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It is a tax which is readily enforceable. I think it should be very carefully considered.

In 1944, our property tax was compared with nine other cities with similar population. The basis of comparison was the tax rate adjusted in each case to 100 percent assessment. The range was from $3.99 per hundred to $1.58, the figure for the District. The next lowest was $2.35. We believe, therefore, that in view of the need for revenue, the Commissioners could safely raise the rate from $1.75 to $2 per hundred dollars of assessed value.

A change in the 1942 law granting exemptions to certain scientific institutions should be made so that these are either taxed or the District receive the equivalent of taxes from the Federal Government.

Provision should be made also for receiving the tax or equivalent when Federal property is rented to private persons.

We suggest H. R. 2279, H. R. 2281, and H. R. 2284 for excise taxes on alcoholic beverages, cigarettes, and amusements, as temporary measures. We support them because of the urgent need for funds. Howerer, these taxes bear more heavily on those less able to pay, and should in the future be replaced by the income tax.

A study should be made of the present system of granting liquor licenses. The large sums of money which dealers allegedly receive for the sale of their licenses might be tapped to furnish additional revenue for the District.

The distribution of liquor by the District government is a possible large source of revenue which should be carefully looked into.

Borrowing to meet needed capital improvements should not be supported until the District has control of its own fiscal policy. Further removal of control from the citizens of the District seems unwise at this time.

A sales tax is an undesirable form of taxation because it imposes far too heavy a load on those least able to pay.

The people who contribute the largest percentage of their income to a sales tax are the lowest income groups. Furthermore, if two men have the same income, with a sales tax the one who supports children, parents, and so forth, pays the greater tax because his purchases are necessarily larger; whereas with an income tax the man with fewer dependents bears the greater burden. The tax reaches unemployables such as permanent invalids and those retired on Government pensions.

We agree that the sales tax would bring in revenue from nonresidents who use the District facilities, but we believe that these people should be taxed by changing the income-tax law to cover them. A tax on hotel bills over $2 would be a method of reaching the transient.

We cannot see how the use tax, designed to tax these outside purchases could be enforced.

Finally, we oppose the sales tax because we believe it would be difficult to administer and to enforce.

Considering the favorable fiscal position of the District with respect to potential sources of revenue, we believe that the money should be raised by the sounder methods proposed in other parts of our statement.

The fiscal problems of the District of Columbia are becoming increasingly serious. Their solution primarily depends on the amount and form of the contribution the Government of the United States inakes to the support of its Capital City. We believe that the present

system under which the Federal Government contributes to the support of the District is faulty in principle and inadequate in amount.

As a municipality, the District is unique in almost every way. Its individuality is nowhere more conspicuous than in its tax and revenue status. Unlike most cities, it has no control over its taxation. It cannot borrow money; it cannot, as most cities do, rely on States for help in the care of the mentally ill, aid with education, and so forth. It is dependent on Congress.

Every municipality raises revenue by taxing real property, and Congress has authorized the District to do so. But Congress has recognized that the District cannot live on its own resources. Quite properly, Congress has contributed to the maintenance of the city in the form of a lump-sum contribution, calculated annually.

The lump-sum arrangement of the past has little to recommend itself. In the first place, it seems ridiculous that the Members of Congress, elected by their constituents to administer national affairs, should, each year, have to participate in a lengthy debate over the amount of the payments to the District. Beyond that, results of the annual decision have been increasingly inadequate, measured by any yardstick of efficiency in municipal affairs.

For 1946 approximately 90 percent of all District revenues was derived from local taxes. General fund revenues represent about 80 percent of total District income. Taxes on real property provide about 50 percent of general fund revenues. Yet the District can tax less than 50 percent of its land. Of the total area subject to taxation, 19 percent is exempt because it is owned by the Federal Government, and this ratio will increase as the Government expands, removing more and more of the most valuable property from our tax rolls.

