Evening star., 1947-02-04
Our Taxpayer Shortage
Too Few People Who Live in Washington Pay
Any Local Income Tax
No. 2
By John ". Thomson, Jr.

conference. So the 1887 revenue bill
became law without an income tax.
Again the following year the Com
missioners tried, with proposals that
carried exemptions ranging from $4,000
to $4,000 being considered. A combina-
ton 2 per cent sales tax and income tax
beginning with $4,000 was soundly
blasted by the House and another reve-
nue. bill became effective continuing the
real estate tax boost but without an
income tax.
In July, 1888, Dr.. Chester Pond, a New
York tax expert, began detailed study
of the tax needs OF the city under spe-
cial appropriation of $4,000.
DR.. Pond built his recommendations
chiefly around combination per cent
sales tax and income tax beginning
with exemptions Of 900. His thought
was that there was some doubt whether
the city could legally tax government
salaries. Therefore he set an exemption
figure that would exclude all but the
very top Federal salaries. There persons
as well as transients would be reached
by the sales tax, he felt, while the
ability to pay factor would be recognized
in the levy on higher incomes.
Where the Opposition Comes From.
The plan failed however, as did the
earlier combination and since then
Congress has made legal the taxing by
the states of Federal salaries.
Finally, after House-Senate con-
ference, the 1889 revenue bill came out
with the present income levy in it.
Part of the bitter debate on the issue
reyolyed about double and triple taxation
of incomes of persons living in one
Jurisdiction and working in another.
Opposition also came from House ana
Senate members whose States had no
income tax Even If credits were given
here for taxes paid in other States, these
opponents said, this would discriminate
against States able to get along without
such levy
The new tax bill drafted by the West
Committee does provide credit for In
come taxes paid in other States. For
example, a person living in Maryland
who paid a 500 State income tax would
pay no District tax at all unless 1T ex-
ceeded 500. Then he would pay only
the difference If his District tax on
income earned here figured $50, he
would pay nothing. II it figured $110,'
he would pay So This credit, however,
would depend on the nearby States
doing the same for District residents
earning income in Maryland or Virginia.
The first returns from the income
tax of 1899 had not even been collected
before District officials realized 1t would
not work. A Court Of Appeals decision
on the old Intangible tax, repealed when
the income levy became effective, put
the burden Of proof on the District for
proving domicile The Intangible tax
was based on domicile and officials
knew the finding would prevail on
the income levy. It opened big hole
for hundreds of Federal employees to
escape the tax as they are now doing.
But all efforts to alter the domicile
provision have failed to date.
Cutting OFF Local Ties.
When the Supreme Court later held,
in reversing the Court of Appeals deci-
sion against the District in an income
tax case, that q mans club and church
afiliations were among the things de-
termining a mans domicile, justice
of the Appeals Court resigned from
church vestry here to clarity his resi-
dence-despite the fact that his tenure
here Is for life.
There is no question but that the
hurdle in broadening the tax is the
willingness of Congress to tax its con-
stituents. The West con- mmittee recon-
mendations do not propose taxing men,
bers of Congress. They draw a dis
tinction between persons sent here as
representatives of other American COM
munities and persons who simply come
here to earn livelihood on the Fed
eral naVrnll