calculation taken item by item of the cost of running the District of Columbia, and dividing them up item by item as between the respective responsibilities.

Senator CAIN. That is your concept of a formula?

Mr. ATHERHOLTZ. That is my concept of a formula.

Senator CAIN. In order to determine the idea of contribution.

The CHAIRMAN. Mr. Chairman, may I ask the witness what he thinks of the O'Mahoney bill?

Mr. ATHERHOLTZ. I was just getting to it as my next point, and I am picking that very bill up, sir.

Senator CAIN. This is Senator Buck, chairman of the Senate District of Columbia Committee.

Mr. ATHERHOLTZ. I have never had the pleasure of meeting you before, Senator Buck.

The O'Mahoney bill is one more sad thing, from the standpoint of the District of Columbia. The O'Mahoney bill starts out by purporting to give the District of Columbia an annual payment which would be based on the comparative land areas in use by the District government, the District residents, on the one hand, and by the Federal Government, on the other hand.

However, as soon as you get past the first paragraph you find that it does not-it immediately excepts large elements from the area of the Federal lands and properties which it does not except on the other hand from the area used by the District government and residents.

Take a single matter of the area as here stated; the entire land area of the District of Columbia is here stated from 38,273 acres, we can probably take that at 40,000 acres, owned by the United States in the District of Columbia, where we would deduct from it any such land embraced within the boundaries of streets, avenues, roads, and alleys. Well, now, the Assessor's figure shows 47.82 percent. I think that is precisely the number of percent of land area of the District. of Columbia that is occupied by Federal activities.

If we take that is roughly 48 percent. If we take 48 percent of this 39.273, we come to about nineteen and a quarter thousand acres. What happens? As soon as they deduct any land embraced within the boundaries of streets, avenues, roads, and alleys-understand, Senator, that is deducted solely in figuring the area of the federally occupied land, but it is not deducted for purposes of comparison from the area occupied by the District. So that takes us down by 15 percent, and instead of 19,250 acres, we find only 13,614 left; that is 15 percent, and that is out of the total area.

Now, sirs, that is not deducted from the area occupied by the District, wherefore, the advantage to the Federal Government is not 15 percent; it is twice that, 30 percent.

The CHAIRMAN. You have satisfied yourself that is true? How did you arrive at the fact that it is not deducted in the case of the District area?

Mr. ATHERHOLTZ. Because it says the term "land" owned by the United States in the District of Columbia means the total number of acres of land owned by the United States within said District on the

1st day of July of the preceding fiscal year, exclusive of the following: First, any of such land embraced within the boundaries of streets, avenues, roads, and alleys; second, any of such land which is embraced within the park areas of said District; third, any of such land used exclusively by the government of the District of Columbia.

The CHAIRMAN. That is used in arriving at the Government figure. Mr. ATHERHOLTZ. Now, the term "entire land area of the District of Columbia" means the total number of acres of land within said District, 44,317 acres, less the amount of such land which is permanently covered by water, 5,044 acres, or 39.273 acres in all; see section 2 (a). That defines the entire area, and you notice that the deductions are not made in figuring the entire area of the District of Columbia, but then you do contemplate taking these reductions from the areas occupied by the Federal Government.

Senator CAIN. The substance of your criticism is that the O'Mahoney bill, so-called, does not go far enough in acknowledging a Federal obligation.

Mr. ATHERHOLTZ. It certainly does not, sir. I am in agreement with you on that.

Senator CAIN. Or to put the question the other way around that insofar as the bill goes, in your opinion, it is arrived at

Mr. ATHERHOLTZ. Senator, if I agreed to that statement, I would be agreeing that what is written in the bill or what is not written in the bill is objectionable. But what is written in the bill is all right, and that I did not say. I say that what is written in the bill is certainly far from right because it figures, it computes the Federal area on a totally different basis from the District area, and it computes it in a way that doubles the disadvantage to the District because since the two areas amount to about the same, 47.82 percent in area, taking roughly double, when you take off one and you do not take it off the other you are just doubling the disadvantage to the District.

Senator CAIN. Have you written a rough draft, perhaps, of what you consider a

Mr. ATHERHOLTZ. What we consider to be a good bill?

