Evening star., 1940-04-23
New D. f. Tax
plan Is Dead
Says Nichols
House 'SomersouIt'
On Changes in Law
Brings Surprise

New tax legislation for the District
is dead" at this session of Congress,
1t was predicted today by Repre-
sentative Nichols, Democrat, Of
Oklahoma, sponsor of plan to SUBJ
stitute combination retail sales
income tax plan for the existing
law which reaches down into the
lower salary brackets.
Mr.. Nichols made his prediction
after the House late yesterday turned
a surprising somersault by killing
both the dual tax plan as we'll as a
program 1t hau previously approved
tentatively to extend the local in
come tax law to tap the salaries Of
residents Of Maryland and Virginia
or any other State who work here.
Changes in the local income tax
law, proposed by Representative
Dirksen, Republican, of Illinois,
champion of the existing income
tax, had been tentatively approved
by the House by vote of 1863 to 90
before the upset. In final action
on the tax program, however. the
House voted, 140 to 113, to kill the
Dirksen plan as we'll as the one pro-
viding for a combination sales
income tax.
Dirksen to Press Issue.
Mr. Dirksen. blaming the final
House action on confusion and
misunderstanding" said he would
again attempt to get consideration
of his program at the present session
of Congress through special legisla-
ton. He intends to introduce
separate bill, that will contain the
amendments the House tentatively
indorsed.
Aside from applying the income
tax to non-residents who work in
Washington, Mr.. Dirksen would in
clude under his proposed bill those
who have an "abode" here for six
months in year. The proposed leg
islation would specifically exempt
the President, members of his cab
met, members of Congress, judges OF
the Federal courts and the clerks
and secretaries of members of Con-
gress.
Three weeks ago the House fiat
ly refused even to consider the dual
tax program-a plan that called for
per cent tax on retail sales and
tax on earned incomes in excess
of $4,000 year. Another attempt
to force consideration of the plan
was made yesterday at the insist
ence of Representative Nichols.
Efforts to compel renewed con-
sideration of the plan was marked
by bitter and humorous debatae.
Several times members were re-
minded that If the District needed
additional revenue 1t could be pro-
vided by raise in the tax rate on
real and personal property.
Mr.. Dirksen explained a 10 per
cent increase in the real estate tax
levy which the Commissioners have
authority to impose, would produce
$1.110,0O0 in additional revenue
which, he said, would do the job"
of meeting an anticipated deficit in
District budget revenues for the
coming fiscal year. He argued his
amendments were designed primarily
to Clarity the present income tax
law in view of a recent decision
OF the United States Court of Ap.
peals for the District which indi-
Gated the levy could not legally be
applied to persons not 'domiciled"
in the District.
His plan, however, would not add
to the tax burden of a nonresident
whose income is earned in WASH
ington. Such a person. subject to
$40 income tax in Virginia and SIS in
the District, would pay the District
SIS and Virginia IS.
Debate on the House floor preced-
ing action on the combination retail
sales-income tax bill surprised some
Of the veteran members. Represent
ative Dies, Democrat, of Texas and
chairman of the special committee
investigating un-American activities,
several times attempted to cut of
the debate.
Housing Situation Hit.
Representative Hoffman, Repub-
lican of Michigan, in denouncing the
sales tax proposal, complained about
housing conditions in Washington
and said some people have to pay
$3.50 a. year for a room with no bed,
no furnace and mot even a rug to
sleep on"
Representative Schafer, Republic
an, of Wisconsin, former locomo-
tive engineer, also declared a sales
tax would apply from "the baby's
diaper down to the shroud."
He contended sales tax would es-
tablish Chinese wall" around the
District-far greater than the one in
prohibition days-and concluded by
saying:
Lets give this hybrid tax abortion
the kiss of DEATH"
Representative Cochran, Demo-
crat, of Missouri, who had listened
to the argument for an hour or more,
finally took the floor and described
the performance of the House as "a
travesty on legislative procedure"
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