Evening star., 1937-06-28

are not legal residents of the District :"
With all but legal residents ex-
empted Cottrell said the tax leaves
out "one-third or more" of the taxable
incomes, and produces too little from
the remainder"
Kennedy stoutly defended his House
Tax Subcommittee for the work it
had done in framing the bill, admitted
the measure was not perfect. could
be improved by some amendments,
but felt 1t was the best that could
have been done with the time avail
able. Further study should be given,
ne said, so that next year, a better
system could be worked out
Oblecting to action of the House
in raising rates on the inheritance tax,
Kennedy suggested the House amend
ment should be stricken out and the
rates returned to the lower scale in
troduced by the committee.
While explaining the provisions for
Tightening up on collection OF the
tangible tax, Kennedy was asked by
Senator Copeland:
What's going to happen when it
is discovered that taxpayers here have
been evading the law?"
The provision so far was designed
only as tax collection measure, Ken
nedy said, not to catch back taxes or
institute criminal proceedings.
Defends Business Levy.
Defending the business privilege
tax. which had just been attacked by
the Board of Trade. Kennedy charged
there were number Of firms in
Washington doing up to million dol
lars worth Of business, who pay taxes
to the District only on some office
furniture. The business privilege
tax" he said. was neither "a sales tax
nor a gross income tax" but tax on
gross receipts.
Kennedy opposed the chain store
tax inserted on the floor of the
House by Representative Dies OF Texas.
A chain store bill had been pending
in the House District Committee, he
said, but it had not been included in
the omnibus tax measure
"Unquestionably," he declared, at
would work hardship on small mer-
chants" To illustrate this he said it
would apply. for instance, to laundry
which had number Of collection
points with nothing more than a
store 'front.' and place from which
to collect the laundry. If it had 20
such places. the bill would exact a tax
from each, he said.
Charge Of Nichols.
In defeating the proposed income
tax provision in the House. certain
members Of Congress definitely must
have had in mind the fact that they
would have to pay the tax themselves,
it was charged by Representative
Nichols.
The income tax was characterized
by him as 1.-The most controversial"
factor in the measure.
Il doubt if any one can make a
very satisfactory explanation, he
said, "of what was in the minds of
members voting against that income
tax provision
~ SSiNdIily WAS Ill SOIIlc vi JneU
minds that they would have to pay
the tax themselves.
But to my way of thinking, it
would be impossible to tax them
here, except as nonresident. If
they are subject to a tax here it
would be impossible for them to be q
resident of the State they represent
back home. The only way to reach
those salaries would be tax them as
non-residents on that portion of their
income earned in the District Of Co.
lumbia. A bill might make that
portion taxable"
Reasons for Vote.
Members of Congress may also have
had in mind, he said, that their clerks
would have to pay the tax, in addi-
ton to their expenses of travel, and,
in many cases, maintaining a home
in two places, here and back home.
Nichols fatty declared that resi-
dents Of the District, who live here,
call this hcme. use it more than any
transient, should pay as much COM
parably as any citizen, in income tax,
contributing their share to the Gov
ernment"
Representative Nichols said the in