Senator CAIN. Yes.

Mr. ATHERHOLTZ. Well, we are willing to do so; not at all unwilling. Senator CAIN. Why do you not do it?

Mr. ATHERHOLTZ. I will accept your invitation with pleasure; thank you, Senator.

Senator CAIN. This committee is anxious, without prejudice, to study any concrete proposals that are made before us, and you have obviously given a great deal of thought to it.

Mr. ATHERHOLTZ. Yes, sir; we have.

Senator CAIN. And, I take it, on the O'Mahoney bill, you submit to us your official objections and the reasons why, and replace those objections with your own recommendations.

Mr. ATHERHOLTZ. Well, we certainly thank you for the invitation and we shall accept it.

Senator CAIN. We are looking for different approaches to this formula problem which in our minds is basic, and that is why we are delighted to ask you to tell us what you are thinking of.

Mr. ATHERHOLTZ. I will hasten on through these other bills. I have them arranged in order, the first of which is a tax on admissions paid in the District of Columbia. The Northwest Council of Citizens' Associations opposes that; we oppose it on the ground that we just sort of think that a fellow ought to be able to have some little pleasure; if everything else gets taxed, we think he ought to be able to go to the movies and such things without being taxed. That is all we need to say on that.

The next is H. R. 2280, the tax on gas, electric, and telephone service. We understand that the Commissioners have dropped that, and the action of our council on it was to disapprove it.

Senator CAIN. That is not correct. The Commissioners have merely said there are other bills they think more highly of.

Mr. ATHERHOLTZ. Thank you, Senator, because I was getting ahead of my own words on that. I had not realized earlier this morning that there might be a little support for it later by some other group, and that we should express our objections on that.

I want to approach that by mentioning the general tax philosophy of our group, and that is that in the District we feel that there are so many people not paying any taxes because of their residence or domicile outside, plus large exemptions, people who come here and through crowding in apartments and homes, especially as we found in the last few years, they do not add one penny to our real-estate taxes, and escape all other taxes.

Mr. BATES. You do not think they contribute to the value of properties by coming in here and occupying all these rooms that they have to pay 20, 30, 40 and 50 dollars a room for? You do not think that contributes to the value of those properties, and the ability of the property owner to pay taxes? You do not think they contribute at all to the District by so doing?

Mr. ATHERHOLTZ. I say that, and I think you are talking about two different things, Mr. Bates. Our view is simply this: When they come into the District and pay what may or may not be exorbitant room rents, and when I was here in 1918 it seemed exorbitant to me whatever I paid, the people do help those property owners, but the assessment and the real-estate tax that the District officials get on that house does not go up one penny.

Mr. BATES. I do not think you have studied the report of the Board of Assessors. The determination of property values is based and made on the basis of the ability of people within the community to meet the requirements of taxes, and that can only be determined by the income of the people or the purchasing power of the people. When you see the purchasing power of the people in the District flowing out of offices of the Federal Government alone increasing from a little over $200,000,000 in 1937 to nearly 800 million in 1946, then that is the base right here in the District of the wealth of the District, and that is why the property in the District is being revalued this year by the Board of Assessors in the amount, I think, of 150 million of new values.

Mr. ATHERHOLTZ. I expect to come back to that point. But when I live in a house, and the house is assessed at a certain amount, and I

move out and somebody else takes in roomers, I do not think the tax goes up, and when the rooming-house owner finds the business up profitably I do not think the tax goes up. However, the contribution is very minor, if that is so.

Mr. BATES. I think it is very substantial.

Mr. ATHERHOLTZ. I am going to come back and touch on that point a little bit further, if you will permit me to approach that on a little different angle and from a little different direction.

The tax on cigarettes is dependent on another thing, and I am going to put that farther down.

I am going to put aside the income tax and sales tax, and approach them later, and have other comments on that.

The tax on annual inspection of motor vehicles, we feel, is quite reasonable, and we have no objections to it.

Senator CAIN. Could you not enthusiastically support that one! Mr. ATHERHOLTZ. Senator, we are going to enthusiastically support

another one here in a moment.

