The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1939-03-30
Public S
Employees
Worried
Over Tax
High Court Ruling
To Affect Those
Working for City,,
County and State

THERE were financially
L furrowed browS today in
city hall, county courthouse
and in the sprawling. growing
group of Capitol buildings at
Olympia,
Workers paid for public
service with public funds were
face to face with a looming
problem of personal taxes
"even as YOU and me.
For many of them it was
a new sensation.
United States supreme court
Monday ruled that public employees
were not exempt from the federal
income tax. as they had been held
in the past. Today these employees
were alternately curious and APP
prehensive about how far back IN
the wears Uncle Sam would try TO
levy the tax.
no one in Olympia had the
answers. An assistant to Attof-
nev-General @. w. Hamilton got
o,t a statement Tuesday that all
state employees would be exempt
from the income tax, but TINS was
Withdrawn later for further study.
The state tan commission
was busy with problems OF lis
new sales tax bill, which goes
into effect MAY !, but the in
diyidual commissioners were
certain their salaries for 1881,
and possibly as far back as
1896. would be taxed.
Under the supreme court decl-
sion. states also can tax federal
emploves-of which there are sew
eral thousand in Washington-but,
unfortunately. in the tax coilec-
tors eyes. this state has no income
tax because such a tax is uncon-
stitutional.
Under the supreme court ri
y decision, it appeared all
married state officials, from
Gov. Clarence ID. Martin down,
would have to pay an income
tax on their taxable wealth
above 50, 800. Single employees
have only 81 900 exemption.
Because the state has a 500
month minimum salary figure Tor
all employees. most of its single
officials and workers probably Will
have to pay the tax. Married en-
Moves in the lower salary brack-
cts will escape the levy because
they do not get 50 500 a year.
Another conundrum worry
ing state officials was how
many wears back the govern
ment would try to collect the
tax.
A federal treasury department
ruling of March ID. 1889, was cited
by the attorney-general's office to
show the period of limitation would
make them liable to back taxes for
1886. 1897 and 1888 salaries.
State Treasurer Phil II. Gallag-
her said he was informed bill
before congress would make the
income retroactive to salaries only
after January / of this year.
MO ONE could estimate how
~ much income tax Uncle
Sam will take from Washing
ton public officials and en-
ployes' pockets. The state
budget for the present bien-
mum contained $20,00O,000 10
paw their salaries.
Budget Director f. D. Bra
brooks office estimated there
were 10000 officials and employees
but exemptions probably would cut
the number actually liable for the
tax down about IS per cent.
Although 10000 employees draw
ing ten millions a year gave an
average of only $1,000 a year sal
airy. il was recalled that numerous
employees are paid jointly from
federal and state or state and coun'
" funds, especially IN The vast so
cial security program HUNDREDS
of others are only part-time en-
ployes. The fact they are palc
from Joint governmental programs
nav complicste the figuring Of