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INCOME TAX FOR THE DISTRICT OF COLUMBIA

DECEMBER 15, 1931.—Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. MAPES, from the Select Committee on Fiscal Relations Between

the United States and the District of Columbia, submitted the following

REPORT

(To accompany H. R. 6821)

The Select Committee to Investigate the Fiscal Relations Between the United States and the District of Columbia report the bill (H. R. 5821) to provide for the taxation of incomes in the District of Columbia, to repeal certain provisions of law relating to the taxation of intangible personal property in the District of Columbia, and for other purposes, and recommend that it pass.

The committee believes that a tax upon incomes is the most equitable tax that can be imposed, because it is based on ability to pay and is a tax that is hard to evade. More and more this is recognized as evidenced by the increase in the number of taxing jurisdictions that have provided for a tax upon incomes.

The committee believes that if such a tax was imposed in the District of Columbia, as a substitute for the present millage tax on intangible property, it would result in greater equality in the distribution of the tax burden in the District and would produce a substantial amount of revenue in excess of that now obtained under the millage-tax system. Last year the District received a revenue of $2,725,941 from the tax imposed on all intangible property. It is our opinion that, if a reasonable income tax is adopted, the amount of revenue obtained therefrom will exceed the revenue from the tax now imposed on intangibles by not less than $750,000 annually, and as has already been said, the tax will be much more equitably distributed among the people.

An income tax would reach many people well able to pay some tax toward the support of government, who now pay no taxes, and it would reach the income derived from intangibles, which intangibles are now concealed from the taxing authorities of the District.

The committee, therefore, recommends the enactment of a law providing for a reasonable tax on income as 4 sụbstitute for the present millage tax on intangible property, and is reporting this bill to put this recommendation into effect.

For the purposes of comparison, the following table of income tax rates is appended:

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ESTATE TAX FOR THE DISTRICT OF COLUMBIA

DECEMBER 15, 1931.-Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. FREAR, from the Select Committee to Investigate Fiscal Rela

tions Between the United States and the District of Columbia, submitted the following

REPORT

[To accompany H. R. 5822]

The Select Committee to Investigate the Fiscal Relations Between the United States and the District of Columbia report the bill (H. R. 5822) to provide a tax on the transfers of estates of decedents, and recommend that it pass.

We find at the present time there is no inheritance or estate tax imposed in the District of Columbia, except the Federal estate tax. Forty-six of the forty-eight States impose either a tax on inheritance or estates, and the committee has agreed to recommend for passage an estate tax which in many respects is like the Federal estate tax and simple in its method of assessment and collection.

It has been ascertained that at reasonable rates, somewhat lower than the average of such taxes in the several States, the estate tax imposed by the District government would produce an annual revenue of not less than $750,000. There is no good reason why such a tax should not be provided in the District, especially as the Federal Government permits a credit of all inheritance taxes paid in the States or which may be paid in the District of Columbia up to 80 per cent of the Federal estate taxes.

We believe that the estate tax is preferable to the inheritance tax because of its simplicity. It has the advantage that the tax may be computed immediately after the value of the net taxable estate is determined. This results in a material saving in time and expense, both to the estate and to the government that imposes the tax. Furthermore, it is easy for the testator to determine in advance the

total tax burden upon the estate, and therefore, he can carry out exactly his intentions as to the net amount which the several beneficiaries are to receive.

The estate tax is not a tax on enterprise but is a tax on the accident of birth and the return to the government at the conclusion of one's life of a reasonable share of accumulated wealth permitted by the laws under which we live.

The estate tax has the advantage of simplicity and relative speed with which estates may be settled. We therefore recommend that the bill herewith, providing for reasonable tax upon the estates of decedents within the District of Columbia, be enacted into law.

GASOLINE TAX FOR THE DISTRICT OF COLUMBIA

DECEMBER 15, 1931.-Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. Davis, from the Select Committee to Investigate Fiscal Relations

Between the United States and the District of Columbia, submitted the following

REPORT

(To accompany H. R. 5823]

The Select Committee on the Fiscal Relations Between the United States and the District of Columbia report the bill (H. R. 5823) to increase the motor-vehicle fuel tax in the District of Columbia, and to provide for the better administration thereof, and recommend that

it pass.

The gasoline tax has become generally recognized as one of the simplest, fairest, and most effective forms of taxation.

In 1919 the State of Oregon imposed a new tax in the form of a 1-cent-per-gallon levy on gasoline. Almost immediately other States adopted this form of taxation, and to-day every State in the United States levies a tax upon gasoline. These taxes have been generally and gradually raised.

From every point of view the gasoline levy has proved as popular as a tax can ever be expected to be. It has been generally accepted by the motorists themselves as a proper tax for raising funds to construct and maintain highways. It has the merit that the motorist pays the tax only to the extent that he uses the highways. It is easy of collection and inexpensive of administration. While the amount of tax per unit is not large, yet the total gasoline tax collected in the United States during the year 1930 reached the enormous figure of $494,683,410.

For eight years the District of Columbia has been imposing an excise tax of 2 cents a gallon on gasoline. There was derived last year from this tax approximately $1,500,000. There are only four

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