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District of Columbia Commuter Tax
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1562950
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District of Columbia Commuter Tax
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John O. Marsh Files (Ford Administration)
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The original documents are located in Box 12, folder "District of Columbia Commuter
Tax" of the John Marsh Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 12 of The John Marsh Files at the Gerald R. Ford Presidential Library
JUL 3 0 1976
Remarks of the President to the Maryland Delegation - July 26, 1976
"The Democratic platform suggests that the people that run the Federal
City have a right to tax Marylanders and who in Northern Virginia who
commute to the city and I think we have an obligation to speak out on
an issue. Now there's five counties in Maryland where most of the
population resides and two of those border the District and we would
hope and I'd be delighted if you would speak out on that issue, taxation
without representation does go on in other cities but those cities aren't
the Federal City. I'd appreciate your comments."
President - "I have never recommended it as President. I have listened
to the arguments on both sides. I think the fact that I have not proposed
it is indicative of my own personal feelings in this regard. Does that
take care of it?
"No sir, I'd like to know if you're for or against it?"
"Well, I think if I had to make the decision right now and a piece of
legislation before me, I'd veto it. 11
Bill Kendael-
what is name of
Relegate who as shoul
this Ques?
LIBRER
Gerald F. Holcomb
(see attached )
July 28, 1976
MEMORANDUM FOR:
MAX FRIEDERSDORF
FROM:
JACK MARSH
I think we better check on this matter involving the commuter
tax and the President's statement.
There was a very lengthy interview on Channel 5 with a Mary-
land delegate who was asked the question and who repeated what
the President said. We might want to get some of our people
to rerun this and take a look at it.
Many thanks.
JOM/dl
LISRANT GERALD ? FORD
362 Rus
(n) 032
Washing:
8th District
Elected 5/18/76
2nd District
Home adc
Elected 5/18/76
Route 5
Glebe Ho
Lawrence J. Hogan FURD
Easton, I
8400 Hillview Rd
Clyde T. Marshall FORD
Elected 1
Landover, Md 20786
5313 St Albans Way
(h) 785-1441
Baltimore, Md 21212
George Be
5th District
(h) 435-2586
Elected 5/18/76
Elected 6/5/76
112 Belem
Baltimore
Gerard F. Holcomb FURD
Senator Edward J. Mason
(o) 727-6,
(h) 433-51
751 Gleneagle Dr.
1904 Bedford St
7th Distric
Oxon Hills, Md 20022
Cumberland, Md 21502
Elected 5/
(h) 292-5027
(h) 722-6168
4th District
Elected 6/5/76
Elected 5/18/76
Senator Charles Mathia:
Helen W. Holden Reagan
460 Russell Bldg.
8310 Edgedale Rd
Washington, D C 20510
Baltimore, Md 21234
(Home address)
(h) 668-7221
R.F.D. # 2
2nd District
Frederick, Md. 21701
Elected 5/18/76
Elected 6/5/76
Coy
THE WHITE HOUSE
WASHINGTON
July 28
Mr. Marsh:
Max called re the D.C. commuter tax.
Domestic Council is OPPOSED. They recommend
a veot.
OMB is OPPOSED. They have a paper on its way
to Max outlining further their position. He will
get it to you asap.
Donna
EXECUTIVE OFFICE OF THE PRESIDENT
Ken Megrty
OFFICE OF MANAGEMENT AND BUDGET
July 28, 1976
WASHINGTON, D.C. 20503
DATE:
EPLY TO
TTN OF:
HVLD (Housing)
UBJECT:
D.C. "Commuter Tax"
Mr. O'Neill
Per your request, here is some background on previous
'Commuter Tax' proposals in the District.
Neither the Nixon nor Ford Administration has taken
previously a formal position--pro or con--on proposals
for a non-resident or reciprocal income tax in D.C.
The Home Rule Act (1973) prohibits D.C. from levying such
a tax. This was a provision added at the insistence of
local congressmen, which the Nixon Administration either
never focused on per se, or accepted as part of the
compromises necessary to passage of the Act. (Actually
the Nixon Administration, while voicing constant support
for D.C. representation in Congress, did not take a
position on many of the features of the Home Rule Act,
except those which affected Federal-D.C. finances,
explicitly. All other 'positions' were communicated
'at arm's length' through the Nelsen Commission work,
which preceded and precipitated the Home Rule Act.
The Nixon White House did not get actively involved
in drafting the bills.)
Prior to Home Rule, the Nixon Administration never took
a position on the spate of bills which prohibited a non-
resident income tax. The most volatile of these was a
Joel Broyhill proposal to deny D.C. its revenue sharing allot-
ment should such a tax be levied. Actually, I think
Congress has always included a prohibition--or removed a pro-
posal--in every D.C. Revenue Act from 1947 to 1973.
The closest either Administration has come to 'supporting'
the tax is the perhaps implied 'no objection' in President
Ford's transmittal of the FY 1977 D.C. budget and
President Nixon's transmittal of the FY 1972 D.C. budget.
