Evening star., 1922-03-03
Our Fiscal Relations Crisis.


proportionate contribution plan. have
been carried over to the Jones-Carra-
way bill and coupled with the indefi-
lite, f1uctuating contribution plan, find
the new union unnatural and abhor-
rent. Provisions that were sound and
wholesome coupled with the definite
proportionate contribution plan are
stultified and become worthless or
worse, when the plan is destroyed.
Take the fixed tax rate, for example.
As long as the national and local con-
tributions for capital upbuilding were
plan the tax rate could not be in
creased in the House by rider on an
appropriation bill without being SUBJ
ject to point of order. Since every
increase Of tax rate increased not
only District tax revenue, but the cor
tax-rate increase could not escape the
point Of order under the Holman law
But eliminate the definite proper
tionate contribution provision and
conditions are reversed and the tax
rate is unsettled. After the change
tax-rate increase no longer means that
the nation must pay more. but that it
pays less. for every additional dollar
of District tax revenue. and increase
Of tax rate can then be proposed as
natural. original provision of the
District appropriation hill in the
House and avoid the point of order
under the Holman law.
Thus the Carraway amendment
takes the tax rate from the position
of stability as substantive law which
It enjoyed under the original Jones
bill and renders it unstable, fiuctuat-
ing. subject readily to change on every
appropriation bill, in accordance with
shifting opinions concerning what IS
'"rea aSonable" local taxation.
Consider also the tax surplus held
IN trust for us in the Treasury. I'm
der the original Jones bill this surplus
was recognized as local revenue to be
applied at some time to the paymen.
OF the Districts share of municipal
expenditures under the definite pro-
portionate contribution system. But
when this system is cut out of our
fiscal relation law the surplus is aban-
doned and lost. To be sure, the Jones'
Carraway substitute authorizes the ap-
propriation Of the accumulated tax
SURPRISES as District revenue, thus
recognizing that the surpluses are Dis
trict revenue. But this recognition is
coupled with the provision which
dumps ell District revenue into the
Treasury as national miscellaneous
revenue" and cuts off all relation be-
tween this tax money and District
appropriations. So the Jones-Carra-
way provision merely resurrects the
tax surplus long enough to be recog-
nized as District revenue and then
buries it again in the Treasury as ma
tional miscellaneous revenue" The
District is favored with glimpse Of
Its long-iost surplus, recognized for a
moment as its own. and is then COM
PEELED to kiss it goodbye forever. The
general result is to make a delusion
and mockery Of our accumulated
tax surplus.
The avowed purpose of the Jones'
Carraway provision is to give the
District the benefit of a fixed, stable
tax rate. which cannot be changed on
an appropriation bill. Its effect, as
we have seen, is to render unstable
the stable tax rate of today; and
To-
tax rate not subject to change by
rider on an appropriation bill. it pro-
poses the new law as a rider on an
appr opriation bill, in violation of the
specific rule Of the Senate, and in re-
versal Of its traditional habit The Sem
ate has lectured the House many times
for attempting to legislate a change of
fiscal relations by rider on an appro-
priation bill, and now it is proposed
that the Senate shall reverse itself, not
only In respect to the definite proper.
tionate contribution principle, but in
respect to the method by which this
legislative change is to be effected.
When the contributions Of nstion
and capital community toward capital
upbuilding are related in definite ratio
every dollar Of taxation collected from
the District by our alien taxing body
(Congress) means the payment for cap
ital upbuilding by the government Of
another dollar {under the $3.50 ratiO)
or Of 662-3 cents (under the 60-40
ratio). and thns in taxing the District
the government correspondingly faxes
itself. This arrangement furnishes
clearly safeguard against excessive
and unjust taxation BY an alien taxing
body, and goes far to satisfy the spirit
Of our American principle, which, even
in the municipality, couples taxation
and representation and declares that
obligation follows power.
When there is no relation between
national and local tax contributions for
capital upbuilding. and when, as un-
der the present proposition, the alien
taxing body is to tax and appro-
pirate as it pleases every dollar
Of taxation exacted reduces the
amount which the government must
pay for capital upbuilding, the safe
guard against unjust and excessive
taxation is destroyed and the last YES
tige Of pretense that in spirit or in
substance there has been conformity
to the principle of self-taxation by
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