The seriousness of the revenue problem created by this situation is obvious. It is aggravated by the fact that the District provided numerous, expensive services free to the Federal Government. To mention only some examples, we give police and fire protection to federally owned property; we bear 90 percent of the costs of the parks and of the Zoo which are more expensive than they would be were this not the Capital City. The District pays for curbing, gutters, and so forth, around Government property. Additional land is removed from taxation by being owned by foreign governments. For all of these items the Federal Government should reimburse the District.

In the face of this increase of federally owned and tax-exempt land and the accompanying services, the Federal payment has dropped from 26.1 percent of the total general fund revenue in 1925 to only 11.5 percent in 1947.

Although S. 215, a formula for Federal payment, could not provide the equivalent of the taxes due on Federal property this year, to say nothing of the other services performed by the District for the Federal Government, it offers, in part, an effective answer to the problem. In the first place, it relieves Congress of the annual necessity of attending to this matter. But, more important; it puts the Federal payment on a basis which takes cognizance of changing conditions.

We need a plan for Federal participation in District expenditures which will be better related to the tax program and which will encourage development of an adequate and fair local tax system. Above all, we need increased and predictable Federal support of a local

budget which should provide public services appropriate to and demanded by the District's position as the National Capital.

We have, however, one major reservation about S. 215. We believe it would not produce for the '48 budget all the funds which the Federal Government should contribute.

Under the S. 215 formula, we understand that the ratio of federallyowned land, with exceptions provided, to the total land area would be approximately 19 percent. This would be applied to the revenue, exclusive of trust funds and Federal payment, for fiscal year ’46, this being the last complete fiscal year. Thus, for the general fund we would have 19 percent of $52,481,000, or $9,971,000. If the Federal Government paid the equivalent of the property tax on federally owned property, it would be $12,458,000, an increase of $2,000,000. The equivalent of taxes on property owned by foreign governments would be an additional $191,000. The other services which the District gives the Federal Government would be another substantial figure.

We realize that as the revenue for the general fund increases the payment, as provided in S. 215, would likewise increase, but we believe, in view of the present acute need for new services and, particularly, capital outlay, that special consideration should be given to the Federal payment for the general fund for the coming year.

In conclusion, the revenue which the above program could produce would depend on many factors. For the first year, the full yield could not be expected from any new method of taxation. The following table is the minimum increase over the present revenue plan which we believe our program would produce for the next year for the general fund:

Increased Federal payment of $2,000,000; from broadening the base of income tax, 2,000,000; from increased rates, 3,000,000; from better enforcement, 1,000,000, a total of 6,000,000 new dollars; this would be from the income tax.

From a change in the property tax rates, an increase of 4,000,000; from the excise taxes 2,500,000, a total of $14,500,000.

Since only $11,000,000 additional revenue would be needed to meet the President's budget for the general fund, the additional $3,500,000 should go first to providing $900,000 to implement the proposed new teachers' pay scale; then the rest should be applied to restoring cuts in the Department requests for education, health, welfare, and recreation.

In conclusion, we believe that (1) the income-tax rate should be increased, the base broadened, and enforcement strengthened; (2) the property-tax rate should be slightly increased; (3) the Federal payment should be increased and determined on a permanent percentage basis with special consideration for the needs of fiscal year 48; (4) the bills on excise taxes should be supported; (5) other new methods of raising revenue, such as government distribution of liquor, should be studied. If the above program is enacted, we believe the proposed 2-percent sales tax is unnecessary, and should not be supported.

Senator Cain. Thank you very much for your statement, Mrs. Wilson.

It seems to me that you want improvements

Mrs. Wilson. We do.
Senator Cain. And that your people-
Mrs. Wilson. Are ready to pay for them.

Senator Cain. Are willing to pay for them. I think that is a very healthy point of view.

Mr. BATES. Mrs. Wilson, have you any criticism to offer as to the present administration of the District from the standpoint of efficiency and economy, extravagance or otherwise?

Mrs. Wilson. Our organization is one of housewives, not of experts in money matters. We have concerned ourselves with the policy of the organization, but we have no adequate opinion as to the question of expenses

Mr. BATES. Well, it was brought out in testimony last week, having in mind whom you represent, the housewives, and so forth, that collection of garbage and trash was twice a week, and is now once a week. Is that meeting now with quite general approval by the housewives of the District ?

