Evening star., 1941-03-02
District Income Tax
On Local Earnings Of
on-Residents Asked
House Fiscal Group
To Report Amendments
To Full Committee

The Fiscal Affairs Subcommittee
of the House District Committee to-
morrow will report to the full COM
mittee a number of amendments
to the local income tax law, includ-
ing one which would apply the tax
to that portion of the income earned
here by non-residents, Chairman
Hunter announced yesterday.
District officials meanwhile said
they were "bowing to the inevitable"
by accepting the revisionS.
There was no direct quotation in
this regard and, in fact, District
officials insisted the latest draft of
proposed amendments would be of
benefit to the District, although the
expected help would not amount to
as much as anticipated under the
program conceived year ago by
the Commissioners and attempted
again this year.
A year ago the city heads decided
bIiC 10" OllOb4u 0C dlilClioCu W GltC
point that person earning income
within the National Capital should
owe his first allegiance" to the Dis
trict for income taxes on income
received from within the District.
"Domicile" Provision Opposed.
BY this. it was meant that District
officials believed that people who
earn money in the District should
pay a District income tax whether
they have legal residence in the
States or not. If the State in which
the resident had legal residence had
an income tax, it was the District
plan to have the taxpayer pay the
District income tax and then pay
the State the difference between the
tax here and in his State. BY so
doing, District officials thought per-
sons with legal residence elsewhere
would only be contributing their
share toward the expenses of the
city whose advantages they enjoy.
Such a program was shelved in
the House about a year ago and a
substitute plan offered by Repre-
sentative Dirksen.i Republican, of
Illinois likewise was set aside after
the House had beaten down the So
called Pond tax plan, which was
a combination of 2 per cent sales
tax with an income tax on income
above $4,000.
The Commissioners recently re-
newed their plea for amendment of
the income tax law, to get away
from the old "domicile" provision
and to base the tax on a claim
against all those living here for
six months or more of a year, or on
those domiciled here on the last
day of the taxable year, which was
substantially the Dirksen plan.
First Levy for District.
In other words. the Commits
sioners' plan this year again was
based on the idea of giving the Dis
trict the first levy on income
earned within the District, but
again there was objection from
some Representatives and again
revision was ordered by the House
District Subcommittee in charge of
the bill.
AS result the bill has been re-
written to provide that residents"
of the District under this new def
milton also shall be given credit for
taxes paid to a State or territory on
income received from those jurisdic-
tions. Even with these modifica-
tions there still are some complaints
that the proposed amendments
would require persons receiving in
comes from within the District to
file a return with the District tax
assessor.
District officials indicate they be-
lieve the District should accept a
half loaf" if they cannot get a
whole one, and it is argued the Dis
trict still will be gamer under the
present wording of the proposed
amendment although perhaps not
as much so as if the Commissioners
original plan were adopted.