Evening star., 1937-04-16

AuAty VI y 1oCdA 1uCO1IlC toA Ill Ialc OlS-
trict which taxes the salaries of Gov
ernment employees. Much Of the dis
cussion at this stage OF the game is
probably academic, for 1t would seem
on the face of it that Congress has
the undisputed power to tax the in
comes Of its own employees in the Dis
trict. But the discussion IL interest
ing and may lead to further studies
before the local income tax Is adopted.
One suggestion is that Congress, in
enacting a local income tax for the
District, is acting as local and not a
national legislature-a role which was
described in Supreme Court decision
Gibbons v. the District OF Columbia)
as follows:
THE power of Congress, legislating
as a local legislature for the District.
to levy taxes for District purpose
only, In like manner that the Legis-
lature of State may tax the people
OF a State for State purposes, was ex-
pressly admitted, and has never since
been doubted. In the exercise OF this
power, Congress, like any State Legis-
lature, unrestricted by constitutional
limitations, may at its discretion
wholly exempt certain classes of per-
sons from taxation, or may tax them
at lower rate than other property"
This is the recognition OF Congress
as local legislature for the District
Of Columbia. If a local legislature,
acting in q State cannot tax Fed
eral employees, can Congress. acting as
local legislature for the District, do
that which is forbidden to other local
legislatures
The question may arise most sig
nificantly In the case of Federal en-
ployes who live in Virginia and Mary
land. They work, say, at the Capitol,
or in other Federal buildings which are
peculiarly subject to the jurisdiction Of
the Federal authorities-as distinct
from municipal authorities. The
Capitol for instance, is even policed
by a separate police force. entirely
under jurisdiction of Capitol authori-
ties. These employees leave their
places OF work and go to their homes
in Virginia or Maryland, where, as
Federal employees, they are exempt
from State income taxes. Can they
be made subject to local income tax
for the District of Columbia?
Another point made in this connec-
ton is that the District itself was
carved out OF the States of Virginia
and Maryland, whose residents, as
Federal employees. are exempt from
local income taxation. Can they now
be deprived Of such exemption? Those
who raise this point refer to the de-
cision in Downes v. Bidwell, in which
the court said:
This District (of Columbia) had
been part Of the States of Maryland
and Virginia. 1t had been subject to
the Constitution and was part of the
United States. The Constitution had
attached to it irrevocably. There are
steps which can never be taken back
ward. The tie that bound the States
of Maryland and Virginia to the Con-
stitution could not be dissolved with
out at least the consent Of the Federal
and State governments to a formal
separation. The mere cession Of the
District of Columbia to the Federal
Government relinquished the author
ity Of the States, but it did not take
it out of the United States or from
under the aegis Of the Constitution
Neither party had ever consented to
that construction Of the cession.
If, before the District was set of,
Congress had passed an unconstitu-
tional act. affecting its inhabitants,
1t would have been void. II done after
the District was created, it would have
been equally void In other words.
Congress could not do indirectly by
carving out the District what it
could not do directly. The District
still remained a part of the United
States, protected by the Constitution
Indeed, 1t would have been a fanciful
construction to hold that territory
which had been once q part of the
United States ceased to be such by be-
ing ceded directly to the Federal Gov-
ernment"
The Importance of whether the local
income tax would apply to Federal
employees is simply this: If 1t does not,
or II 1t cannot be made to apply with
out great confusion in administration,
the income tax is doubtfully expe-
dent substitute for the present tax on
intangibles.
1t is not believed that with exemp-
tlons OF Federal employees the local
income tax would produce the reve-
nue. to justify its imposition II some
Federal employees are exempted and
others are left taxable, great confu-
sion and inequities will arise which
are Immediately apparent.