as National Airport is to a very large extent, would service the Federal Government establishments.

Senator HOLLAND. You think that the National Airport exists to a large extent to service the National Government?

Mr. PRESS. I do, sir.

WASHINGTON TAX RATES

Senator HOLLAND. Speaking of the tax rates here in Washington, could you name any other city of this size where the tax rate is as small as it is here?

Mr. PRESS. I would be glad to submit figures to you.
Senator HOLLAND. Could you name them?

Mr. PRESS. I do not have them with me.

Senator HOLLAND. You stated that Washington property was paying more taxes and I thought you might give us an illustration. Mr. PRESS. Unfortunately, Senator, I was called over here when Mr. Somerville could not get here and I came from the inaugural committee and I have nothing with me except this piece of paper.

Senator HOLLAND. You mentioned that the chairman of this committee served at one time on the District of Columbia Committee. At that time a comparison of tax rates showed that the property tax rates here were not commensurate with those that were being paid elsewhere and showed, likewise, for such things as gasoline taxes. There was great resistance here to stepping up the gas tax to rates comparable with those in Virginia and Maryland. A committee of the board of trade appeared before our committee to oppose it and was resistant to stepping up liquor taxes to make them commensurate with those in Maryland and to make them equal with the situation in Virginia, where, of course, the handling of liquor is on a different basis. Our committee at that time felt that the attitude of the property owners here was not to seek equality with those elsewhere, but to preserve a preferred status as compared with property owners in other cities of comparable size.

If you have illustrations that would indicate the contrary with reference to the property tax rate, with reference to the liquor taxes, with reference to the gas taxes, or other fields that you think are appropriate, I will be glad to have you submit them for the record.

Mr. PRESS. Mr. Chairman, we would be very happy to submit such information. Meanwhile, may I say that since you served on the District of Columbia Committee the gas tax has been raised. It is now the same as in Maryland and Virginia. The Washington Board of Trade supported the increase.

Senator HOLLAND. The Washington Board of Trade resisted the increase so long as they thought there was any chance of defeating it, and resisted it very vigorously in my presence, and likewise, the same thing happened with reference to the liquor tax and with reference to other items which I could go on and name.

If you will submit anything that you have on that, we will be pleased.

Mr. PRESS. Yes, sir.

(The information referred to follows:)

Hon. SPESSARD L. HOLLAND,
Senate Appropriations Committee,

WASHINGTON BOARD OF TRADE, Washington, D. C., January 23, 1957.

United States Senate, Washington 25, D. C.

DEAR SENATOR HOLLAND: Pursuant to the discussion respecting the ability of the District of Columbia to participate in the cost of construction of the proposed Burke Airport during my appearance before the committee on January 17, we submit the following material in support of our position that the District of Columbia has neither the funds nor the potentialities for providing the funds which would be required for such purposes.

Total appropriations for both capital outlay and maintenance of the District of Columbia have skyrocketed in recent years from $96.4 million in 1948 to $198.3 million in 1957. The President has transmitted to the Congress for consideration 1958 estimates totaling $206.8 million.

To provide the funds to meet these budgets Congress, generally with the support of the local community, has enacted virtually every type of taxation employed in all other jurisdictions throughout the United States. Exhibit A, attached, lists taxes employed in the States and indicates those which are applicable in the District and the degree to which they are applicable in the 48 States. It should be noted that District of Columbia residents, business and professional institutions are subject to every form of tax used in any of the States except a severance production tax (which would not be applicable) the chain-store tax, the admissions tax, the stock-transfer tax and oleomargarine tax.

While there are imposed upon the District all of the taxes producing substantial revenues the same does not hold true in many of the States. For example, 15 States do not impose corporate or personal income taxes; 14 States do not impose sales or use taxes; 4 states do not impose a cigarette tax.

