Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-11-08
WHY BE AN OSTRICH
AND FOOL YOURSELF?

NssossoTs sNo COUNCIL seem 10 Dc
Following the ornithoiosieai Preee-
dent BY Planning to Keep the
Old Tax Rate While They
Raise Assessments
l. assessed valuation Of real estate now
making before the Board Of Revision Of
Taxes 10 likely to increase in volume before
1t decreases.
The taxable value Of real property in the
city has been increased by $3.50, 900. 0 over
last year. bringing the total taxable value
of all property up to 81, 054, 800, 900. Never
before was 80 large an increase in valuation
made in n single year. In 1915 the increase
was SJ2 ,0O0. 900 over 1914. In 1915
S25. 900. 600 was added to the taxable value,
and in 1917 the addition amounted to $780,
900. 900.
These increases came about through the
normal growth of the city. From 5000 to
1000 new buildings were erected every year
before the United States entered the war.
At an average value of $4,000 for each house
this amounted to the creation of from
S23. 900 900 to S35 900, 600 of new taxable
nIoperty every twelve months.
Building is at n standstill and has been
for twelve or eighteen months. Yet the
assessors, with a small amount of new taxa
bic property created, lave added to the
taxable value of real estate three times as
much as II added In a year when the build
ing of houses was going on at the usual rate
and when two or three great business build
ings were completed.
The increase this year is brought about
by the scaling up of the taxable value of old
houses. How this was done has been ex-
planned by Simon Gratz. president of the
Board of Revision of Taxes. lie says that
many houses have changed hands during the
last year and that the prices paid have been
used ms the basis of the new assessments.
II Il house in Il row sold for 5000. he eX-
plains. then it was logical that the other
houses in the same row were worth the
same amount. and the assessors acted on
that assumption.
Rut Mr.. 'Gratz forgcts or ignores the fact
that the man who paid $1,000 for n house
which, under normal conditions. was worth
$4,000 or $500. did SO not because the
house was worth $4,000. but because he had
to have u place In which to live. He was
n victim of a profiteer. In a year or two
the market value Of the house will fall 80
that the buyer will find it Impossible to get
back the money he paid for il. The pur-
chaser was pcnalized by the p%rofitccr and
now the assessors are penalizing him still
further by increasing the amount of his
tax bill.
Under the law the assessments must be
based on the amount which the property
would bring when offered for sale. In prac-
ticc the amount has been an estimate of
what the property would sell for when the
a,..ox ,.a. f,,,nI 10 lignnSn Of ~ IhOf 10
the full value of real estate for taxation
purposes has been the price which the seller
could get for It when he put it on the mar
ket. and not the price which a buyer scour-
ing the city for a place in which to shelter
his family would. in his extremity. consent
to pay for q piece of property which the
owner was not anxious to sell.
The assessors have based their valuations
this year on the buyers price in abnormal
circumstances. And they have not only put
such n valuation on the property that has
been sold. but they have also put 1t On
property that Is still occupied by the People
who have owned it two, three or five years,
who, II they wished to sell, would be glad
to get the price they paid for the property
in the first place.
There are some exceptions, for in certain
districts there has been a legitimate increase
III value W All Ttu VSNu''' W." w
anert from the war and apart from the
high cost Of building material and with no
relation to the depreciation in the value OF
the dollar.
When the dollar RECEIVERS it's old value,
the value Of property in those districts will
remain higher than it was three or four
years ago.
Rut in the vast majority of cases in
which the assessment has been raised there
is no excuse for il save the artificial prices
fixed by the greed Of profteers and the TEN
porary necessities of men seeking a place in
which to live from which a landlord could
not GUST them.
II NAV be argued that the increase had
IN be made in order to prevent an increase
in the tax rate. But what difference does
II make whether a man pays 800 a year
taxes at the old rate on an increased assess
nant of his house or whether the old rate
of assessment remains unchanged and he
NAYS n tax bill Of 500 arrived at because
~ nm ipcrcase in the rate of taxation? An
;rcroos AZ in the assessment in order to pre-
Won't nm increase in the tax rate IL the shall
lowest kind of subtrrfuge, unworthy OF the
~.iIIicst ostrich that ever buried itS head in
tho sond under the illusion that 1t was
making itself invisible.
The financial sections of the charter are
based on the theory that the tax rate IL a
flexible quantity dependent on the relation
If the amount Of money to be raised to the
value Of the property on which the tax Is TO
be levied. The computation OF the rate Is a
problem in percentage in which the assessed
value of all property Is the principal or paSe,
the slm TO be raised IS the percentage ana
.ho rate per cent Is found by dividing the
norcentsxe BY the base. The duty of the
rouncil under the charter is to fix the per
oontage-that is, the amount to be raised
for city purposes-and then to compute the
rate pcr cent, or the tax rate, in the usual
way. .ho