Evening star., 1938-02-13

VI
here. He's an average citizen and
calities Of the income tax plan. All
he knows is that the new 1889 Dis
trict revenue bill proposes TO tax his
income at the rate OF per cent, as
1t does the income Of all other Ion
residents who work in Washington
First Of all, John asks: why should
I pay an income tax to the District?
The Federal Government has been
taxing my salary for years. Mary
land Is taxing it now. And If the
District takes some, there won't lie
much left"
But this problem Of triple taxation
on income is not the only one that
should worry John. There are many
others that will have to be solved
first.
A Little Worry for Boss.
For instance. John would have to
file his Federal return and make a
payment on the initial installment
by March IS. The Maryland income
tax returns are due or the same
date, and so would the district re-
turns if Congress enacts the revenue
bill the Fiscal Affairs Subcommittee
of the House District Committee has
under consideration.
Where would he file first? How
would he make deductions from the
taxes paid in each jurisdiction? Ter
tax lawyers were asked those ques.
tions and their opinions are as varied
as the weather.
But wait. There's another com.
plication.
The proposed income tax for the
District would place a levy on last
years salary. That wouldn't be 50
bad. since the Federal tax will be
based on the income for that year
But the District revenue bill places
the responsibility on the employer
to deduct l per cent of his salary to
protect the District against any eva
sion of the tax.
Employers did not know about that
feature until a week ago. How can
they deduct l per cent of the 1887
salary which, of course, already ha,
been paid to the employe?
How to Do It!
John doesn't have to worry much
about that, but the tax bill places q
responsibility on him, too. It require.
him to make return on his income
and he can't escape that, even II
the District tax assessor has to catch
him to make him pay the tax.
There are, however, more seriou.
questions to puzzle John. He ha.
to figure his tax to the Government
at a 4 per cent rate. The Maryland
rate is one-half of / per cent. Anc
the proposed District rate Is l pc,
cent.
"A lot of arithmetic" says John.
But he forgot to figure this in the
equation: The District revenue bill
says he will be credited with the
amount he pays to another State a.
nonresident. Should he deduct from
his District return, If ne makes that
first, the amount he pays to Mary
land? Or should he pay the / per
cent tax to the District and then file
for refund. There's nothing in the
revenue bill telling him what to do.
Let's assume that John feels he
owes his allegiance first to his own
State, and files his return in Maryland
before he even considers the Federal
or District income tax And assume
too, that $4,000 Of Johns income Is
subject to taxation.
How to Save $2o-Maybe.
At the rate of one-half of per cent
John would pay Maryland $40. Then
he might file his return to the District,
and pay $4O In that case the District
would owe him $40.
On the other hand, If John should
pay the District first, and then 60 to
Maryland with q receipt for $40
against the Maryland tax Of $40. Then
what?
Maybe 1t would wipe out the Mary
land tax-and then maybe it wouldn't,
Experts differ widely on the question.
Some Maryland ofncials said they ex-
pected to follow the principle Of
reciprocity. but intended 70 collect
tazes from their own "rssiden1" even