Mr. HORNER. No, sir; I have not. I do not know about anything else, just this particular end of it. Our board of directors had a meeting while I was out of town. In view of the fact that I am chairman of the legislative committee, due to my long experience as a national association officer in the national organization, why, they asked me to present this case. Mr. BATES. Of course, then you are quite familiar with the Nationwide development of our highways and the reason for that? Mr. HORNER. Yes, sir. Mr. BATES. It always has been felt that if we had a better highway system we would be better able to reduce operating costs of automobiles and save a good deal of money to the automobile owner. I do not know, I do not recall myself, where those engaged in the automobile business—not gasoline, but particularly in the automobile business Mr. HORNER. The selling of new cars. Mr. BATES. And garages or users of automobiles, the drivers, the operators, the owners, have objected to an increase in the gasoline tax if it is a moderate increase, where it was all going to be used on the highways. We have had many complaints in other parts of the country where gasoline revenue has been used for general fund purposes other than highways. Mr. HORNER. Yes, sir; a lot of money is diverted in other parts of the country. Mr. BATES. That is not so in the District of Columbia. Mr. HORNER. That is correct. Mr. BATES. You think that the program they have already laid out for a period of years in the District is altogether too burdensome from the standpoint of Mr. HORNER. I am not qualified, sir, to say about the burdensome part of the program today. Mr. BATES. We are talking about the burden today. Mr. HORNER. I realize that. We are presenting this as our men look at it; they feel for the time being that there are enough taxes to take care of the improvements that the Highway Department can make. We feel that if next year there is an increase found to be necessary, why, that is another story. But at this time, for the time being, we feel that there is enough money coming in to take care of the work that will be done, and that they will be able to do. Mr. BATES. But you have not had a chance to study that program? Mr. HORNER. Personally, no. Mr. BATES. Upon whom have you relied for information of that kind? Mr. HORNER. Well, our own association has a manager and a board of directors. I am on the board of that association, and they had a meeting while I was out of town, and this is the result of that meeting. Mr. BATES. That is fine. Thank you, Mr. Horner. Mr. HORNER. Thank you very much. Mr. BATES. Is Mr. Heiser here? Mr. HEISER. Yes, sir. Mr. BATES. All right, Mr. Heiser. There is also a mistaken idea that the Federal Congress appropriates funds to the District for the maintenance and construction of the streets, highways, and bridges. Other than the aid authorized in the Federal Aid Highway Act of 1944, the highway users in the District of Columbia pay the entire cost of the streets, highways, and bridges in the District. Twenty-seven thousand men and women are employed by the automotive trades in the District of Columbia. Of the private industry employees in the District, 1 out of every 12 is engaged in some activity connected with the automotive trades. An increase in the gasoline tax would have an adverse effect on the economic welfare of these employees and their families. Not only is this true of these individuals and their families, but of all private enterprises in the city which depend upon the motor vehicle for conducting normal business functions. Motor transportation can move forward only when it is unhampered by burdensome and discriminatory taxes. Private industry in the Nation's capital is flourishing under the influence of automobiles and trucks. Motor vehicle registration is continually increasing, and more revenue is being received from the gasoline tax every month. There is every indication that this trend will continue for some time, and that the District of Columbia will receive more and more taxes from the highway users. For these many reasons, we consider it unwise to increase the gasoline tax, and further, that the request of the District government for the increase represents taxation without justification. We urge this committee to turn down this demand as unwarranted and unnecessary. Thank you, sir. Mr. BATES. You represent the garage owners, too, Mr. Horner? Mr. HORNER. No, sir; we are primarily new and used car dealersprimarily new cars, but all of us are saddled with used cars in connection with our new ones. Mr. BATES. Well, with the background of experience that you have had in that field, would you say that much of the repair work necessary on cars in the District is a direct result of congestion, bad streets, continuous stopping and starting of the automobiles by inexperienced drivers which had multiplied their costs of operation, where if they had continuous operation, better streets, underpasses, and so forth, the cost to them would be much less and would more than offset this increase in gas? Mr. HORNER. Mr. Chairman, I think that Mr. BATES. What is your reaction to that? Mr. HORNER. I think that the inexperienced operators of automobiles cause a lot of trouble regardless of where they operate. I do