Senator CAIN. You have no idea how that inspires us when somebody enthusiastically supports one of these bills.

Mr. ATHERHOLTZ. I think the psychology is good because, after all, I think when I was criticizing the action of Congress in handling the District of Columbia, over many years, I think the problem we have to get at there is more one of psychology than anything else. I do not think Congress

Mr. BATES. You think it is a mental condition that you ought to deal with.

Mr. ATHERHOLTZ. I think you have the language.

We want to come to the Income Tax Act, and that is one that our council unanimously approved. Our representatives comprise two representatives of each of the civic organizations west of Rock Creek, the best area of the city and one of the best taxpaying sections individually in the District, and we are strong for this income tax, and we think it is absolutely essential for the District's financial structure. Senator CAIN. Let me ask you a couple of questions. Are you an attorney?

Mr. ÅTHERHOLTZ. Yes, sir.

Senator CAIN. You have studied the bill carefully?

Mr. ATHERHOLTZ. All except the credit. I did not go into it as carefully as I would have to present a case in court, but I did give it careful consideration.

Senator CAIN. As a result of the careful consideration that you have given the bill, in its present state it suits your membership!

Mr. ATHERHOLTZ. It does, and, in fact, most of the members of our council are attorneys.

Senator CAIN. Mr. Bates and I have a number of criticisms of the bill which are going to take us some time to reconcile. There are, for example, provisions for double taxation in there which, I am satisfied, you would not subscribe to, but it is not my purpose to engage in any debate with you, Mr. Witness. I merely wanted you to know that we approve of the bill in principle, but its particulars are in need of further study.

I need not call your attention to the fact that once we have your report we still have to pass the legislation.

Mr. ATHERHOLTZ. Mr. O'Hara, I believe it was, who yesterday brought up that matter of double taxation. I was not here during the morning, but I was here during the afternoon and we do not altogether agree with him. We take the position that-this is just a little note I was making by way of memorandum while he was talking-if a person lives in Virginia and works in the District is he really entitled to allowance for taxes paid in Virginia? Do we not really have two separate States each supplying the elements for which taxes are assessed? Taxes are not assessed just to get a little money; they are taxed to pay for necessities, the service provided by the cities, the services that we provide a person who comes from Virginia or Maryland, roads, bridges, water mains, sewers, police protection, fire protection; and as a result of that the fire and police retirement fund is in there; health protection; courts, in a lesser degree; recreation; parks; libraries; and so forth.

This man has a choice to exercise, and if he exercises a choice that requires the State of Virginia or the State of Maryland to provide every one of those facilities for him, that costs just as much whether he is there 5 hours a day or 4 hours a day, and he exercises a choice which requires the District of Columbia to duplicate those facilities which again cost the District of Columbia money.

The CHAIRMAN. You would soak him on both sides of the line? Mr. ATHERHOLTZ. Sir?

The CHAIRMAN. You would soak him on both sides of the line. Mr. ATHERHOLTZ. I feel that he requires twice as much service, and

Senator CAIN. He requires twice as much soaking.

Mr. BATES. Not only that, Senator Buck, but the Virginia tax and under this bill, the District tax, and also a tax in the State of domicile on the same income, triple taxation.

Mr. ATHERHOLTZ. Well, of course the State-of-domicile doctrine is well known to all of us, and so forth, but the general trouble is that the gentlemen sit here with a psychology that is slanted from your own home States and not the District of Columbia, and, while we understand the criticism you make, on the other hand we ask you please to recognize the situation that we are in as a result of this dual government here; that the Constitution of the United States sets up and elects you to preside over and provide for and recognize the earnest problems that we have here and take care of us.

Mr. BATES. Let me just make a brief observation. You mention sewers and streets and water, and so forth, but it seems to me that you are getting away, perhaps, from the most substantial arguments that you have that reflect a very substantial cost of the District, and that is the education of children of people who are domiciled and live outside of the District line,

Mr. ATHERHOLTZ. I was trying to keep that out for the moment. Mr. BATES. And you are not going to say a word about that, are you. Here we have 4,000 children who, it is estimated, are being educated in the District schools, being paid for by District schools, who are

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