The Tacoma times. [volume] (Tacoma, Wash.) 1903-1949, 1939-03-29
Publ:
Employees
Worried
Over Tax
High Court Ruling
To Affect Those
Working for City,
County and State

THERE were financially
= 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 we're
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 ap-
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 Attor-
nev-General G. w. Hamilton got
out a statement Tuesday that all
state employees would be exempt
from the income tax. but this was
withdrawn later for further study.
The state tax commission
was busy with problems OF its
new sales tax bill, which goes
into effect MAY I, hut thu in
diyidual commissioners were
certain their salaries for 1881,
and possibly rs far back AS
1896, would he taxed.
Under the supreme court decl-
sion. states also can tax federal
employees which there are sew
eral thousand m washington but,
unfortunately. in the tax coliec-
tors eyes. this state has no income
tax because such a tax is uncon-
stitutional.
Under the supreme court
y decision, it appeared all
married state officials, from
Gov. Clarence d. Martin down,
would have to pay an income
tax on their taxable wealth
above So, 800. Single employees
have only 81 900 exemption.
Because the state has 500 a
month minimum salary figure for
all employees. most of its single
officials and workers probably VIII
have TO pay the tax. Married en-
ploves in the lower salary brack-
cts will escape the levy because
they do not get $4,000 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 IA. 1889. was cited
by the attorney-general's office to
show the period of limitation wouic
make them liable to back taxes FOL
1886. 1887 and 1888 salaries.
State Treasurer Phil II. Gallag-
her said he was informed a bill
before congress would make ths
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 $50, 000, 900 Il
pay their salaries.
Budget Director z. d. Bra
brooks office estimated Their
were ZOO officials and employees
but exemptions probably would GU
the number actually liable for IN
tax down about IS per cent.
Although 10000 employees draw
ing ten millions year gave al
average Of only 81 900 a year sal
ary. il was recalled that numerou
employees are paid jointly from
federal and state or state and coun
ty funds. especially IN the vast 80
cial security program. Hundred
of others are only part-time EN-
ployes. The fact they are PAL
from joint governmental program
may complicate the figuring Q