« PreviousContinue »
sidering the services rendered we believe the formula should be so designed that the total contribution for 1948 should total a minimum of $14,000,000.
The income tax is the second most important source of revenue your committee should consider. The present law suffers from poor enforcement. Although only 85,000 District returns were filed last year, over 125,000 Federal returns were filed in 1939 when the Federal exemptions were the same as the present District law.
With present advances in income and growth in population, the number of returns should be above 160,000. All employers in the District, including the Federal Government, should be required to file with the District government a copy of their pay rolls on a semiannual or annual basis. Such a procedure would make the job of apprehending the chiselers much simpler.
The District Board of Commissioners is to be congratulated on its espousal of a change in the residence requirements for income-tax purposes. The tricky concept of domicile as presently interpreted is grossly unjust to the other taxpayers of the District.
If those who are domiciled here on the last day of the taxable year and those who maintain a place of abode in the District for more than 7 months of the taxable year whether domiciled here or not are required to pay District of Columbia income taxes, there will be a great increase in revenues from this source.
As to the income taxes proposed by the Commissioners in H. R. 2282, we believe that the exemptions are too low and the graduations in the higher brackets not sufficient to obtain an adequate return for the District from this source. We would propose an exemption for a married couple of $3,000 with $600 for each dependent. We recommend for your consideration the following schedule:
Tarrate Taxable income
percent First $1,500_
11/12 $1,500 to $4,500.
2 $4,500 to $10,000
212 $10,000 and over.
3 These increases would make the District of Columbia income tax more nearly equal to the Virginia tax. With a change to residence basis, an increase in rates, and of great importance, a thorough collection of the District of Columbia income tax, estimates as to yield should be revised upward from the stated $7,050,000 of Budget Officer Fowler.
In examining other sources of revenue, it should be noted relative to the property tax that there has not been a reassessment survey of all taxable properties since 1936.
Entire neighborhoods have sprung up in various sections of the city. Movements of business to different sections of the city, and various other phenomena, have caused radical changes in the time value of property. Much needed revenue is going uncollected for lack of a current reassessment.
The Washington Central Labor Union is opposed to excise taxes in any form. The national tax committee of the A. F. of L. has characterized such taxes as nuisance taxes.
They are simply variations of the sales tax. Thousands of members of the unions affiliated with the central labor union are employed in industries whose continued prosperity may be seriously threatened by the imposition of tax increases on beer, wine, liquor, cigarettes, and amusements. Musicians, bartenders, waiters and waitresses, truck drivers, cooks, and many other workers believe their jobs will be jeopardized.
If a greater Federal contribution is not forthcoming, and if the increased income taxes on a residence basis with a more thorough system of collections, plus the increased revenues that should be forthcoming from a reassessment of property should prove inadequate to meet the need, then we suggest that the Congress increase the tax rate on income-producing property in the District.
We propose this tax only as a last resort, but believe that it is infinitely preferable to a sales tax in any form including the very regressive sales tax on public-utility bills.
Mr. BATES. Thank you, Mr. Preller.
Mr. BATES. Where would you draw the line with reference to income-producing property?
Mr. PRELLER. We feel there is a lot of property where business has moved into it and that property is more valuable and they are paying the same rate they always did.
Mr. Bates. The only way you can get at an improved property, is by revaluation?
Mr. PRELLER. Yes, sir.
STATEMENT OF MRS. B. G. MCILWEE, WASHINGTON, D. C. Mrs. McILWEE. I come as a citizen and as a mother. I am not representing an organization. I do first want to say briefly on taxation, I do approve of the sales tax, and I think that the tax should be increased very heavily on all intoxicating drinks and saloons in the District. They are definitely affecting the health and morale of our citizens and our youth.
Then the taxpayers are required to try to restore those people and take care of them. That is where our heaviest tax should be placed.
Mr. BATEs. In other words, you believe they ought to be taxed out of business?
Mrs. McILWEE. Absolutely. They never should have been in business.
Now I want to speak on recreation first.
First, all recreation in Washington, D. C. should be under our District of Columbia officials. Mr. Christiansen has done a fine job under bad conditions, but we never have provided the things the chil. dren want most and at the least cost to taxpayers.
For several years I have suggested an outdoor roller skating rink with a big iron railing all the way around the rink and with a bicycle track on the outside of the railing.
Then light the rink at night. I know children want a safe place to skate and ride tricycles and bicycles. It will be nice even in winter for the snow could be removed. Then there should be more wading pools and showers for children.
Second, investigate how many people were brought here and put on relief by Eleanor Roosevelt and the New Deal. Return these people to their States and let them work. That will relieve the taxpayers here, also the health department, schools, housing, and transportation.
Thirdly, prohibit the children from Virginia and Maryland from attending our schools at our expense.
Fourthly, the Federal Government should pay its share.
Fifthly, Glenn Dale—you will find there is $3,000 paid to Dr. Peabody that should be transferred for nurses.
The welfare slogan is “A home for every child.” Then they put these children in "foster homes." What a reflection on Christianity and civilization. These children never should have been under Welfare. I suggest Congress transfer this appropriation to care for children to a fund for an orphan home for Washington children, one for white and one for colored, under the supervision of church, health, and education officials.
I thank you.
Mr. BATEs. Thank you very much, Mrs. McIlwee.
Mrs. Sullivan, we will hear from you. STATEMENT OF MRS. ELIZABETH T. SULLIVAN, REPRESENTING
PROGRESSIVE CITIZENS ASSOCIATION OF GEORGETOWN, WASHINGTON, D. C.
