times worse than Congress will. And if they want it to catch outsiders who shop here, is that any way to treat the stranger within our gates?

We also think that if men had to do the family shopping, they would not think of raising revenue by this minutia but would ask you gentlemen to consider some of the following means for collecting the additional amount necessary for the District of Columbia budget:

A. To increase taxes on income-producing properties, especially those which had no rent ceilings during the war and have benefited by the war boom and are therefore, in general, well able to absorb a more equitable share of taxes.

Ten million dollars could be added to our revenue by making the District of Columbia property tax rate equal to that of San Francisco. Its rate is next to the lowest of any city in the 500,000 to 1,000,000 population group. Washington's rate is the lowest.

B. Since the Federal Government owns 18.66 percent of District of Columbia property, the present 10 percent of our expenses paid by the Federal Government should certainly be raised as advocated by Senators O'Mahoney and Overton.

C. We endorse the Commissioners' proposal broadening the base and increasing the yield of income tax and recommend rigid enforce

ment.

Mr. BATES. Mrs. Rands, it has been testified here by some of the witnesses that they felt that more than the majority of the people here favored the sales tax. What is your reaction, after the work you have put in on this matter? What has the reception been?

Mrs. RANDS. You have heard that sometimes the questions proposed by the Gallup poll are loaded, or asked in a certain way so that when the answer comes in it is what the person who made up the question wanted to get.

I think in some of those cases where people have reported that their organizations have gone on record as being in favor of the sales tax, I happen to know that in many of those cases it was not taken to the membership.

You did not get a grass-roots vote but what you got was a legislative committee or of the council or just the top ones. I refer to the particular organization.

Mr. BATES. Thank you, Mrs. Rands.

Mrs. RANDS. Thank you, Mr. Chairman.

Mr. BATES. We will listen to Mrs. Lichtenburg.

STATEMENT OF MRS. FRANCES LICHTENBURG, REPRESENTING LEAGUE OF WOMEN SHOPPERS AND THE MacARTHUR BOULEVARD CITIZENS' ASSOCIATION

Mrs. LICHTENBURG. My name is Mrs. Frances Lichtenburg. I have been asked to make presentations; one is my own and one is from the MacArthur Boulevard Citizens' Association. I am a member of that association also.

We desire to bring to the attention of this committee several resolutions passed by the MacArthur Boulevard Citizens' Association. At

the March meeting of the association the following motions were unanimously passed by the association [reading]:

Be it resolved, That the MacArthur Boulevard Citizens Association is opposed to a 2 percent retail sales tax for the District of Columbia; that we support an adequate income tax as proposed by the Commissioners with sufficient enforcement to guarantee payment by all subject to the tax; that we urge a larger Federal payment in return for the many services to the Federal Government now being supported by the present District taxpayers.

In addition at the April meeting the following notices were passed unanimously [reading]:

Be it resolved, That the MacArthur Boulevard Citizens' Association favor a recommendation to Congress that if the O'Mahoney-Overton formula is passed. the land occupied by the District Government be computed on the same percentage basis as that used by the Federal Government for tax computation; that the association petition Congress to reconsider the budgets for the Boards of Education and Recreation with a view to increasing the appropriations to meet the needs; that salaries of teachers be adjusted upwards and that teachers be paid during sick leave.

At present you know the teachers have to pay for their own sick leave.

We appreciate the opportunity of presenting before this committee the views of the citizenry residing in our section of the District.

The following testimony is presented by me for the Washington League of Women Shoppers.

Mr. BATES. Give us a little description of who they are.

Mrs. LICHTENBURG. It is a national organization with branches in nine cities across the country.

It was an organization started in 1935 to help the women understand the problems that come up between labor and consumers. That is, how does the living cost, how do fair working standards affect us and the things that we buy?

The national office is in New York City.

Although we are a group of housewives and not tax experts, we do not feel out of place at these hearings.

You will certainly agree with us that we are sort of "down to earth" economists, since we must manage our households to get the most benefit from our incomes.

