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Mr. BATEs. That is fine.

Mrs. Wright. In my own small way, I am very well satisfied, and I have never heard anything criticized. Now, in these garbage collections, we have it three times, and the only criticism I have heard is when a holiday comes along, such as Christmas, if it comes on a Thursday, or Thanksgiving comes along, and if it happens to be the day when garbage should be collected, they do not call for it. They collect it three times a week otherwise.

Mr. BATES. I am going to ask you a personal question. You think you need more money in the District ?

Mrs. WRIGHT. Yes.
Mr. Bates. Where do you pay your income tax ?

Mrs. Wright. We pay our income tax in the District of Columbia because my husband feels that we live here a great part of the year, and we should; we pay real estate taxes in Massachusetts, and a poll tax in Massachusetts.

Mr. Bates. Then you also pay an income tax in Massachusetts.

Mrs. Wright. He attends to the tax. I pay my end in the District, but the thing is this: That we pay—I know he pays the District income tax in preference to the Massachusetts tax, but we pay the Massachusetts real estate taxes, and the poll taxes up there.

Mr. Bates. You, of course, claim a residence in Massachusetts.
Mrs. WRIGHT. For voting purposes.
Mr. BATEs. That is a legal question.
Mrs. WRIGHT. All my children are registered there.

Mr. Bates. How about your husband, is he domiciled there in Massachusetts ?

Mrs. WRIGHT. Oh, yes; that is his home; his folks settled there in 1629.

Mr. Bates. He pays an income tax in the District ?
Mrs. WRIGHT. Yes, sir.

Mr. BATEs. How does he get away from paying one in Massachusetts?

Mrs. WRIGHT. I think the law allows him to choose which place to pay—which place he prefers.

Mr. BATEs. They have a reciprocal arrangement, of course, but that does not deny the right of the State of Massachusetts to collect an income tax.

Mrs. WRIGHT. Well, it is up to the State then if they want to collect it. He might want to pay them together, but he never told me about it. I do know he paid the District income tax.

Mr. BATES. The reason I ask that is my special assistant is a consultant in Massachusetts to try to get new revenues, and if he can tax your husband, I think he ought to do it.

Mrs. WRIGHT. Well, along that line. I want to say that we spend our summers there, and I am used to the tax on meals which goes to the oldage pension fund, and the Federation of Women's Clubs recommended that kind of a tax, but I would like to say that my organization lias never made any criticism of the District government.

We feel that the District government oflicials are friends and that the members of the House and Senate Committees of the District of Columbia are friends, and we have a very nice arrangement with them: always have been received and talked to, and I really am a little worried

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personally if we have a change in the government that I might be kicked around like I have been in the State House in Boston at times.

Senator Cain. I would like to hear your favorable comments to and about the Commissioners.

Mrs. WRIGHT. Thank you.

Senator Cain. This is an opportunity for citizens to be heard and they should either be in opposition or in support, and it is very gratifying to the gentlemen.

Mr. Bates. Of course, that is music to the ears of the Commissioners, but it does not help us any in solving this problem.

Mrs. WRIGHT. Mr. Bates, I think it helps you this way. I think that you will understand that I have not been authorized to come down here by my organization and give the Commissioners a pat on the back, incidentally. I was sent down here to talk for the sales tax, but I feel that as a representative of our organization, I know how my organization feels, and we have never heard any criticism.

Mr. Bates. You think the District Commissioners are doing a good job?

Mrs. Wright. I think they have always done a good job. I think when the Engineer Commissioner, Mr. Hazen, was sick, and Mr. Allen was running around the country having a good time and

Mr. Bates. Nothing of that kind is going on now. He was probably on a political mission, and that might have been allowable.

Mrs. WRIGHT. I do not know; this is just my own opinion and not the opinion of my organization; but I feel, as a person whose folks helped—my great-grandfather sold the site of the Mayflower Hotel, and I have a personal interest in the District of Columbia, and I would just like to say there are 6,500 women who are all home owners, and they represent a cross section of Washington, and they never, so far as I know, have made any criticism of it.

I Mr. BATEs. Mr. Chairman, can we have somebody who is just as willing to tear the District Commissioners apart?

Senator Caix. Here is a gentleman.

