Evening star., 1938-04-10
ID. C.. Taxes
Continued From First Page.)

Federal Government, but are not resi-
dents of the District of Columbia.
To impose on them a District income
tax in addition to the Federal income
tax they now pay, is a rank injustice
and totally indefensible.
In addition, the bill contains a
provision that, while taxing our nom
resident constituents, it expressly ex-
empts members of Congress. We do
not believe that our colleagues wish
to place themselves in the indefensible
position of voting for a tax bill
that taxes others and exempts them
selves. How could we defend or
justify such a vote.
Other Sources of Revenue.
There are other sources by which
the needed revenue can easily be
raised. and We expect to present
amendments to the bill to correct these
features. We will endeavor to explain
our proposals during the general de-
bate on the BILL which is expected to
begin about l O'Clock Monday. We
hope you are sufficiently interested
in the subject to be on the floor and
participate in the debate.
There will probably be a roll call
vote either on a motion to recommit
or on final passage of the bill
Please join us in helping to defeat
this income tax on non-reSidents of
the District"
The fight over the income tax plan
is expected to be even more bitter
than the one last year when the House
revolted against similar proposal be-
cause it would have taxed the salaries
of members of Congress. AS a result
of that battle. the House returned
the entire revenue bill to the District
Committee with instructions to re-
move the income tax section.
Almost simultaneously with the dis
tribution of the Joint letter of Mr..
Smith and Mr., Lewis. the District
Committee filed its report on the bill
with the House
Report UphoIds Plan.
Considerable space is devoted in the
report to justify the income tax plan,
which, the report declares. is fair
and equitable in principle" 1t also
explained that care had been taken to
credit the payment of other taxes to
avoid the hardship arising from dou-
BILE tax.
In the case of the proposed Dis
trict tax on individual incomes" the
report said. the nominal rates vary
from l per cent on the first $4,000 of
net income to 10 per cent on net in
comes over $4,000. These rates. for
incomes in the lower brackets. place
considerably less burden on the tax
payer than any other tax that would
meet present District needs. And even
for that portion of the higher incomes
which is taxed at the top rate under
the bill, 10 per cent the actual tax.
can hardly be considered excessive.
This should be made clear at the
outset: A stated bracket rate does
not apply to the taxpayers total in
come, but only to part of it. Take,
for example, an unmarried man who
has an income of $4,000. The 10 per
cent rate applies to only that portion
which is in excess of s5O,0OO-or
$4,000. This man would pay tax
of S4,930. WHICH is not 10 per cent, but
an average effective rate of 7.O4 per
cent
In the second place, the burden
by the nactment of the pro-
posed District income tax is consid-
erably leSSened because the tax is al
lowed as a deduction in determining
the net income upon which the Fed
eral tax is computed.
THUS the man with an income of
$4,000 who pays $4,93O to the Dis
trict, would as result pay s2,097
less in taxes to the Federal Govern
ment that he would have paid if
there were no District tax. His net
additional burden. as distinguished
from his actual tax payment, there
fore, is only $2.833, not $4,93O."
The report places the anticipated
budget deficit in the coming fiscal
year at S4,315 ,083, and points out the
additional taxes proposed in the bill
are estimated to raise $5,2OO,OOO. The
prospective surplus, however, it en-
phasizes, may be absorbed by a fur
ther appropriation for relief funds.