Mrs. SULLIVAN. The Progressive Citizens Association of Georgetown, representing 500 leading residents of that section, voted at the February 1947 meeting to endorse the Federation of Citizens Associations' resolution which favors the passage of the proposed O'MahoneyHébert bill.
The District of Columbia must maintain adequate health, welfare, and educational standards and cannot do this unless the Federal Government pays its just share. The Progressives offer three reasons for endorsing the formula:
(a) The Federal Government seeks additional revenue as it realizes higher costs; one example is the parking-lot situation; two have already been raised, and the Government is advertising for bids on the
1. Capital Park Hotel, formerly rented for $250; now rented $800 per month—220 percent raise;
2. Seventeenth and H Streets NW., formerly rented for $227.50; now brings $927 per month, 307 percent raise;
3. Thirteenth and Avenue (South Grand Plaza), formerly rented for $3,800; Government will advertise for new bids soon.
If the Government takes advantage of federally owned, tax-free land to increase their revenue, the Progressives feel that they should be subjected to taxes just like a private individual.
(b) Since such a large proportion of the District residents are Federal employees (200,000 or nearly 25 percent of 950,000) a large part of whom contribute nothing to the District, this places the financial burden on private industry and District employees.
(c) The Federal Government should pay for all the services it is now receiving free, such as water and additional police. For moral and practical reasons, the O'Mahoney-Hébert bill should pass.
In 1945, the Progressive Citizens Association urged that the Federal payment should be increased 25 percent of the entire District budget, but it agrees to the present proposal, as it considers the formula flexible and so workable with changing conditions.
The Progressive realizes that additional funds are needed and are willing to pay their share as District residents, but they definitely consider increase of the Federal contribution as the main means of securing revenue, which should be determined before additional taxing of the District occurs.
This organization does not know the amount of revenue needed to operate the District efficiently, except as recommended by the various D. C. department heads, and realizes the cost during certain years will be higher than other years, due to the increased population with replacement of and additional facilities, so it has voted on all the proposed new taxes, but it asks that they be used only as a last resort to raise needed revenue:
(a) The association votes in favor of a sales tax becanse it will reach all persons and will not be too hard on anybody; it is against a tax on foods, medicines, building materials, and utilities such as gas, electricity, and telephones.
(6) The association is in favor of broadening the provisions of the D. C. income tax to include more people; it is against increasing the rate that present D. C. taxpayers are contributing.
(c) The association is in favor of the special tax on liquors and cigarettes, but it excludes them from the sales tax. Since the Federal amusement tax is so high, it urges only a 2 percent tax on amusements.
These are the only taxes that the organization recommends that the District be burdened with, to increase the revenue not supplied by the O'Mahoney-Hébert bill.
Mr. BATEs. Thank you, Mrs. Sullivan.
STATEMENT OF F. JOSEPH DONOHUE, REPRESENTING WASHINGTON
RETAIL LIQUOR DEALERS ASSOCIATION
Mr. DONOHUE. I am F. Joseph Donohue, and I represent the Washington Retail Liquor Dealers Association.
We are in process of preparing a memorandum which we would like permission to submit to the committee not later than tomorrow; in the meantime, if I may make some comment, I would appreciate the opportunity.
I am glad I followed the gentleman from the Central Labor Union, though not particularly glad that I followed the two ladies that immediately preceded me.
A few days ago I noted that Mr. West said that as far as he knew, we who speak for the liquor industry stand alone in our opposition to the 120-percent increase in the tax on spirits and liquor.
However, I am glad to see that the gentleman speaking for the 180,000 members of the Central Labor Union feels that the excise tax, including the excise tax on liquor or increased tax on liquor, is particularly burdensome on the working class and is in line with us at least on that point.
From the point of view of the retail liquor dealer, it would seem first that the proposed increase in the tax on alcoholic beverages is unfair.
Indirect or hidden Federal, State, or municipal taxes often total a very large part of the selling price of commodities. This is particularly true of liquor and tobacco, but in no industry is it quite as true as it is in the liquor industry where such taxes represent today on an average of 52 cents on each consumer dollar spent.
For example, a fifth of PM Deluxe, an 86-proof spirit popular blend of pure bond whisky, sells in the local market for $3.29.
Of this sum, $1.65 represents a direct payment by way of excise tax of $1.55 to the Federal Government and 10 cents paid to the District of Columbia government. This is at the rate of 5010 cents for every consumer dollar spent.
If the new tax schedule as proposed in H. R. 2284 is adopted, the amount of the purchase represented by direct tax will increase from $1.65 to $1.77 out of $3.29. This will be at the rate of 53% cents for every consumer dollar spent.
At this time I might make the suggestion that the present price of this particular brand of whisky in the District of Columbia is $3.29. It is currently selling—I have the April 1, 1947, price list of the State of Virginia. That same item is now being sold across the bridge in Virginia at $2.85. . It is sold here for $3.29.
These figures represent only the direct tax paid to the Federal and District of Columbia Governments out of a purchase price of a bottle of liquor. The ultimate selling price must also reflect a number of other tax factors such as license fees, personal-property tax paid on inventory, Federal and local income taxes, real-estate taxes, and employers' contribution to social security and D. C. unemployment funds.
While these figures are presented in the light of their effect on the retail seller of alcoholic beverages, we all appreciate it is the consumer who pays the bill and the tax.
Unfortunately, the consumer's voice is not often heard. It is generally agreed that there are some 50,000,000 persons in the United States, who, to some degree, use intoxicating liquor.
I would assume, therefore, that in the District of Columbia, in proportion, some 300,000 consumers of alcoholic beverages are present..
It is upon them that this additional tax burden would fall. It was they who in 1946, as you know, in direct tax paid $2,697,000 to the District and an additional $775,000 in license fees, totaling $3,472,000.