STATEMENT OF JEROME B. MCKEE, CHAIRMAN, SPECIAL TAX AND

LEGISLATION COMMITTEE, FEDERATION OF BUSINESS MEN'S ASSOCIATIONS, INC., WASHINGTON, D. C.

Mr. MCKEE. My name is Jerome B. McKee, and I represent the Federation of Business Men's Associations, Inc.

I think that you are trying to get at something that does not exist in the District of Columbia.

Mr. BATES. What is that?
Mr. MCKEE. That there is graft in the District government.
Mr. BATES. No, I had not insinuated there was any graft.

Senator CAIN. We are trying to get at something with an open mind that will result in benefits to the District, of which all of us are part and parcel.

Mr. McKEE. I might say that when you criticize these bids, for instance, if you would take the bids on veterans' hospitals, in the past 4 or 5 years, you will find they sent out bids for hospitals, and have not obtained one bid or else the bid was 50 percent higher than the amount set by Congress to build that hospital. The economic condi

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tions for obtaining material and labor and guaranteeing that, and furnishing bond prohibited an individual from engaging in business or a corporation from engaging in business.

Senator Caix. Mr. McKee, I think I can speak for Mr. Bates and myself when I say that we are much happier actually to have you say what you

than if you had said the reverse, but were there reason for you to say the reverse, it gives to Mr. Bates and myself an opportunity for helping with improvements. We are delighted, however, by the other approach that you see fit as a conviction to take. We think it is splendid.

Mr. McKec. Our association is composed of 28 organizations embracing 4,200 retail business.

First, I would like to preface my remarks by saying that neither I nor the members of the committee who have worked on this problem attempt to imply that we are economists. Even if we could qualify as such, we would recognize that economists disagree.

Aside from the committee, other members of the Federation of Business Men's Associations were consulted in our deliberations to ascertain properly the views of the members made up of various kinds of businesses. To this end we desired to ascertain how additional revenues could be obtained without disturbing business in general.

We recognized that the residual problem of the city is this: How can expanding services be maintained from which a large portion of the inhabitants have moved, but who süill work and play in the area? How can municipal finances, subject to rigid controls, meet the climbing outgo? The services provided by the city in response to its growth remain, and are growing in response to demand and necessity.

Our city is not unlike other major cities; it also has tax-exempt property; and while the Nation-wide figures of tax-exempt property is given as $26,000,000,000, constituting 18 percent of the Nation's taxable property, we, as a city, enjoy the high average of 51 percent; thus, there is the almost desperate hunt for new sources of revenue.

St. Louis, for example, recently added an income tax, thus joining Philadelphia and Toledo in this projected avenue of income.

Philadelphia's tax of 1 percent without any exemptions aimed at recapturing that commuting population's income, applies to all income earned within the city, regardless of whether the recipient resides there, and to all residents who derive their income from businesses within or without the city.

The Philadelphia plan also embraces the field of professional musicians who, as individuals or through name bands, appear in that city for theaters, hotels, night clubs, and so forth.

The Shoreham Hotel here in Washington, we are informed, pays out approximately $50,000 a year for this type of entertainment.

Sewer rentals bring both Detroit and Cleveland in excess of $1,000,000 annually, with the tax spreading rather widely through the Nation. Garbage-collection fees are another source which produce varying amounts, depending upon the services and the rate.

But we in Washington do not want a conglomeration of taxes; we prefer a simpler, simplified tax.

We have not failed, however, to recognize that we have with us as citizens of the city people of low income, and many with no in. come, and the latter, to a certain extent, are responsible for the sum of $11,771,300 being inserted in this budget for public welfare. Yet

the supplemental requested appropriation of $2,603,814 for this year creates a total of $13,594,490 for this activity.

If we create more unemployment the present requested appropriation for that purpose of nearly $12,000,000 might be found nearer sixteen-million-or-more dollars.

Remember, the combined estimate for our police and fire departments is only $9,846,000, and our public schools is only $19,495,400.

Every citizen feels that none of those three items can be cut any lower, but if we wreck the economy of the city and have to pay out more for public welfare, where will this money come from? We say advisedly that these are not idle words.