Firstly, I wish to express the sentiments of our group that we believe taxation is a good investment. Stated more directly, we like to pay taxes if the tax money is wisely spent.

We believe it far more economical to pay a fair tax than to send our children to private schools, hire our own fire-fighting equipment, our own private watchmen and detectives, build our own roads, and many

et ceteras.

In our household budgets there are few items where we get such large returns on our "investment." At present, however, we are not getting the return that we had expected, particularly in regard to schools, street maintenance, and those individuals who need public assistance to keep them decent members of society.

This is a result chiefly of the city's growing pains. The population in the past 5 years has increased some 300,000 but there has been a tremendous drop in the number of income tax returns filed. We beg this committee to make a thorough investigation of why in 1939 there

should have been approximately 135,000 returns and in 1945, despite one-third again as large a population, there were only 80,000.

This committee and the entire Congressional body must be aware that these people are your and their constituents. While living here, they have enjoyed every municipal service that the District taxpayer receives, yet these constituents have defaulted their share of the

expenses.

We agree that H. R. 2282 should be revised-but the reciprocity should work in the other direction. The resident of 7 months or more who wishes to maintain his out-of-State voting privileges pay first his District tax and then if his home State has a higher rate he send the balance on. This is the down-to-earth old horse sense that applies in any realistic finance. Otherwise let that resident who pays his State tax elsewhere call his "home" State when his house is on fire. Let his children commute to dear old Middletown for their schooling.

The greatest defaulter in this respect is the Federal Government itself. Though it has taken more and more property away from the unexpandable District lands during the last 50 years, its burden of payment for the services it receives has decreased to a small fraction of the District budget.

We lost any form of self-government in 1878 in return for the promise that the Federal Government support half our budget. Then, as Senator Buck has himself so clearly stated, the Federal Government has not lived up to its statutory obligations; in 1925-38 it promised to pay 40 percent but actually during that 14-year period paid a total of $105,714.295 when $229,000,000 was due the District.

A difference of 123,000,000. Since then this obligation is even further from being met since the lump-sum arrangement makes the Federal payment about 12 percent of the budget.

As this committee is well aware other cities receive substantial payments from the Federal Government. In 1945 Detroit received $11,999,000, and Los Angeles $14,374,000 at a time when the District received six million.

These municipalities (and others) of course have elected representatives in Congress to see that their home town gets what is due it. We do not begrudge these payments, but only wonder why the District is a "step-child." It is unfortunate that the popular misconception is that the Federal payments to the District are charitable handouts; on the contrary, the evidence so ably presented by the Commissioners and the department heads on the Budget requirements that the District is pauperizing itself to maintain the high quality of service that property should be present in the Capital of our country.

We should like to have a Nation-wide poll after the true picture is explained on the District's burden for the Federal Government. We are willing to wager that the clear-thinking American public would be ashamed of the pittance now made in payment-just as the franchised soldiers overseas were when they discovered that their buddies from the District of Columbia could not vote.

The O'Mahoney formula is a good one in the large type, but when it is read more carefully, we realize how inadequate it is. If I were to hire a maid and promise to pay her at a certain hourly rate then in computing that payment, deduct for the time spent walking from

one room to another, walking up and downstairs, attending to her personal needs since she isn't actually working at these moments-though remember she cannot properly execute her work without these activities-you would say I was unjust. The Federal Government would do just that, pay taxes exclusive of the streets, the alleys, the sewers. The Federal Government, if it persists in neglecting its obligation is using the District as slave labor.

If the Overton-O'Mahoney formula was fairly rated it would find that the obligation is in the neighborhood of 20 to 25 million.

Remember that if the matter is realistically and truthfully faced there is no possible interpretation except that the sum is in return for the municipal services rendered.

