◆ SpookStack

Be ES fF ee ms & ¥ 7S = se 4 a ie coe a ne wm pari A, 0. .be two questions, it is easier . arrive at a reasonable answer to the latter, Clearly the imposition of retroactive income taxes on municipal employees for any period, whether it be three years or twelve, ia unjustifiable of his message was to secure future taxation of salaries and bond income, In view of the Port Authority decision and the reported attitude of the Bureau of Internal Revenue, however, it is quite possible that retroactive taxes may be levied in the event the Supreme Court refuses to rehear the Port Authority case and vacatea the stay granted on June 9 by Justice Roberts. In these circumstances, a mtually agreeable solution appears to lie in action taken in 1926 in quite similar circumstances, In 1925 the regu- lations of the Bureau of Internal Revenue were revised to limit exemption from federal income tax'to state employees engaged in the exercise of "essential govermental functions," The result was mch the same as has been created by the Port Authority decision-- many classes of state and municipal employees were regarded by the Treasury as taxable, both in the future and retroactively. Congress thereupon enacted Section 1211 of the Revenue Act of 1926, abating . liability of salaries received prior to that time by an officer or smployee of any atate or political aubdivision thereof, Preasage of a similar abatement statute by the next Congress therefore seema to be the logical and reasonable Bolution to the question of retroactive taxation, In contrast to this relatively simple solution, answering the other question-- whether future mnicipal salaries and bonda should be taxed-- is a pretty complicated task, Assuming that this question is answered affirmative determining just how it should be done is even more complicated, involving ae it does a decision as to whether euch taxation can be accomplished by statute, or whether 4 conatitutional amendment would be required. For municipal officials to treat as a vested right the present immunity from federal taxation of mnicipal saleries and bonds would be to adopt a position that is extremely hard to defend. Certainly there is no