Evening star., 1946-07-14
Tronsients Would Pay
Under Latest Tax Plan
But Sales and Income Proposals
May Not Win Approval

But Sales and Income Proposals
May Not Win Approval
By John W. Thompson, Jr.
A minor but certainly the most
curious part Of the new $17,75o,000 tax
program recommended to the Commits
sioners by the West Special Tax Com
mittee last week is the so-called use"
tax.
The committee report indicates that
this levy should accompany the proposed
2 per cent sales tax. It would be
2 per cent tax imposed upon "the use,
storage or consumption within the Dis
trict" of articles bought outside, which
if bought inside the boundary, would be
subject to the sales tax.
Credit would be given for any sales
tax paid on the article in the jurisdic-
ton in which it is bought. The tax
would not apply to property acquired in
any one month which does not exceed
$25 in aggregate value. 1t would not be
imposed on property brought into the
District by a nonresident for his own
use.
Obviously the language is aimed at
purchases made in the nearby Maryland
and Virginia communities, although it
is not limited to those States. The
assumption appears to have been that
with no sales tax in those nearby
Jurisdictions and with many of the big
District department stores operating
branches over the line, the sales tax
on big articles could be avoided by a
l0-minute drive to the suburbs. Possibly
it was an attempt to allay the fears of
District merchants that sales levy
here without one nearby would drive
buyers across the line where the price
was better.
But the plain fact is that such a
proposal is clearly unenforceable and the
committee is well aware of It, 1t is
suggested that outside purchases of
items such as automobiles could be
caught when the resident applied for a
District license tag. But the $25 monthly
exemption Is, of course, absurd. The
very suggestion Of this sort OF hokum
to the Commissioners tends to weaken
the report.
Corporation Counsel Vernon E. West
told the city heads that his committee
OF District ofhcials and civic represent
atives studied almost every conceivable
method of taxation before drawing up
its seven-point program. All of its pro-
posals, however, fall into two categories
sales tax or income tax.
In addition to the per cent sales
and "use" taxes on retail purchases, the
report calls for per cent levy on
public utilities bills. one-cent tax on
each package of 20 cigarettes, a 10 per
cent tax on ticket price to amusements,
and doubling of the liquor taxes All
Of these are essentially sales taxes and
are estimated to produce more than
80 per cent of the total income expected.
The income tax proposals are to
broaden the base Of the present personal
income tax law to catch residents who
now beat the domicile clause by pleading
legal residence elsewhere, to tax income
earned here by nonresidents and a per
cent tax on unincorporated businesses.
Two things are Immediately apparent
in the committee program:
l. Except IN the case Of liquor dealers,
the taxes are designed to catch a lot
Of people who have not been paying
rather than to add excessively to the
burden Of Those who already have been
| paying. The various sales taxes will
catch the large numbers of transients
which Washington attracts as world
capitalize people who come and stay
for while, receiving city protection and
services and leaving nothing when they
go. Also the committee, again with the
exception of the liquor taxes, recon-
mended no increases in the rates of
existing taxes.
2. heavy percentage OF the income
expected to result from the proposed
program is tied up In two levies-the
retail sales tax and the broadened
income tax base-which even If ap-
proved by the Commissioners, have,
according to the previous record. doubt
ful chances Of congressional approval.
The sales tax is estimated to produce
100000 and the income tax expansion
$2,25o,ooo of the total of $17,75o,0o0.
The first indicates a commendable
point of departure by the committee.
The second lays bare the program
| weakness.
The committee itself was clearly
aware Of the probable congressional
opposition to the broadening of the
income tax, regardless of the equities
of doing so. 1t tossed out to the Com
mlssloners the broad hint that such
an expansion could still exempt cabinet
members and members of Congress,
Attention is invited to the fact"
the committee report said, that, under
the intangible tax law now repealed,
there were exempted from the tax i'm
posed thereby cabinet officers not doni-
clled within the District and persons
IN the service of the United States
Government elected for definite term
of service"
The theory here appears to be that
such personnel are distinct from other
federal jobholders in that they were
called for by the President or sent by
their constituents and did not come
here on their own volition The gen.
eral run of Federal emploves il is