The underlying American principle advocated by the Office of the Secretary of the Treasury and the Administration, in other words by the Federal Government itself, toward a proposed tax has been "that it should be based on ability to pay"-not "How can I get the other fellow to pay more than I do?" "I sell liquor, so let's tax the cigar store." Therefore we approve a realistically graded income tax, along the lines laid down by the Commissioners, and that this tax be levied on every resident of the District residing here for 7 months out of the year, that this tax be rigidly enforced. We recommend a Federal payment for services rendered to its buildings and to its employees. We would approve some raise on property tax, particularly on those income-producing properties that have not had rent controls. A license fee for businesses such as restaurants and hotels; that is relative to business capacity, not as it is now, a flat fee that is not even adequate to cover cost of city inspection.

Under no conditions would we support a sales tax. We believe with our own United States Government that the sales tax is not based on the ability to pay, that it deprives the small-income groups of a larger relative percent of their earnings than the larger income groups, that it is a regressive tax since it reduces purchasing power; and we would like to add that for the District in particular it would be a costly tax to administer because of the burden of educating the public, business, and tax-enforcement officers, auditors, and when all this is finally done, Washington is too small an area to justify the trouble. But as we said a short time back, it does not measure up to the American standard of a fair tax and therefore under no circumstances would we endorse it.

In conclusion, with the means above indicated, it is and always would be entirely unnecessary.

There is one point in the revenue proposals we have forgotten: How do we get the poor sucker from out of town? This is so embarrassing as to make one want to forget it.

If the citizens of this entire Nation have paid their Federal taxes and in turn the Federal Government pays its District taxes the city of Washington will be well and efficiently run and so beautiful that everyone who cares to may visit his Capital without fear that the local government is crouching ready to fleece him, much as a barker at a circus expounds the glories of his enterprise and then sends his pal the pickpocket through the crowd for a little extra.

To us, such an attitude is almost immoral. The tourist and the outof-towner spend money in our local businesses thus; the city gains from their visit as much as it may expect is its due.

Thank you very much.

Mr. BATES. Thank you very much.

Mr. BATES. Now we have Mrs. Geraldine Rhodes here.

STATEMENT OF MRS. GERALDINE RHODES, DISTRICT CHAPTER, NATIONAL ASSOCIATION OF COLORED WOMEN'S CLUBS, WASHINGTON, D. C.

Mrs. RHODES. I am Geraldine Rhodes, District Chapter of the National Association of Colored Women's Clubs.

We have 28 clubs, and 600 members in the District of Columbia. It is a national organization, with organizations throughout the country and Mexico.

Mr. BATES. What is the membership here?

Mrs. RHODES. It is 600 in the 28 clubs here, and the national headquarters is here at 114 O Street, Northwest.

We disapprove of the sales tax because it works an undue hardship on the lower-income group, in our group, but specifically because some of them receive their income in such small amounts, some weekly and some daily.

We feel that that group would have to do more shopping. If you want to buy one pair of hose, 35 cents this week, you could not buy three pair, and all of his money is spent in that way.

Then we figure with the carfare he has to pay, and you know the relief burden now is very heavy and they have cut relief on the very low income group.

Then we would have a time in trying to educate our people how to spend their money to the best advantage, their money is so small. Everything they have is spent, where in the high-income group only a portion of it is spent. A person making $200, $300, or $400 a month, he can buy in large quantities. You take a man who is making a small amount of money, all his money goes, but that is not true in the higherincome group. We feel again this would also inflate prices which are already inflated. As a group, we recommend this committee look into the cafeteria, the lunchroom, and the night-club situation in Washington, as far as tax is concerned. We understand that the tax on one is the same as others, and there I think that is unjust, because you take a joint where a person is not making very much, say $15, take a swanky night club, why, $15 for them is unfair. We think this committee should look into raising the higher revenue for the licenses and the like.

I thank you for the time, because I think everything has been recommended that you could do, but we do feel you should think of this lower-income group before putting a sales tax on the District of Columbia.

Mr. BATES. Thank you, Mrs. Rhodes.

Mrs. RHODES. Thank you, Mr. Chairman.

Mr. BATES. Mr. Lusk, are you ready to go on?