1954. 1955. 1956 1957. 1958. 1959. 1960. 1961. 1962. 1963. 1964. 1965. 1966. 1967 1968. REAL ESTATE ASSESSED VALUE OF TAXABLE PROPERTY-TAX RATE, AND TAX, 1954-68 Source: Finance Office, DEPARTMENT OF GENERAL ADMINISTRATION, District of Columbia.-May 1968. MOTOR VEHICLE TAXES Mr. ABERNETHY. Can I follow with just one or two more questions? Now, what tax do you collect on automobiles other than the privilege license tax? Do you collect any at all? Mr. BACK. We have a motor vehicle excise tax on all new automobiles and all automobiles that are titled for the first time of 3 percent. Mr. ABERNETHY. Are they assessed annually? Mr. BACK. They are not. Mr. ABERNETHY. They are not? Mr. BACK. They are not. Mr. ABERNETHY. If I purchase my tags here, would it cost me anything to operate the automobile here other than the purchase of the tags? Mr. BACK. Not on the automobile itself. You pay gasoline tax, of course. Mr. ABERNETHY. I know that. I didn't ask about that. I buy a tag. What does the average automobile tag cost in the District of Columbia? Mr. BACK. The automobile tags are based upon weight. I believe it is up to 3,500 pound weight, it is $22.50 per year; and above 3,500 pounds of weight, it is $32.50 per year. Mr. ABERNETHY. Now, that is all you get out of an automobile? What does it cost in Maryland? Mr. BACK. Less. Mr. ABERNETHY. All right. Less than that? Mr. BACK. Yes, sir. Mr. ABERNETHY. What about Virginia? Mr. BACK. Virginia is much higher because they apply the personal property tax. Mr. ÅBERNETHY. How many jurisdictions in the country, if you know, personally assess the automobile? They do in my State. Mr. BACK. I do not have that figure with me. Many of them do not, and I don't recall the number. I could supply it, certainly. Mr. ABERNETHY. Don't you think that could supply a source of revenue? Mr. BACK. If I could explain one thing. Up until 1954, I believe, we did tax automobiles under a personal property tax law; and we also had a motor vehicle registration fee of some small amount. In 1954 the Congress changed the law and increased these fees to $22.50 and $32.50; and at that time, what they attempted to do was to get the same amount of tax on the automobile as if it was still being taxed on the personal property tax. Even today, I think that the law provides that as much as 64 percent of our motor vehicle registration fees go into the general fund as a personal property tax replacement; and the remainder goes into the highway fund as the replacement for what was a very low registration fee. MOTOR VEHICLE TAXES ESTIMATED YIELD OF A PERSONAL PROPERTY TAX ON MOTOR VEHICLES IN DISTRICT OF COLUMBIA It is estimated a personal property tax at $2.30 per $100 of assessed value on motor vehicles in the District in lieu of the present General Fund portion of motor vehicle registration fees (64%) would produce an additional $2 million. For estimating purposes, the current value of these vehicles was determined by applying the average of "Blue Book" values to a recent tabulation by the Department of Motor Vehicles, by weight and type category, of vehicles registered in the District of Columbia for the year ended December 31, 1967. This tabulation showed 216,004 registered "pleasure" vehicles and 23,230 in other categories of registration. Based on this calculation, the total yield from the imposition of a personal property tax at the 1969 rate of $2.30 per $100 of assessed value was $6.8 million, or $2 million more than the General Fund portion of motor vehicle registration fees estimated at $4.8 million for fiscal 1969. Finance Office, Department of General Administration, District of Columbia, May, 1968. EMPLOYEES OF THE DISTRICT GOVERNMENT Mr. ABERNETHY. What percentage of the employees of the District of Columbia, teachers, municipal employees, policemen, and otherwise, are living outside the District and paying no income tax to the District? Mr. BACK. I don't have an exact figure. As I recall this is a study that is made periodically by the District. As I recall the last study that I saw indicated that about 60 percent of the District employees live within the District of Columbia. I can't say that those are the latest figures. Mr. ABERNETHY. I know the District of Columbia Government is giving some consideration to the payroll tax for Federal employees. Of course, I don't think it has a chance to pass. Have they given any consideration to a payroll tax against those employees of the District Government itself who are not paying any tax at all in the District of Columbia? Mr. BACK. Not to my knowledge. Mr. ABERNETHY. Why don't they give some consideration, Mr. Hechinger? Mr. HECHINGER. Mr. Abernethy, would you repeat that? Do you mean just this payroll tax on the District of Columbia employees, not on Federal? Mr. ABERNETHY. Sure. You have thousands of employees that are making their living from the Government of the District of Columbia. who don't put one dime back into it, isn't that right? Mr. HECHINGER. Well, that, of course, applies to the same total group that you were saying where there is 42 percent of our wage earners are not paying taxes. Mr. ABERNETHY. I am speaking of people employed by the District Government. Mr. HECHINGER. I understand that, sir. Mr. ABERNETHY. Now, has any consideration been given to getting some kind of revenue from the people to whom you are issuing checks each month as employees of the District Government and who are not now paying anything back? Mr. HECHINGER. Exclusively to those as far as the Council is concerned, I don't know. Mr. Back would know historically whether it was true, but at this time there was no individual consideration of just the District of Columbia employees. There was, on a total basis of a small-a quarter percent tax over all those who worked in the District and lived outside. Mr. ABERNETHY. Would you think that the suggestion would be worthy of consideration by the Council and the Commissioner? Mr. HECHINGER. I am thinking off the top of my head as to why you would exclude or narrow to just those who work for the District of Columbia. Mr. ABERNETHY. And don't pay anything back. Mr. HECHINGER. How about those, sir, that