not think that the streets have anything to do with the number of accidents that are caused by inexperienced people. Mr. BATES. Well, they may have years of experience and still do not know how to drive a car; those were the types I had in mind. Mr. HORNER. Yes, sir; you will find that existing every day. Mr. BATES. Have you examined this program of the Highway Department? Mr. HORNER. No, sir; I have not. I do not know about anything else, just this particular end of it. Our board of directors had a meeting while I was out of town. In view of the fact that I am chairman of the legislative committee, due to my long experience as a national association officer in the national organization, why, they asked me to present this case. Mr. BATES. Of course, then you are quite familiar with the Nationwide development of our highways and the reason for that? Mr. HORNER. Yes, sir. Mr. BATES. It always has been felt that if we had a better highway system we would be better able to reduce operating costs of automobiles and save a good deal of money to the automobile owner. I do not know, I do not recall myself, where those engaged in the automobile business-not gasoline, but particularly in the automobile business Mr. HORNER. The selling of new cars. Mr. BATES. And garages or users of automobiles, the drivers, the operators, the owners, have objected to an increase in the gasoline tax if it is a moderate increase, where it was all going to be used on the highways. We have had many complaints in other parts of the country where gasoline revenue has been used for general fund purposes other than highways. Mr. HORNER. Yes, sir; a lot of money is diverted in other parts of the country. Mr. BATES. That is not so in the District of Columbia. Mr. HORNER. That is correct. Mr. BATES. You think that the program they have already laid out for a period of years in the District is altogether too burdensome from the standpoint of Mr. HORNER. I am not qualified, sir, to say about the burdensome part of the program today. Mr. BATES. We are talking about the burden today. Mr. HORNER. I realize that. We are presenting this as our men look at it; they feel for the time being that there are enough taxes to take care of the improvements that the Highway Department can make. We feel that if next year there is an increase found to be necessary, why, that is another story. But at this time, for the time being, we feel that there is enough money coming in to take care of the work that will be done, and that they will be able to do. Mr. BATES. But you have not had a chance to study that program? Mr. HORNER. Personally, no. Mr. BATES. Upon whom have you relied for information of that kind? Mr. HORNER. Well, our own association has a manager and a board of directors. I am on the board of that association, and they had a meeting while I was out of town, and this is the result of that meeting. Mr. BATES. That is fine. Thank you, Mr. Horner. Mr. HORNER. Thank you very much. Mr. BATES. Is Mr. Heiser here? Mr. HEISER. Yes, sir. Mr. BATES. All right, Mr. Heiser. (Letter from Stanley H. Horner later received for the record.) Senator HARRY P. CAIN, APRIL 15, 1947. United States Senate Committee on the District of Columbia, Senate Office Building, Washington, D. C. HONORABLE SIR: Enclosed you will find suggestions with respect to S. 843. It was our intention to appear before your committee at the hearings on this bill and we had made arrangements (although not through your committee) to be notified when the hearings took place, but, through inadvertence, notice was not received. Therefore, we hope that this letter and enclosure will serve to present our views. The purpose of the enclosed is to provide a compensating use tax on motor vehicles and trailers, to be collected upon each titling and retitling thereof in lieu of a sales tax. This proposal has a number of advantages, some of which are enumerated below: 1. Under the amendments the proposed tax on motor vehicles and trailers would be paid at the time of each titling and retitling and be a condition precedent thereto. This eliminates all question as to the actual receipt by the collector of taxes of all taxes due whether purchase was made within or without District of Columbia. 2. Maryland has had in effect for many years an excise tax similar to the one outlined in the amendment, except that in Maryland retitling of a motor vehicle or trailer is not subject to the tax. It was substituted for the original Maryland sales tax. It remains in force as a substitute for the newly enacted Maryland sales tax insofar as motor vehicles and trailers are concerned. This method of taxation has proven entirely satisfactory. 