor OF 1t
or against it will be joined by host
| Of embattled-and ballot -wielding-citi-
| zens of the adjoining States of Mary
| land and Virginia.
| For under the terms Of the bill as
passed by the House, these citizens OF
| the adjacent States are to be taxed
under the BILL just as residents Of the
District would be taxed. And In large
| numbers and repeatedly at short in
tervals they have expressed their in
| dignation, and propose further to ex-
press it before the Senate committee.
Many Complications Threaten.
The Bureau of Efficiency has clari-
|
suggesting a definition of resident, but
made no change in the proposal that
all incomes earned within the District
be taxed. 1t did suggest amendments
or changes for the exemption of certain
| Government officials and members OF
Congress SHOULD Congress wish to ex-
empt them. but only tempered the
winds for the resident of Virginia In
private employment (who already pays
State income taxi by suggesting q
reciprocity clause, wherein this resident
would be given credit by the District
| for what he pays in State income taxes
But the reciprocity clause would not be
applicable in the case of Maryland, as
Maryland has no State income tax.
Several confusing possibilities are
presented. The Virginian who works
| for a private establishment in the Dis
| trict, or who owns his business here
might be given, by reciprocal arrange
ment, credit for what he pays Virginia
| on his income tax. But the Federal
employe who lives in Virginia and works
in the District would pay his income
tax to the District. as Virginia does not
demand an income tax from a Federal
employe.
The resident Of Maryland, however
whether or not he is Federal employe
would pay the District an income tax
and. in addition, pay his Intangible tax
to Maryland, although the income tax
is proposed as substitute for the local
tax on intangibles.
One Sided Reciprocity.
Again, there Is certain irony in pro-
posing reciprocity with the States
for the simple reason that while there
are tens of thousands of residents OF
Maryland and Virginia who earn their
incomes in the District-this being the
Federal Clty-the proportion of District
residents who earn their incomes in the
States Is infinitesimal. And the reci-
procity would not extend to Maryland
But since the Mapes income tax bill
was reported and passed by the House,
there has arisen another factor that is
expected to play an important part in
the Senate District Committees consid-
GRAFTON of the proposed local income
tax Since that time the Federal Gov
ernment-discarding the sales tax So
lution-has IN the revenue bill jumped
on incomes as its own meat" so tc
speak, and has extracted for itself
| about all the juice there IS in it.
Increased Income Taxes.
For instance: When the Mapes bill
was passed by the House. the Federal
Government was taxing a net income
| of $4,000 for a total of 500 The
rates under the Mapes bill would have
added $65 Qocal tax to this amount
But the new revenue bill taxes this
$4,000 of net income for S240. In other
words, the Mapes bill proposed an in
creased tax burden for $4,000 net in
| n nd
has already placed on that income an
increased load amounting to S150
Even though the rates on the lower
incomes have been modified by the Bu-
reau OF Efficiency, it remains a ques-
tion Of how much Of an additional load
the income taxpayers can or should
endure.
There is the additional factor of the
pay cut to be considered. If local in
come tax were enacted, the rates would
apply on an income that already must
pay high Federal tax and which has
been cut in the name of Federal econ
omy. The result would not only be an
added hardship to the Federal worker,
but would materially lessen the es-
timated yield of the income tax.
The Star has undertaken, in the mat
ter which follows, to present an impair
tax bill, with the Bureau of Efficiency's
important recommendations set down,
but without an exhaustive discussion of
the equitable considerations pro or con.
Bill Has Been AnaIyzed,
In considering the Mapes bill the Senate
committee will have before it report by
the United States Bureau of Efficiency
suggesting 81 changes in the bill
changes affecting both the form and the
substance of the proposed law. The
bill was proposed by the House as a
substitute for the present millage tax
on Intangible personal property (stocks
bonds and the like) and is so drawn
that, in the opinion of the Mapes
! Fiscal Relations Committee, which spon.
sored it as part of general scheme
| of taxation for the District, it will
! yield $750,000 more per annum thar
does the personal property tax on in
| tangibles.
The bill provides for graduated tax
on net incomes earned in the District
OF Columbia whether earned by resi-
dents or on-reSidents) and on net in.
comes earned by residents of the Dis.
| trict of Columbia, whether earned in O,
out of the District The bureau report
| is in favor of the imposition Of an in
come tax as suggested, but recommends
different rates, calculated to produce 9
smaller yield.
What the Bill Contains.
| The provisions of the bill are here
described in their logical order, and moi
in the order in which they appear ir
the bill. They fall naturally under foul
heads:
Cd Who shall be taxed?
t2) Upon what income shall each
person or taxable entity be taxed?
90 What tax shall be required oI