The personal tax on household goods was recently repealed by Congress for the District of Columbia. However, all personal property, including stocks in trade of business and professional institutions, are subject to a tax of $2 per $100 of valuation (100 percent assessment). This levy imposes substantial hardships on many business houses which do not exist generally in many States. In the District there is imposed a sewer service charge which is not generally applicable throughout the country since it is limited to a few large cities. Insofar as the District of Columbia is concerned it is critically important that taxes generally do not significantly exceed those which are levied in Maryland and Virginia which are highly competitive jurisdictions seeking to attract employment serving the District of Columbia. Currently the District personalincome tax is generally more severe in its application than the tax levied in Maryland and for some income levels it is more severe than that levied in Virginia.

The corporate-income tax is the same, 5 percent, in all three jurisdictions but the administration of its applicability in the District of Columbia is clearly more severe than it is in either of the neighboring jurisdictions as shown by the fact that a number of national corporations have removed branch offices from the District in order to take advantage of less stringent administration in the surrounding states.

The District also levies a 5 percent tax on net earnings of unincorporated businesses and that is not true in either Maryland or Virginia.

A number of studies conducted in recent years clearly demonstrates that irrespective of the rate of taxation and the ratio of assessments real-estate taxes in the District of Columbia on comparable properties are higher than they are in Virginia jurisdictions within the metropolitan area. Similarly, in Maryland there are many areas having lower effective real estate tax collections than comparable properties in the District of Columbia. There are some areas in nearby Maryland where the tax is a little higher, principally in Montgomery County.

The gasoline tax rate is the same in Maryland, Virginia, and the District of Columbia.

The Washington Board of Trade staff has carefully studied every compilation of comparative tax rates in Washington and cities of similar size which have been turned out by Federal Government departments and others for many years most of which purport to show District of Columbia taxpayers in a preferred position. We respectfully submit that neither the tables referred to nor any

others which we have seen fairly reflect the burdens of any of the communities included for the following reasons.

1. All of these comparative tax burden studies purport to show the average per capita tax on the residents of the jurisdictions being studied as of a given date. In making the comparisons it is customary to assign to the cities being compared a certain portion of county, school district and State costs to make them comparable with the combined city, county, and State area in the District of Columbia.

The per capita figure is normally taken from the last decennial census; the total revenue figure is normally taken from the reports of the last complete year. This obviously results in some errors when computing per capita costs, particularly in the case of those communities which have had significant population gains or losses during the period between the last census and the last fiscal report.

We submit that this simple technique of dividing total revenues by population does not correctly reflect the effect of tax loads on residents for still another very important reason. It is fallacious to assume that the State revenues allocated for the purposes of making a comparable table constitute a load on the residents of the community being examined. Many of the States levy many taxes which are not available to the District of Columbia. Some of the States receive large revenues through taxes on natural resources such as oil, gas and the like, which are in fact not a burden on the residents of the State but which are collected from the users of such commodities in many other States of the Union.

The per capita figures, furthermore, do not reflect tax loads on the residents of these communities, particularly when they are compared to the District of Columbia, because a very substantial portion of the revenues entering into the per capita compilation are actually taxes on business, particularly manufac turers and distributors whose profits and properties are the result of sales made throughout the length and breadth of this land and in many cases throughout the world.

Striking testimony to the magnitude of such sums may be gleaned from exhibit B recently prepared by our Research Department, and here submitted. This exhibit presents data gathered from 22 national companies having total payrolls exceeding $4.3 billion last year. It shows that these corporations, many of which are doing business in every State of the Union-in large cities, small towns and rural areas, the latter having low revenues requirements, paid on the average during their last fiscal year $1 in State, county and municipal taxes for every $19 of payroll. This figure corresponds very closely with a more limited sample reviewed 3 years ago before these same committees at District fiscal hearings when the ratio was $1 in State, county, and local taxes for every $20 of payroll. Obviously, the taxes paid by a large manufacturer included in this sample cannot fairly be included in determining effective average tax loads on the residents of the cities being compared.

