Evening star., 1938-01-20
U,S,PAYMEN CUT
IS THREATENED IN
INCOME 7AXF|CHT
Foes of Plan to Impose
Levy on Congressman
Suggest ReprisaI.
SUBCOMMITTEE ADOPTS
.THREE-FOLD PROGRAM
Business Privilege and Realty In
crease 1nclided-showdown
May Come Tuesday.
BY DON S. WARREN.

BY DON S. WARREN.
Possibilities of applying the proposed
District income tax to members of
Congress, or to Federal employees living
IN Virginia or Maryland, were dis
counted today by some members of
the House At the same time, how
ever, there were suggestions that the
Federal payment to the District might
be slashed in half if advocates of an
all-inclusive income levy insist on their
plan.
Prospects are there will be a de-
termined fight in the House Dis
trtct Committee, or later or the floor
OF the House, over proposals for a
three-fold plan adopted yesterday by
the Fiscal Affairs Subcommittee of
the House District Committee.
This group, over the protest of its
chairman, Representative Nichols,
Democrat, of Oklahoma, decided to
draft a 1889 District revenue act, in
cluding adoption of an income tax on
all salaries earned in the District, plus
continuation of the business privilege
levy and the 25-cent hike in the real
estate tax rate.
Plan Prompts Challenge.
Among immediate reactions to this
plan were the following:
l. Representative Howard Smith of
Virginia, member of the powerful
House Rules Committee, declared he
would fight adoption of a District in
come tax that would affect Virginia
residents who earn their salaries in
the District; and
2. An unnamed member of the Dis
trict Subcommittee of the House Ap-
preparations Committee said four
members OF the House had suggested
Immediately that the $5,00O,000 Fed
eral payment be slashed to S2.5O0, 900
If there were indications that Con-
gress would permit an income levy
which would apply to the salaries Of
members of Congress. He said this
reprisal was offered on the grounds
Of suggestions that wealthy residents
of the District had suggested applica-
ton of the tax to members of Con-
gress.
won't Be Done"
MIR. Smith stated for publication:
THE suggestion that the proposed
District income tax be applied to men,
bers of Congress is the bunk. It can't
be done and won't be done.
However, if the income tax advo-
Gates proceed with their announced
plan, shall voice objections to appli-
cation of the tax to residents of Vir-
ginia who happen to earn their sal
aries in the District There is no
equity In the plan. I should think
that members of the House District
Committee would have learned this
lesson from what happened last ses-
sion. when such suggestion was re-
jected."
Representative Palmisano, Demo-
erat, of Maryland, chairman Of the
House District Committee, is UNDER
stood to be in favor of District in
come tax, but opposed to its applica-
tion to Maryland residents whose SAL
aries are earned in the District. Mr..
Palmisano is opposed to continuation
Of the business privilege tax.
Showdown Expected Tuesday.
The question may come to an issue
next Tuesday morning when the Fis-
cal Affairs Subcommittee is scheduled
to meet to consider details of the
general policy adopted yesterday. Mr..
Nichols, as chairman of the subcom-
mittee, announced he would fight be-
fore the House District Committee
against adoption Of all three tax plans.
He has favored continuation of the
business privilege levy and the realty
estate tax rate at SITS, but not with
the addition of an income levy. He
was outvoted to l by his own COM
mittee. He has let it be known that
If there Is to be an income tax it
should be one applying to all salaries
earned in the District, without ex-
emption for members of Congress or
Federal workers.
There was support for the income
tax plan among committee members,
although the immediate reaction was
extremely varied
Representative Hull, progressive, of
Wisconsin, questioned whether the in
come tax, as proposed, would be con-
{, VI,
"where would you draw the line?'
Representative Virginia E. Jenckes,
Democrat, of Indiana declared a Dis
trict income tax on members of Con-
gress would be unfair, in that it would
constitute double taxation" but 9TH
erwtse indicated she would follow the
suggestions of the Fiscal Affairs SUBJ
committee.
Representative Randolph, Democrat,
OF West Virginia, another member of
the House District Committee, said he
would be willing to pay District in
come tax, and did not see why men,
bers of Congress should object to pay
ing their share of Districl expenses,
but he championed the cause of a
District general sales tax.
Representative Bigelow,< Democrat,
Of Ohio, another committee member,
insisted the best solution of the Dis
trict's revenue problem would be adop-
ton Of per cent tax on land values,
and said he hoped to have a study
made soon showing the difference be-
tween such a tax and the proposed
District income levy. He said he be-
ueved the land tax would hit the
average home owner less than the plan
voiced by the subcommittee.
If there is any suspicion that the
proposed income tax will apply to
members of Congress-" he added, 1T
will be killed."
Representative Bates, fsepublican, Of
Massachusetts, said he had no objec-
ton to District income tax, but that
he believed that first the District real
estate rate should be carried to its
natural ceiling"