Evening star., 1949-01-23

late the problem, ana snow why
though the history is confused and
in many respects unhappy, it IS
perhaps remarkable that so much
progress was achieved, considering
the emotions inevitably aroused
when a disenchanced government
must tax a disenlrsnchiced people.
Taxable Group Defined
This study properly begins with
III da,e June 30, 1887. The Com
mi 9ioners re. ;ort for The fitcal year
ending that Gay showed revenues
collected of $29,eO5457.29 and eX-
pencitures of s37,243,l56.22, for a
delicit of s7,336 ,695.93. To rsmsuy
this situation Congress pass>d an
Inheritance and an estate taX, and
then turned to o.her possible
sources OF revenue In February,
1888, the House Subcommittee on
Fiscal Affairs of the Committee on
the District of Columbia opened
hearings on a bill combining a sales
tax and an income tax. The income
tax provisions contemplated an an
I:lal levy upon every resident Of
the District, with a credit allowed
for income taxes paid elsewhere, II
sEy. A ''rccioent" was defined es a
pei son vino was "Gomiciled .in the
District on the last day OF The
a. be year, or VINO "Ior il,"Ie
nan SIX months OF tilc a:.ao,e var
msii.Caine-. his place o. aecde with
in the District, WEe hai CoIl.c.ltd
in the District or no The ro-
po-ed law stated that when per-
son had ma ntained a place of
abode in the Dis; rict for more than
half of the taxable year, the fact
that he claimed or exercised the
right to vote elsewhere should not
OF itself constitute him a nom
resident of the District
Sales Tax Opposed
The 1883 hearings lasted eight
days. In accord with the salutory
congressional custom of allowing
voteless District inhabitants as
much voice as possible in District
affairs, representatives, of many
civic and professional groups were
heard. The sales tax proposal was
most thoroughly discussed ard most
bitterly opposed Favoring the
sales lax, n representative of the
Federation Of 8usinecsn"n's Asso-
Citations testified that his groups
were not in favor of income taxa
ton because they did not feel IL
could be applied to the city as a
whole; that is, as including those
who work here but live elsewhere,
and the Federal employees in addi-
tion." Opposing the sales tax, a
representative OF the National Labor
Relations Board Union testified:
NOBODY should be exempt from in
come ts:--no one in the District
of Columbia should be exempt. ."
TeCcral employees are perfectly
willing to pay the tax as long %
they are taxed on ability to pay"
With the advent of the 18th Con-
gress. a new bill was introduced
and more hearings held. This bill
also provided for both sales tax
and an income tax. In the midst
of the hearings the Supreme Court
handed down a decision which
settled in favor of taxation the con-
stitutionality of an income tax by
one government on the salaries OF
employees Of another government.
Opponents of the sales tax rejoiced
that the possibility of real In
come tax removed the necessity Gf
not a widespread desire) for sales
tax. The subcommittee came up
with an income tax act ultimately
approved on July 26, 1899.
'Domicile' Loophole
AS finally approved, this act pro-
vided for tax to be levied upon
the taxable income of every indi-
vidual domiciled in the District Of
Columbia on the last day of the
taxable year." just why the tax was
so imposed. rather than reaching
residents" as previously suggested,
Is made clear from the following
statement of a subcommittee men,
ber: The very explosive and con-
troversial item relative to the ap-
plicability of the tax was finally
resolved when we wrote a pro-
vision in the conference bill to the
effect that 1t applies only to those
who are legally domiciled in the
District of Columbia OH the last
day of the taxable year. This takes
out members of Congress, it takes
out Senators, and it takes out the
employees. who come and go from
Washington
1t TOOK out considerably more than
that. as seven cases in the Court of
Appeals and one case in the Su-
preme Court during the following
eight years show. AS the District
began to administer the new act it,
of course, met resistance from those
who felt themselves not
covered. In a 1899 case, the party
resisting had been born and raised
In Pennsylvania, had come to Wash
ington in 1914, and had lived here
ever since. He married a WASH
ington native and with her pur-
chased and occupied house In
He had bank accounts
In Washington, and church and
lodge memberships, and made con-
tributions for charitable purposes
here. On the other hand, he had
been q registered voter in Pennsyl-
vania since coming of voting age,