The striking fact actually to be learned from exhibit B is that there is a well demonstrated and documented responsibility by employers to subscribe an important portion of the revenues needed to maintain and develop the communities in which they are located. The companies studied and in fact all responsible business organizations or employers recognize this responsibility to their communities. Furthermore, most successful and subtantial employer play a leading part in developing and maintaining the highest possible standards of municipal operation in the communities in which they have substantial investments and employ many people, hence they are quite often the principal advocates of increased municipal expenditures.

We submit that the United States Government has the same responsibility to this community. The Federal Government is the basic employer in Washing ton, providing approximately 40 percent of all the jobs in the District of Columbia. Were the United States to accept financial responsibility demonstrated by the records of other large employers, their annual payment to the District of Columbia would approach $50 million. This figure is strikingly similar to what would be paid if the United States paid in local taxes going rates on its real property and the average additional rate paid by local business. We sincerely trust that the committee will feel that the data submitted herewith supports our conclusion that the District of Columbia Government is and will be unable to participate in the financing of an additional airport unless its principal employer, the United States Government, increases its annual

payment to the District to more nearly reflect its responsibility to this community.

We will be very happy to submit additional detailed information if the
Committee so desires.
Respectfully,

WILLIAM H. PRESS.

EXHIBIT A

LIST OF TAXES AND STATES IN WHICH THEY APPLY

Initial fees and taxes.—For organization or qualification of corporation, domestic and foreign; all States and District of Columbia.

Franchise taxes.-Annual taxes imposed for the privilege of doing business, District of Columbia and all States, except Vermont.

Corporate income taxes.-Taxes measured by net income of incorporation. District of Columbia and 33 States; District of Columbia rate is above average of the 33 States.

Personal income.-Income taxes on persons, fiduciaries estates and trusts. District of Columbia and 33 States; 12 cities have payroll tax at rates running from 1 percent to 11⁄2 percent.

Banks, financial companies.-Special taxes imposed on banks and financial insitutions. District of Columbia and all States except Washington.

Property taxes.-Taxes on real and personal property and intangibles, public utilities. District of Columbia and all States have real-estate taxes and one or more of other varieties.

Licenses, miscellaneous.-General licensing provisions and excise taxes; 41 States have taxes of this type, parimutual taxes mostly, tax on oleomargarine second with a few taxing soft drinks, playing cards, etc. District of Columbia has not tax of this nature but does require license fees for every type of business and profession.

Alcoholic beverages.-Excise taxes on sale of alcoholic beverages, license and permit fees. District of Columbia and all States have such taxes.

Gasoline and motor fuels.-Applicable in District of Columbia and all the States, District of Columbia rate 6 cents per gallon; lowest in Missouri 3 cents; highest 7 cents in 10 States.

Severance production.-Taxes imposed on severance of natural resources from the soil; 28 States have taxes of this nature. Taxes on oil and gas production predominate. Mining and forest products make up the rest.

Motor vehicles.-Registration fees and special taxes imposed on motor vehicles and motor carriers. District of Columbia, all the States and New York City (motor vehicle use tax).

Chain stores.-Multiple store taxes, 15 States.

Cigarettes, tobacco.-Tax on cigarettes, cigars and tobacco products. District of Columbia and 44 States and New York City have some type of this form of tax. States having none: California, North Carolina, Oregon, Virginia.

Stock transfer document recording taxes.-15 States.

Sales use, gross receipts.-District of Columbia and 34 States have sales and use taxes; 7 others have taxes covering such items as merchants license, meals excise, admissions, etc. Some individual cities levy additional taxes of approximately 1 percent.

Public utilities.-All special taxes on utilities. District of Columbia and 45 States (Georgia, Indiana and New Hampshire not included).

Insurance companies.-Taxes on gross premiums. District of Columbia and all States.

Inheritance, estate and gift taxes.-District of Columbia and all States except Nevada have one or more taxes of this character; 10 States have only estate tax or inheritance tax. All others and District of Columbia have both.