Mrs. Wilson. I think I can speak only for myself, and for myself, we are receiving a collection twice a week. Mr. Bates. That is twice of trash or garbage? Mrs. Wilson. That is garbage.

Mr. BATES. I understood the Department head to say that it had been cut down to one collection a week.

Mrs. Wilson. Up to this point, speaking again only for myself, I would shay the service has been satisfactory.

Mr. BATEs. During the summer I presume that twice a week would be necessary. I questioned very much whether it was necessary during the fall, spring, and winter of the year. I think that is where a

I a good deal of saving can be made, if proper care is exercised in taking care of the garbage itself.

Mrs. Wilson. Again, speaking just for myself from my personal experience, I think that probably when the garbage and trash removal come down

Mr. BATEs. You have trash collections twice a week, too, or just garbage?

Mrs. Wilson. No, just garbage.

Mr. Bares. You have no criticism of the efficiency of the administration ?

Mr. WILSON. No.

Senator MCGRATH. Mrs. Wilson, I understand the name of your organization is the Washington League of Voteless Women Voters.

Mrs. WILSON. The Voteless District of Columbia League of Women Voters. We aspire to vote.

Mr. Bates. That is all, Mr. Chairman, of Mrs. Wilson.

I wonder, Mr. Chairman, the time is getting short, and I would like to know whether or not we have any witnesses here who can just give us some information about the efficiency of this Districi government.

Senator Cain. We might pose the question.

Mr. Bates. We are anxious, of course, to hear everybody in regard to the support or opposition of any of the proposed tax suggestions. but I think that ought to be deferred until after we hear the presen. tation of evidence in support of the bills by the Commissioners.

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What we are trying to do is to find out in what way the administration is being carried on here. Are there any criticisms, can we tighten up the expenses somewhere along the line, are there extravagant methods employed here?

Senator Cain. Will you give your name to the reporter, please. STATEMENT OF MRS. LESLIE WRIGHT, CHAIRMAN OF THE LEGIS

LATIVE COMMITTEE OF THE FEDERATION OF WOMEN'S CLUBS, WASHINGTON, D. C.

Mrs. WRIGHT. My name is Mrs. Leslie Wright, and I represent the Federation of Women's Clubs, but we will endeavor to talk about taxes,

Senator Cain. May I ask if you have an official title within your organization!

Mrs. WRIGHT. I am chairman of the legislative committee for the Federation of Women's Clubs, District of Columbia Federation of Women's Clubs, and we are for the sales tax.

Senator CAIN. Indeed.

Mrs. WRIGHT. And we represent 6,500 housewives. We have meetings of our legislative committee, and we have council meetings, and executive board meetings, and I have never at any of these meetings heard any criticism whatsoever of our District government. We have been very well satisfied with it.

We feel, of course, if they had a little more money, just as the housewife, if she could get a bit more money from her husband, she could use it.

Mr. BATES. Not necessarily the vote but more money.

Mrs. WRIGHT. I will tell you, Mr. Bates, I have a vote with my husband, but I am a District resident.

Mr. BATEs. Oh, that is all right.
Mrs. WRIGHT. I can say this

Mr. Bates. I can understand why you do not want to vote in the District of Columbia.

Mrs. WRIGHT. I would like to say this: This is no criticism of you because I do not think you have ever been in the State House, as far as I know, but I get a great deal more courtesy in the District building than in the State House.

Mr. BATEs. We will have to change that.

Mrs. Wright. For instance, they put a gasoline station near my husband's home up there. His folks have lived there for 250 years. I could not stop it. We telephoned and telegraphed because we could not get up there because my son was graduating from Annapolis that dav.

In the District they were taking down a historic old tree which showed the encampment of the Civil War veterans, and which was one of the oldest trees in the District, and I could not do anything with the people who were taking it down, but I called Capitol Hill and the District Commissioners and they ordered the tree left there. That shows the efficiency of the District government.

Mr. BATES. What we are trying to find out is inefficiency.

Mrs. WRIGHT. I never found any inefficiency in the District government because, as I say, we have always gotten courtesy.

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