3. H. R. 2290 as now drawn places District of Columbia motor vehicle dealers at a disadvantage. It means that District of Columbia dealers cannot compete on an equal basis in the sale of motor vehicles or trainers to residents of Maryland and Virginia. A resident of Maryland would be required to pay a 2-percent tax to the District of Columbia at the time of the purchase of the motor vehicle or trailer and an additional 2-percent tax to the State of Maryland at the time of titling and registering the motor vehicle or trailer there. If the resident of Maryland purchased his motor vehicle or trailer in Maryland, only the Maryland tax would be payable. A resident of Virginia who purchased a motor vehicle or trailer in the District would be required to pay the sales tax, although he would not be required to pay any comparable tax if he purchased the motor vehicle or trailer in Virginia. Based on present prices, $37 on new vehicles and $14 on used vehicles would be the average tax. A large number of Maryland and Virginia residents have always purchased their motor vehicles from District of Columbia dealers. Aforementioned amounts of tax would, without doubt, eliminate such residents from making future purchases. Result will be that District of Columbia dealers, in order to retain this business, would establish branches in Maryland and/or Virginia. This not only imposes a financial hardship on the dealer but lessens the amount of income tax collectible by the District. 4. Motor vehicles and trailers are readily susceptible of this method of taxation because of the titling laws. No other type of merchandise may be handled in this fashion. The convenience, certainty, and rapidity of collection justifies making the distinction sought by the proposed amendments. If it is your desire, it would be a pleasure for the writer to appear before you and your committee to discuss it further. A copy of this letter is being sent to each member of the District Committee. Yours truly, WASHINGTON AUTOMOTIVE TRADE ASSOCIATION, Chairman, Legislative Committee. PROPOSED AMENDMENTS TO S. 843 (Submitted by the Washington Automotive Trade Association) Page 6: Between lines 22 and 23 insert the following subsection (6) of seetion 3: "(6) Motor vehicles and trailers, but the same shall be subject to the compensating use tax provided in title II hereof." Page 9: Section 5, strike out the sentence from line 14 through line 18, reading as follows: "The tax imposed by this title on motor vehicles and vehicles which are propelled or moved by motor vehicles shall be paid as a condition precedent to the issuance of certificates of title therefor and the issuance of identification tags." Page 29: Between lines 10 and 11 insert new subsection (i) of section 3: "(i) In respect to the use of motor vehicles or trailers unless and until the same are titled or retitled in the District." Page 29: Section 4, subsection (a) line 12, insert at the commencement of said section the following: "Except as provided in subsection (d) of this section, every vendor, etc." Page 30: Section 4, subsection (b) line 14 insert at the commencement of said subsection the following: "Except as provided in subsection (d) of this section, where the vendor, etc." Page 31: Between lines 3 and 4 insert the following subsection (d) of section 4: "(d) The tax imposed upon the use of motor vehicles and trailers shall not be collected by the vendor, but shall be paid by the purchaser to the Collector as a condition precedent to the issuance by the Director of Vehicles and Traffic of every certificate of title for any motor vehicle or trailer. Such payment shall be made at the time of the issuance of every certificate of title and upon such payment the purchaser shall be relieved by the necessity of filing any further return hereunder." Page 31: Section 5, strike out the sentence from line 16 through line 20 reading as follows: "The tax imposed by this title on motor vehicles and vehicles which are propelled or moved by motor vehicles shall be paid as a condition precedent to the issuance of certificates of title therefore and the issuance of identification tags." STATEMENT OF J. M. HEISER, PRESIDENT, FEDERATION OF BUSI NESS MEN'S ASSOCIATIONS, INC., WASHINGTON, D. C. Mr. HEISER. Mr. Chairman, my name is Joseph M. Heiser, and I am president of the Federation of Business Men's Association, Inc. With your permission, I would like to present as evidence a crosssection of the various signatures obtained from members of our organization. This does not, in any manner, sense or form, signify the entire amount that was to be turned in. Mr. BATES. What is this organization, Mr. Heiser, Federation of Business Men's Association? What is the membership, the total membership, and are many of these members of your organization also members of the board of trade, for example? Mr. HEISER. The Federation of Business Men's Association, Mr. Chairman, is comprised of 27 member bodies which are distributed over the entire area of the District of Columbia. The total membership in these various organizations is 4.284. As to the point relative to dual membership for the Washington Board of Trade, I might say that possibly 60 percent of our members may be members of the board of trade. It may not run quite that high, sir, but there is a considerable amount. I might say here that the difference in position that may be taken by the Washington Board of Trade and the Federation of Business Men's Associations of Washington is that in the federation we all vote on any question after the committee reports as to whether we will support or oppose any given subject. Does that answer your question, please, sir? Mr. BATES. What type of business is it? Small business, is it, that your federation particularly represents? Mr. HEISER. I would say by and large, yes, sir; a great majority would be the smaller businessman. |