Both were predicated on increased revenues whose sources
included a non-resident income tax. President Nixon,
in his transmittal, noted that congressional rejection of
the tax would require additional revenue from other
sources--and he suggested that they not be D.C.'s burden
alone (see Attachment A). President Ford said nothing in
his transmittal about D.C.'s proposal to fund $50M in
2
salary increases with a reciprocal income tax (see
Attachment B). We decided no such citation was necessary.
The present bill (H.R. 14621/H.R. 11579) introduced by
Rep. McKinney (R.-Conn.) was reported out of Subcommittee
June 29, as amended, with unanimous approval. The amendment
changed the tax rate. The House D.C. Committee is scheduled
to take it up August 9. The Administration's views have
been solicited only by McKinney himself (see Attachment C).
We took no position. No bill has been introduced in the
Senate.
him
Peter M. Fannon
Budget Examiner
DISTRICT OF COLUMBIA BUDGET
LETTER OF THE PRESIDENT
To the Congress of the United States:
I am transmitting to the Congress the budget for the District of
Columbia for therfiscal year beginning July 1, 1971.7
This budget presents the District government's plans and programs
to mcet the highest priority needs of the city. Consistent with the
objectives of the Reorganization Plan #3 of 1967, this budget is the
product of full, intensive deliberations by both the Mayor and the
City Council.
My roview of the proposed fiscal year 1972 District budget approved
by the District of Columbia Council indicates that its appropriation
requests do not provide for the full year costs of programs which have
been approved by the Council for partial year funding in fiscal year
1971. These costs were included in the Mayor's budget proposals
submitted to the City Council, but were climinated during Council
review.
Under the District budget approved by the Council, such impor-
tant programs as implementation of the new court reform legislation
and expansion of the Washington Technical Institute and Federal
City College are not funded after June 30, 1971. Furthermore, the
budget requests do not provide for the fiscal year 1972 costs of the
pay raises granted during fiscal year 1971 and which are currently
in effect.
In view of these omissions, the District budget approved by the
City Council does not present to the Congress a complete statement
of the budget requirements of the District for fiscal year 1972. I have
therefore modified the fiscal year 1972 District budget request to
include the full year costs-totalling approximately $31 million-of
programs and pay raises which have been or will be initiated in fiscal
year 1971 by supplemental appropriation requests. I feel this is clearly
the only fiscally responsible course of action and is in accord with the
budgetary practices and standards which have been established for
Federal agencies.
The proposed fiscal year 1972 District expenditure requests I am
transmitting today will require over $90 million from revenue sources
which are not now authorized. To help balance these D.C. budget
requests, I have requested a $27 million increase in the Federal con-
tribution to the city, and the Mayor has proposed over $53 million in
new local taxes which require Congressional approval. If these revenue
proposals prove to be unacceptable to the Congress, I do not believe
that the District's budget should be balanced solely by a slash in
expenditure requests. I am sure that a more suitable resolution of
issues can be arrived at through minor expenditure adjustments and
consideration of other revenue sources.
Last year the Congress completed appropriation action on the
District's annual budget request prior to enactment of supporting
D.C. revenue legislation. Because of the need to balance expenditure
requests with available revenues, the result of this Congressional timing
was that the D.C. appropriation requests were substantially reduced
because of the lack of needed revenues. This is neither an effective
nor an efficient way to review the city's fiscal requirements, and I
urge that the Congress act promptly on the D.C. revenue proposals
prior to the final appropriation action on the fiscal year 1972 D.C.
budget requests.
RICHARD NIXON.
APRIL 19, 1971.
Attachment B
To the Congress of the United States:
In accordance with the District of Columbia Self-Government and Govern-
mental Reorganization Act, I am today transmitting for your consideration
the budget of the District of Columbia for fiscal year 1977
GERALD R. FORD.
THE WHITE HOUSE, June 2, 1976.
FORD
Attachment C
MAY 5 1976
Honorable Stewart B. HcKinney
House of Representatives
Washington, D. C. 20515
Dear Mr. McKinney:
This is in reply to your letter to Director Lynn requesting
the Administration's views on H.R. 11579, a bill you intro-
duced which would impose a fixed-percentage tax on all in-
come earned in the District of Columbia by non-residents
and abolish the D.C. income tax on unincorporated businesses.
The non-resident tax provision of the bill would substantially
affect the District's revenue and hence the size of the Fed-
eral payment to the District. All the factors which affect
the District's revenues and expenditures, and the relation-
ship of each to the costs and benefits of the Federal presence
in the District and in the Washington metropolitan area,
require careful examination before a final judgment can be
made on this matter. In order to assist in this examination,
we have requested the views of other interested agencies.
After the necessary review and analyses have been completed,
we will be in a better position to respond to your inquiry.
Until that time, we are unable to express an Administration
position on the bill.
Sincerely,
(Signed) James M. Frey
James M. Frey
CC:
Assistant Director for
LRD Off'l file
Legislative Reference
LRD chron (Martin)
Mr. Fannon, CVA
Mr. Martin
Rm 7220
Mr. Kranowitz (2)
LRD:BMartin:bc 4-29-76
Rewritten:JMFrey:dje 5-3-76
MR 11579 - reptil favorably 6/29/76 by Firal Affer Subc. as MR14621
- Sched. in full House D.C. Committee 8/9/76
- no senate action