Evening star., 1937-04-16

1uCer OF the revenue, ana Jne ell
iciency of collection has been marked,
the following yields in the
past:
1923 ----------------H, TIA, ,443
e26 2,O57,3
Ie28 2,378, ,569
1890 2,619,67l
a32 1888, 500
q35 2,052 300
Anticipated revenue from the in
.angibles tax next year is estimated at
about $2,5O0,OOO. And the prospects
are that the tax will increase with
recovery and with the aid OF the
green slip" provision of the Federal
income tax law, which is bringing to
light a substantial amount OF taxables
which hitherto were beyond the reach
Of the local assessor.
Unusual Conditions Here.
As for the District income tax itself
and aside from the question OF its
rates and effect on local taxpayers,
which will be discussed in later ar
ticle-the enactment of such a statute
for the District is complicated by the
unusual conditions existing here, not
duplicated in any other taxing juris-
diction of the country.
The city's population includes thou
sands of non-residents whose incomes
would be taxable under the pending
bill, some of their incomes taxable as
many as three separate times. But
the additional compicating factor is
that the majority of these non-resi-
dents, as well as large proportion OF
the city's residents, are Federal en-
ployes. Under a long line Of court
decisions, these Federal employees are
exempt from local income taxes i'm
posed by the States. The proposal for
4 District income tax raises the Ques-
lion whether such tax would be re-
yarded in the same light as State
,ax-one of the many questions which
night have to be settled in the courts.
This same question of State and
Federal power arises in connection with
he interest on Federal bonds, which
are subject to Federal surtaxes, but
cannot be taxed by States.
The way the new District OF Co.
umbia income tax is drawn, income
from Federal securities held by per-
sons residing in the District would be
subject to the District income tax. On
;he other hand income from Federal
securities held by a person not a resi-
dent of the District would not be sub
iected to a State income tax where
hey reside
This would unduly burden residents
If the District, who hold Federal
1t might have a tendency
% curtail their investment in such
securities. 1t will be remembered that
m a Riggs National Bank case, the
court held that Federal securities held
by Riggs Bank were not subject to
existing property taxes. But the new
income tax bill does not exempt Fed
sral securities from the proposed new
lax.
Exemption of Congressmen.
The curious conditions 1nterposed
~ the bills provisions receive colorful
in the manner by which
he members OF Congress would ex-
empt their own salaries from a local
ncome tax, while leaving the much
smaller salaries of their secretaries
and ONCE assistants subject to the tax.
AS far as residence is concerned, to
Use simple illustration, there is no
Inference between the Member OF Con-
,ress and his secretary. In most cases
he Congressman brings his secretary
20 Washington with him; friend, as
sociate or even relative whose knowl-
edge of conditions back home" adds
value to his secretarial services at the
Capitol. But the bill would exempt
the Congressman, while leaving the
Secretary's salary taxable by the Dis
trict.
A Faulty Premise.
A colloquy which occurred in the
House In December of 1881, when the
Mapes bills were before the House
sheds light on what the members o1
Congress may have had in mind wher
they neatly exempted themselves from
provisions of the District income tai
bill.
Representative Stafford Of Michigan
explained that he had not had time tt
study all of the bills provisions anc
wanted to know whether Congress.
men would have to pay the tax.
Mr.. Mapes, author of that bill, re.
piled: IF any of them live in thu
District of Columbia; but Of course
none of them do"
Mr.. Stafford asked: DO we no
all live in the District of Columbi,
during the sessions Of Congress?"
Mr.. Blanton entered the debate
with the suggestion: IF the gentle.
man will permit, certainly it will no
apply to a member Of Congress, be.
cause he lives in his home distric
and IS taxed in his own State"
AS q matter of fact, as far as tn,
State income tax is concerned, tn,
member Of Congress is not taxed il
his own State. He is exempt becaus,
he is Federal employe. And If tn,
members of Congress exempt them
selves from the District tax becaus
they are taxed on their incomes a
home. the exemption is based on
false premise.
On the other hand, the bill show
no hesitancy in proposing to tax othe
Government employees whose oftlcia
residence is III the States, or non
Government workers who actual,
live in Maryland and Virginia an.
work in the District of Columbia ant
who now pay no taxes in the Distric
but do pay taxes in the States.
Those exempted from the tax, unde,
the bill, are described as follows:
Persons In the service of tn
United States Government appointed
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