Evening star., 1949-02-12
Politics in LocuI Toxotion

Last year the House approved COM
bination income tax and sales tax bill. 1t
would have been approved in the senate
but the threat of last-minute flllouster,
based on opposition to the sales tax, kept
it off the floor.
This wear the same bill has been intro
duced by Representative Howard Smith
of Virginia. Under it's terms the local IN
come tax would begin at an $4,000 salary.
At the request of the Commissioners,
Representative Bates of Massachusetts IS
sponsoring another measure. Under that
bill the local income tax would begin at
$4,000
The Bates bill would produce more
money than the Smith bill. But 1t would
tax more people And because OF the po-
litical atmosphere in which questions OF
local income taxation are CONSIDERED IN
Congress, the number and the kind OF
people who are subject to the tax become
major considerations.
AS an illustration: The existing local IN
come tax is highly discriminatory. 1t is
highly discriminatory because the House,
especially, has not been willing to require
Federal workers, maintaining donlc1e
(voting residence) in the States, to pay the
tax. Thus they have been exempted under
the law, although they may live here most
of their lives and derive the same Dement'S
from community services as bona f1de but
voteless District of Columbia residents:
The House was willing last year to pass
a fair local income tax, applying to every
body who lived here as much as seven
months a year. provided the income tax
began at $8,000 There are approximately
80 900 local income tax returns under exist
ing law. If the tax began at $4,000, how
ever, these 9s, 900 returns would be reduced
to about 5000. Some 80 900 taxpayers would
be relieved of the local income tax. The
number of Government employes-When
elected officials and those appointed by
the President are exempt, as in the bill
earning over $4,000 would be small: so
small as to avoid political considerations
When the income tax begins at $4,000,
however, as proposed in the Commission
ers' bill sponsored by Mr.. Bates, it would
affect about 10000 instead of $500 tax
PAYERS. The delicate question is whether
the House would be willing to approve that
bill II it affected very many Government
employees who maintain voting residence
in the States
It is too bad that the local income tax
is clouded by such considerations. AS long
as there is to be a local income tax, 1t
should be fair to everybody. 1t should tax
the salaries of people who live here, re-
gardless of voting residence in the States.
Double taxation would be avoided by re-
ciprocal credits. That is the sort OF income
tax that would be applied here If this were
q self-governing, self-taxing jurisdiction.
That is the sort of income tax that applies
In the States that have the income tax.
But these political considerations do
apply here, as experience has demon
strated. To be realistic about it, the Com
nlissioners' first consideration should be
fair income tax. If Congress is willing to
approve a fair income tax, beginning at
$4,000, that is one thing. But If the $5,-
600 touches so many people that Congress
will be tempted again to exempt Govern
ment workers claiming legal residence IN
the States, the limit had best be kept, as
in Representative Smiths bill, at $4,000.