Evening star., 1932-05-24

trict may be roughly checked through
the Federal returns. Income from d1vl-
dends and interest reported in 1ndi-
vidual returns by taxpayers in the Dis
trict, exclusive Of exempt interest on
Liberty bonds and State obligations,
ETC., amounts to about $50,000,000 q
year. On an assumed average earning
Of per cent, the investment would be
billion dollars, yet the Intangible
property assessment Is little more than
half this amount"
Although emphasizing the difficulties
OF assessing intangibles as compared
with other classes OF property, the re-
port admits that conditions have been
improved in the District in the last few
years by the enactment in 1929 OF a
law, which the Bureau of Efficiency IT.
self recommended, providing that II
any person neglects or refuses to nle
| return of personal property apd the
assessor certifies that in his opinion
| the best information obtainable does not
afford a satisfactory basis for assess
ment, the Commissioners may petition
the Supreme Court of the District for
a mandamus to compel the person TO
file a sworn return.
Filings Are Forced.
Inc OSITlCL duUlLOI III NOAiAhSAeAAAo
on the finances for 1881 states that
Notwithstanding the market slump the
levy on intangibles increased In 1881
because the Commissioners were able
to institute mandamus proceedings TO
compel the filing Of returns, and that
during the past year 1t was unneces-
sary to take legal action after num-
ber OF persons were advised Of the pro-
vision Of law, the bureau points out.
A table accompanying the report
shows that during the last IA years the
annual tax collected by the District on
Intangible personally has increased
steadily from 1890, 1889 in 1918 to
$2,742 98637 in 1881. 1t has exceeded
So 900 900 year since 1925.
The bureau argues that from social
viewpoint all individuals should share
In the support of the Government in
proportion to their respective abilities,
and adds:
I'm the District the opportunity exists
for many persons with substantial in
comes from professions or from invest
ments in tax-eXempt local stocks or
Government bonds to escape virtually
all direct taxes. AS the bill, If enacted,
will effect a more equitable distribution
Of the tax burden between property
owners and non-property owners haV-
ing ability to pay taxes. it Is the opin-
ion of this bureau that a decided i'm
provement will be made In the District
taxing system by the substitution OF an
income tax for the present tax on In
tangible property.
Property Taxes Cited.
THE bureau is further influenced in
its view by the general situation on
property taxes. Heretofore the money
raised in the District OF Columbia to
meet expenses has been obtained al
most entirely from taxes on real and
personal property. Last year the cash
revenues Of the District were $30,4l6,-
539, exclusive Of the gasoline tax, or
s32.157,46l If the gasoline tax Is in
cluded. OF this amount general prop
erty taxes produced s27,286,3l9. These
significant figures show an abnormal
situation, In which real and personal
property are being a disproportlonate
part Of the cost Of the municipal gov
ernment. Scarcely tax authority can
be found to uphold the property tax as
the chief source of direct contribution
and vet In the District it constitutes IS
per cent of the total revenues
Sources Analysed.
In analyzing the sources Of taxable
income in the District the bureau begins
by pointing out that under the Federal
! revenue act it falls roughly into two
classes-individual including trusts and
estates: corporation. including JOINT
stock companies and other ASSOCIATIONS
organized for profit.
The gross income reported by resi-
dents of the District for Federal tax
purposes increased from s229, 100000 IN
1925 to s277 600, 900 in 1929, the average
being s245, 100000. Nearly half of this
amount. the bureau says, was reallzed
from salaries and wages, in large part
paid by the Federal Government. The
next item Of income, about 20 per cent.
represented dividends and interest.
Earnings from individual and partner
/ ship businesses accounted for IS per
| cent. and profits from sales Of capital
assets. rents, ROYALTIES and all other in
come made up the remaining IS per
cent. From the gross income there
were deducted losses, interest. taxes,
contributions and other allowances to-
falling 100000. leaving an average
net income reported for the period OF
| $4,000, 900.
Because of the non-commercial char
acter Of Washington, the bureau OBJ
serves. corporations are less important
here than in other cities Of the same
size in the United States.
! The total taxable income of all cor
! porations in the District during the
period 1925 to 1929 averaged $50, 900 900
year Of this approximately so per
/ cent was received by railroads and
public utilities. Is per cent by banks
and financial institutions, II per cent
by trading businesses, 7 per cent by
manufacturers. and the remaining
per cent by all others. OF particular
significance is the fact that large
part Of the net income Of the local
corporations would not be subject to
the District income tax. as such in
comes are received by public utlnties
and financial institutions exempted un-
der section %, which reads as follows:
Exempted by Statutes.
"'All corporations within the District
of Columbia which pay tax upon their
gross earnings or receipts shall be ex-
empt from the provisions OF this act.
The report then points out that while
the corporations now paying taxes on
the basis of gross receipts are but
small percentage of the number OF
businesses in the District, their COM
bined total income amounts to more
than one-third of the 100000 local
corporate income reported for Federal
taxation during the period 1925-29.
MORE lIld1 dIlOtllcl tllli0, Solh ~
| railroads. would be taxable only as to
a very small part of the income, repre-
senting the portion derived from busi-
ness transacted in the District, the re-
port adds.
Excluding these two groups, actually
less than SIS 900 900 is left to tax. Be-
fore exempting any particular business
from the operation of the proposed law
manifestly the first step is to determine
whether they now pay fair share OF
| the cost of government. The consid-
Grafton becomes the more important as
three other revenue measures for the
District are before Congress, namely,
the estate tax, the doubling of the gas
tax. and the automobile registration
! fee based on weight"
The bureau then points out that, as