Evening star., 1937-07-24

La Toilette to allow his income tax
proposal to 60 into the bill as an
additional feature without eliminating
the sales tax, in order to give the
conferees more leeway in working
out an equitable compromise tax pro-
gram
McCarran emphasized that the gross
receipts business privilege tax, for
which the sales tax was substituted
by the Senate committee, was an un-
just and burdensome tax. as 1t came
from the House, and that it might
be necessary to 60 back to that levy
If the sales tax were eliminated.
District officials interpret the Sen
ate income tax feature as applying to
salaries or other income earned in
the District by residents of Maryland
or Virginia, subject to deduction of
taxes that may be paid on such in
come in their home States. They be-
lieve this same provision relating to
non-residents would impose the Dis
trlct income tax on the salaries OF
AiiShicSio Va Soli6A anu otllCl oON.
eminent officials. Federal salaries are
not taxable under State income tax
laws because Of a constitutional bar
rier
Senator La Toilette was unwilling
to add the income tax without elimi-
mating the sales tax and McCarran
and King finally agreed to his motion
to make the income levy a substitute
for the sales tax section. There was
no record vote
Tydings Answers Rorah.
Senator Tydings told Borah in the
debate that the District Committee
had been favorable to an income tax,
but turned from that to the sales
tax because OF the peculiar condi-
ton in the District, Of people working
here in the District and living outside
OF the District it was not possible to
perfect that provision, and it was only
when the income tax provision could
not be perfected that the sales tax
was turned to-
Referring to the fact that members
Of the House District Committee had
been called into consultation by the
Senate Committee, Senator King
added: They made it very clear that
it was absolutely impossible to obtain
an income tax bill in the House and
have it pass the House"
King then declared he voted against
the sales tax in committee. He en-
phaslzed, however, that the District is
nearly out of funds and that the
pending bill Is an emergency measure
and that the sales tax was included as
temporary program for one year
pending further study of local taxa
ton.
Continuing his opposition to the
sales tax, however, Borah replied
Let me say to the Senate that there
is another emergency IN ahis coun-
try. and that Is that you are taxing
the man down at the bottom until you
are destroying the purchasing power
OF the great masses of the American r
people. That is the emergency which
we are producing by our system OF
taxation"
When Tydings again referred te
the dlft1culty encountered by the
committee In fixing the locus" OF
an income tax because OF employe,
here who live in adjacent States
Borah added
I understand also that anothe,
thing entered into the considera ton
and that was that some of the sal
aired officials were afraid they nigh,
have their salaries taxed"
In answering the contention thai
the House would not agree to an in.
come tax, Borah inquired, Have W.
surrendered, or are We a legislative
body?"
Senator McCarran, in charge Of
the bill, replied:
NO, We have not surrendered, buI
We are confronted with a situatio,
where there must be meeting OIL
the minds so that we can get through
a tax bill which will carry the neces.
| sary expenditures of this District"
| McCarran added that he, too. is on.
/ posed to the sales tax.