Evening star., 1922-07-08
Rate by Mail-Payable In Advance.
Maryland and Virginia.
All Other States,
The New Tax Rate Decision.

Though there was ground Tor IN
terpreting the new fiscal law as di.
recting them simply to raise the CASH
basis surplus of revenues by the 1st
of July. 1927, and not in equal annual
increments beyond current require
ments, the Commissioners have con-
strued it as mandatory in requiring
annual installments. They have. there
fore, proceeded to readjust the tax
rate for the new fiscal year, and have
decided that the rate of S1.30 on each
S10O of assessed value will yield
enough to meet the years appropria-
ton requirements and enough over
to give. in the same proportion, by
July 1, 1927, $4,000, 900 extra or surplus
revenue in hand.
In fixing this new rate the Commits
sioners had first to take into account
the fact that the law now requires
full-valuation assessment Of real prop
erty, tangible personally being still
thus valued as before. This neces-
sarily involved reduction of the
rate. To apply the old rate of s1.S2
would give return greatly in excess
of current and surplus-making needs.
Had it not been for the Interpretation
that the law required annual contribu-
tons to the cash-basis surplus the
Commissioners might have reduced the
rate to about $1.215. and secured
enough money to meet the appropria-
tion acquisitions for the year.
Again, in determining the new rate
the Commissioners concluded that the
law, though recognizing the possibil-
ity of the District possessing an
equity in its own cash in the Treas
ury, accumulated during several years
of inadequate appropriations by Con-
gress. did not justify them in taking
into account any part OF this fund as
a potential part of the cash-basis sur
plus. until the joint committee, which
is just about to begin its inquiry, has
made it's report and that report has
been accepted as a final judgment. 1t
may be urged. however, that a con-
trary view obtains even in Congress.
and that by many it is held that
Congress has recognized that there is
a possible contribution to the cash
basis surplus in the Districts equi-
ties in the existent surplus in the
Treasury.
AS the case stands. with the tax rate
fixed at a figure which will yield an
annual installment on the cash-basis
surplus, if the joint committee reports
and Congress agrees that the District
has title to any part Of its own tax
money which has been illegally al
lowed to accumulate in the Treasury,
to the extent of that equity the addi-
tional tax yield annually for the cash
basis requirement will be lessened.
Thus the lower rate and annual tax
return may come at another stage
of the five-year period, rather than
at the beginning. 1t must be assumed
that the District will get the benefit
of such a finding in terms OF imme-
diate release from heavier taxes, for
the law plainly contemplates the use
Of the Districts surplus for cash-basis
purposes.
BY thus Immediately increasing the
tax yield beyond current requirements
the Commissioners insure that $780,
900 Of District tax money will be held
in the Treasury Of the United States
for at least four and, part of it for
four and half years without use and
without interest, the United States
having the benefit of this money with
out paying for it. The interest On this
in the full period while the cash
Is waiting for employment in meeting
requirements under appropriation
laws will be approximately $4,000,
and a somewhat smaller sum in inter-
payers each year on the succeeding
-installments. At sthe lowest calcula-
ton in the course of the five years
while this sum Is being accumulated
the District taxpayers will lose $780,
/. 900 in interest on their money placed
T. In the federal depository while await
ing appropriation.
Having thus forced the raising Of
more taxes this year than the District
. now needs, in order that later it will
, be in position to meet acquisitions
for appropriations out of its own
funds, it must be assumed that Con.
gress will keep faith with the District
and will not regard the ability to
raise more than the current require
ments. even at the 60.40 ratio, as in
any manner justification for another
= change Of the ratio. Having compelled
q the advance Of the assessment from
two-thirds to full valuation. an addi-
ton Of one-half, the lowering Of the
rate was inevitable. The Commission.
ers have put it higher than the point
that they would have been justified
in considering a proper rate at the
present stage Of the cash-basis surplus
creation. 1t is, therefore, likely later
to be reduced, especially If and when
the present surplus is declared to be
q District asset. Such a reduction
should not be rated as evidence of
undertaxation and as warrant for a
further attack, perhaps, upon the ratio
now made permanent by substantive
legislation in the appropriation law.
A strike should be easily disposed of
|, In view of the fact that nobody is
willing to admit that he desires 1t.