Footnotes:

(1) Arizona, California, Idaho, Louisiana, and New Mexico are community property
states in which 1⁄2 of community income is taxable to each spouse.

(2) California and New Jersey. Taxes are withheld from nonresidents only.
(3) Delaware. Federal income tax deduction is limited to $300 ($600 for joint return).
(4) Idaho. Each person (husband and wife filing jointly deemed one person) filing a
return pays an additional $10.00.

(5) Kansas. Federal income tax deduction is limited to the ratio of Kansas adjusted
gross income to Federal adjusted gross income.

(6) Massachusetts. Married filing separately, $2,000; married filing jointly, $2,000 plus
business income of spouse with smaller income or $4,000, whichever is less; additional
deduction of $500 for spouse whose income does not exceed $2,000. Combined tax and
surtax rate of 3.075% applies to all business income (including wages and salaries); interest
and dividends are taxed at a combined tax and surtax rate of 7.38%.

(7) Massachusetts. Federal income tax deduction is limited to Federal taxes paid on
professional or business income.

(8) New Jersey. Tax is levied on net income derived by New Jersey resident indi-
viduals in New York and on net income derived by New York resident individuals in
New Jersey. New Jersey rates, taxable income brackets, exemptions, etc., exactly com-
parable to those of New York.

(9) South Carolina. Federal income tax deduction is limited to $500.00.
(10) Tennessee. 6% on dividends and interest; 4% on dividends from corporations who
have 75% of their property taxable in State.

*Michigan, Ohio, and Pennsylvania have no state-levied personal income tax, however,
the tax is levied by several cities in each of the three states.

INDIVIDUAL INCOME TAX COMPARISON FOR FAMILY OF FOUR (STATES AND DISTRICT OF COLUMBIA, PRESENT AND PROPOSED)

Tax burden is calculated on the basis of state income tax provisions in effect as of

Jan. 1, 1966

*Median Tax Burden.

**Washington Metropolitan Area.

Sources: State and Local Taxes, Prentice-Hall, and State Tax Guide, Commerce Clearing House. Note.-The proposed D.C. income tax burdens indicate the effects of the proposed change in the D.C. Income tax bracket system incorporated in H. R. 11487.

State corporation net income tax rates (District of Columbia and States)

A minimum tax is imposed in the following states: California ($100); Connecticut ($30); Minnesota ($10); Montana ($10); Oregon ($10); Utah ($10); and Vermont ($25).

2 Connecticut: Rate is effective for income tax years beginning on or after January 1, 1966.

3 Connecticut, Massachusetts, New York, Rhode Island and Utah: Taxpayers must use a specified alternative method of tax computation if it yields a greater tax.

Hawaii: Rate is effective January 1, 1966.

5 Idaho: Corporation net income tax applies only to corporations not subject to the 6% state corporation franchise tax. Each corporation filing a return pays an additional tax of $10.

6 Louisiana: Tax is levied on net income in excess of a maximum credit of $3,000.

7 Maryland: Domestic corporations are allowed a credit for franchise tax payments in excess of $25. Minnesota: A tax of 1.8% is imposed in addition to the basic rate of 7.5% for taxable years beginning after December 1, 1958, and prior to January 1, 1967. The basic rate and the surtax are increased 10% from January 1, 1961 to December 31, 1966.

Oregon: Every corporation which is primarily engaged in manufacturing, processing or assembling materials into finished products for sale is granted an offset against the tax for personal property taxes paid on materials, goods in process, and finished goods produced for sale. The offset is not to exceed 334% of the excise tax. Rate on financial institutions is 8%

1 Wisconsin: Deduction of Federal income taxes limited to 10% of net income.

*States which permit the deduction of Federal income taxes generally limit such deduction to taxes paid on that part of income subject to the state's income tax.

Source: State Tar Guide, Commerce Clearing House.

EXHIBIT G

Estimated burden of major State and local taxes for a family of four owning a resi dence and an auto in the Washington Metropolitan Area for tax years 1966-1967 (based on toxes enacted as of June 22, 1966)

Footnotes:

Montgomery County -Reflects 1% local income tax and a 5% reduction in real estate tax rate for fiscal year 1967 (from $2.99 to $2.85-14¢ decrease).

2 Prince George's County-Reflects 11e increase in real estate tax rate for fiscal year 1967 (from $2.79 to $2.90).

Arlington County and Falls Church-Reflects 2% state sales tax and 1% local sales tax, both on an annual basis (effective date 9/1/66), real estate tax rate remains same as prior year ($3.87), Alexandria, Fairfax County and Fairfax City--Reflects 2% state sales tax (on an annual basis), and changes in real estate rates as follows: Alexandria-same as prior year.

Fairfax City-reduced from $4.75 to $3.38 ($1.37). Fairfax County-action on rates not completed. Alexandria is considering a 1% sales tax and Fairfax County is considering either an increased real estate rate or a 1% sales tax.

n.b. In developing the above tax comparisons, no attempt has been made to equate the level of public services provided in these jurisdictions or to indicate the adequacy of governmental services in each. PREPARED: June 22, 1966

Methodology for estimating the burden of major taxes in the Washington metropolitan area for fiscal year 1966 1

Tax burdens were calculated for a family of four owning a house and auto at four assumed income levels for each of the jurisdictions.

Income Tax: Four income levels were assumed. The appropriate exemptions, standard deduction, and income tax rates in each jurisdiction were applied to these incomes.

Real Estate: The market value of the house at each income level (in parentheses) was assumed to be: $12,500 ($5,000); $15,000 ($7,500); $20,000 ($10,000); and $30,000 ($15,000). The amount of tax shown reflects local property assessment levels and rates in each jurisdiction. Assessment level data for Arlington County, the District of Columbia, Fairfax County, Montgomery County, and Prince Georges County are from the U.S. Bureau of the Census, Census of Governments; 1962, Vol. II, "Taxable Property Values." Alexandria assessment level data are from the Urban Land Institute: "Northern Virginia Regional Fiscal Survey", June 1965. Fairfax City and Falls Church assessment level data are from the Virginia Department of Taxation: November 1962, "Real Estate Assessment Ratios and Average Effective True Tax Rates in Virginia Counties and Cities1956 and 1962."

Household furnishings are subject to personal property tax in Arlington and Fairfax County. Since taxpayers may report values of household furnishings or, in the case of Arlington County, use a formula basis for reporting value and since these are the only jurisdictions in the area which tax household furnishings, no assumption has been made as to the additional burden this tax would impose.

1 Sales Tax: The sales taxes shown are amounts computed by the Internal Revenue Service as reflecting acceptable average sales tax deductions for the size of family, income level, and jurisdictions in this report. Since the Virginia tax is new, the comparable figures for the states of Indiana and Iowa which have a similar 2% sales tax were used.

Auto Taxes and Fees: The data on auto taxes and fees include registration fees, gasoline tax, personal property tax, and other taxes and fees for a representative car. The data are taken from the Bureau of Public Roads' report "Road User and Property Taxes on Selected Motor Vehicles, 1964" and have been adjusted to include the local tag fee ($10 flat rate) for the Virginia jurisdictions and the current rates of $15.00 and $20.00 for Virginia state registration fees.