work within the Federal Government or work for private industry? Are they not getting the same service? Mr. ABERNETHY. Yes, they are getting the same service, and those who are living here in the District are paying into the District. I am just asking you if you think this is worthy of consideration. Mr. HECHINGER. Certainly it is an interesting new thought, sir. Mr. ABERNETHY. Well, before we get through with this revenue hearing, could you come back and give us some views as to what you can produce in the way of taxes at various percentages of a payroll tax? Mr. HECHINGER. Just on District employees, sir? Mr. ABERNETHY. Yes. Mr. CHAIRMAN. I won't take any more time on that. (For the information requested as to D.C. government employees, see p. 129). SALES TAXES Mr. ABERNETHY. I have another item. What does the 1 percent sales tax on groceries produce? Mr. BACK. $3.3 million. Mr. ABERNETHY. $3.3 million. Now, why do you propose to eliminate it? Mr. HECHINGER. The purpose of eliminating that, sir, was food, of course, is the most basic product of life. Mr. ABERNETHY. Yes. Mr. HECHINGER, Therefore, a man, we will say, who earns $3,000 may be spending and I don't really know the figures-but may be spending up to $2,000, $1,500, or 50 percent, we will say, of his total income. Mr. ABERNETHY. Clothing is basic. Mr. HECHINGER. Clothing is basic, but food is an everyday expense, and it is a larger proportion of the man's total pay. Mr. ABERNETHY. Well, you know there is a lot of discussion with bleeding hearts about poverty in my State. We don't exempt anything from the sales tax. We have probably the most limited source of revenue of any State in the Union. We don't exempt anything from the sales tax. Nothing whatsoever. Everybody pays the same thing right across the board. This metropolitan area, with the high income that you have here, which is 3 or 4 times-well, I would say 2 or 3 times per capita of what mine is, why should you exempt anything? Why shouldn't you just collect across the board? Mr. HECHINGER. Your Honor, there are other things exempt. I don't know whether it is true in your State, but things like services are sometimes. Mr. ABERNETHY. Does Maryland have a sales tax? Mr. HECHINGER. Maryland has a sales tax. Mr. ABERNETHY. Do they exempt these items, also? Mr. ABERNETHY. Does Virginia? Mr. HECHINGER. NO. Mr. ABERNETHY. It does not. They have poor folks in Virginia, too, don't they? Mr. HECHINGER. They certainly do, sir. Mr. ABERNETHY. I wish to suggest that you give some consideration to eliminating these exemptions. My people are paying them, and it is a pretty good source of revenue. It is a fair source of revenue, and it is reasonable. That is all, Mr. Chairman. The CHAIRMAN. While you are on that subject, don't you think that making an exemption of this type we are inviting thousands of lowincome people to come to Washington and fill up the schools, and somebody has to pay that-and fill up the public welfare. This is a round robin here that we are enticing the poor people to come to Washington. Somebody has to pay for them. If we continually exempt them from everything, more and more will come in all the time. Mr. HECHINGER. Well, there probably may be more forceful reasons than the one percent. You talk about on two hands, one is that it is important to the man who is spending that much for food. It amounts to a small amount to make a man move to the District, I believe, sir. There may be other reasons in terms of why a person would move to Washington, but the fact is that if they are here, and there is a milk program and there is welfare, that to remove that tax on that basic thing, which represents so much of its budget, I doubt if anybody would move for that, sir. REVENUE LOSSES DUE TO CIVIL DISORDERS The CHAIRMAN. While you are on that subject, just about how much tax revenue do you think you have lost on account of this recent rioting and arson? Do you have any idea? Mr. HECHINGER. I don't know. Mr. FLETCHER. We have a preliminary figure at this time. We are completing it right now, but we estimate that we will lose about $3 million in revenue, both in Fiscal '68 and in Fiscal '69. That is a product both in the loss of assessment-we will have to reassess the destroyed property and loss of income on sales tax and so on. It is very difficult to estimate how much it is going to be, but Mr. Back's office has made an estimate, which I believe is slightly under $3 million. About $2.75 million. Mr. BACK. For two years. Mr. FLETCHER. Two years. That is Fiscal 1968 and Fiscal 1969. The CHAIRMAN. How many business establishments have been destroyed? Mr. FLETCHER. 909. An estimate is that 909 have had some element of destruction. The CHAIRMAN. That is all the facts you have available at this time? Mr. FLETCHER. Well, the 909 are not in terms of all that have been destroyed, but all had some element of damage. That could be 10 percent up to 100 percent. That is a preliminary estimate. We are now going through the complete estimate in much more detail-how many are actually totally destroyed, and the percentage of loss. Our estimate at the present time-the insurance claims that have been filed are about $19 million-insurance claims that have been filed at this time. The CHAIRMAN. How are we going to explain to these other business men why they should pay more taxes if they are not getting any protection? I don't know how to answer that question. They say that the police department watched the rioters loot and set their businesses afire without offering to stop them. Mr. FLETCHER. We think we are, sir. We think we are providing the best protection we have within our capabilities, sir. Mr. HORTON. Was that $3 million revenue loss for this year, or for two years? Mr. FLETCHER. Two years. Fiscal 1968 and Fiscal 1969. Mr. BACK. Our estimates are Fiscal 1968, $1.7 million, and for Fiscal 1969, $1.050 million. This is all taxes lost. (Subsequently, the following preliminary estimates were filed with the Committee; for more details thereof, see p. 134.) DISTRICT OF COLUMBIA GOVERNMENT EXECUTIVE OFFICE ESTIMATES OF COSTS TO THE DISTRICT OF COLUMBIA GOVERNMENT OF THE RECENT DISTURBANCES |