The report of the District of Columbia Unemployment Compensation Board for 1946 has this to say, and I will leave a copy of that

with you:

The total number of checks issued during the past year was 100,030, amounting to $1,708,337. This represents an increase of 386.3 percent over the total of 20,570 payments made during the preceding year, and it also constituted a 369.4 increase, percent increase, over the $363,907 that was expended in 1945.

Payment for total unemployment accounted for 98.3 percent of the checks issued, while 1.7 percent was for part-total and partial unemployment.

The amount paid out monthly averaged $142,361, and varied from $89,932 in January to $163,735 in December, 3 months ago.

Approximately 9,013 individuals received unemployment compensation in 1946, as compared with 2,152 individuals in 1945. It is estimated that the number of individuals receiving benefits was about 4 percent of the total number of workers in covered employment. About 80 cents was paid out for each dollar of contribution received, leaving only 20 cents for a cushion.

a Collections of contributions levied on District employers of one or more persons amounted to $2,125,959 in 1946. This represents an increase of $431,520 over 1945; 16,770 employers contributed in 1946 as compared with 15,650 employers in 1945.

The rise in 1946 over 1945 was due to an increase in the number of employers reporting; namely, 1,120 more, and higher wages in certain business establishments.

Taxable wages paid to covered workers in 1946 totaled $403,595,227. This amount represents the aggregate pay roll of 212,005 workers, for an average income of $1,937, and contrasts with 1945 when $332,663,127 was paid to only 189,101 workers, a gain in 1946 of 22,904 workers and $70,932,100.

Remember, the total receipts are based on the first $3,000 of earned income only. It does not apply to those over $3,000.

Nor do these figures include Federal or city employees, employees of charitable, educational, scientific, and other organizations, nor does it include a person engaged in business for himself, whether it is a professional man or a storekeeper.

For more factual matter we refer you to that report enclosed herewith.

Senator Cain. We have that, sir.

Mr. McKEE. The businessmen of Washington recognize that unemployment retards business; they recognize that taxing consumer goods affects business.

They want business to be good, and they want that business to stay in Washington. Any decline in business of one type affects business of all types; a high level of employment creates taxes from all sources, particularly income taxes.

Thriving business spends money both within and without their premises, creating employment for labor, for repair, maintenance and remodeling of their places of business.

When business declines, this type of expenditure also declines; when a spoke is taken out of the wheel, recessions set in, and if more spokes are taken out, then we have a depression.

If you permit any locality to become unhealthy, others soon catch the germ and the entire Nation becomes sick.

Our Nation has gone through such a period which is well known to all of us, and if it occurs again, we fear for the ensuing results therefrom.

Since the hearings before the Commissioners of the District of Columbia last September, the Federation of Business Men's Associations has had this problem before them.

Merely to enumerate specific objections to the proposed sales tax, and in order not to become redundant and repetitious, we merely list the objections in the following general terms:

1. Sales taxes are definitely retrogressive.

2. Sales taxes definitely curtail business (especially when the area is as small as Washington, and the borders of other States are within a 30-minute drive.

3. Sales taxes are absolutely unnecessary.
As to an increased gasoline tax, we object specifically because :

1. Estimated income will not become available due to decline in gallonages that would ensue.

2. A large percentage of the money is to be used for long-term capital improvements, and this is basically unsound.

3. Loss to dependent businesses when reduction in registration occurs, together with a lesser use of existing vehicles.

We could go into minute details as to our opposition against all the proposed taxes, with the exceptions of the Federal loan, water fund and miscellaneous receipts from water, aggregating $4,516,739.

Senator Cain. Let me stop you, if I may. Do I understand that the last-mentioned items are the ones that have your approval?

Mr. McKEE. That is right.
Senator Cain. You are in opposition-

Mr. McKee. We are opposed to the sales tax, increases in the gasoline tax, increase in the liquor tax, cigarette tax, public utility, and all the

Senator Cain. All the rest of the taxes.

Mr. McKEE. But the income from the others we are in favor, sir, of enactment.

We believe in the individual income tax, and the unincorporated business tax, as set out in H. R. 2282, but we desire to strengthen this by using the Philadelphia plan, with the exception that we would permit exemptions, whereas the Philadelphia plan does not grant exemptions.

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