Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-04-30
new FISCAL PLAN
IS UNFAIR TO D. c.,
VIEW OF MOORE
Continued from First Page,

fiscal system of the District. They
give the weight of their position and
authority 20 what. in many respects.
Is a new system which Congress is
asked to adopt without any such in
vestigation and hearing as should
precede such action.
The new fiscal plan that comes
from the conference includes certain
features which / do not care to dis
cuss at this time. One of these fea-
lures is a rigid requirement that. for
the next five years. the rate Of tax
on the market value of intangible
personal property shall be not less
than IL of per cent. instead OF $40
of per cent as at present. This may
be expedient or inexpedient, but the
new rate is put up to Congress with
out any detailed scrutiny of condi-
tons in the District or any estimate
OF the probability as to whether the
change would serve to increase or
decrease the revenue derived from
intangibles. The rate on intangibles
differs greatly in different commu-
mites. For example. there is one rate
in Maryland. another in Pennsylvania
and another in Virginia. and in speak
ing of this matter l. of course, have
in mind the fact that the rate now
proposed for the District is approxi-
mately that in effect in my own state.
Rate Higher in District.
But do not forget the further fact
that the local rate of interest in the
District is higher than in Virginia,
which affords an opportunity here to
makaa borrower add to an interest rate
OF or I per cent any tax rate on
'intangibles.
Another feature is the substitution
of the full value of real estate as the
basis of taxation for two-thirds value
as at present. This may be expedient
or ineXpedient, but ii is at least desir-
able that. If there is to be legislation
on the matter. some attention should
be given to the question of reducing
the rate on small holdings, and taxing
at a higher rate the increment in value
Of unimproved real estate.
! But the most unaccountable and
Objectionable feature is the require
ment that. during the next five years
taxation in the District shall not only
be sufficient to raise the 60 per cent
which the District contributes to the
total revenue and expenditure, as
against the 40 per cent contributed by
the government. but, in addition. "a
surplus fund sufficient to enable the
District to get upon 'cash-paying
basis by the end of the fiscal year
1927" The theory for this is that
while the annual contribution of the
District toward the common upkeep
Is roughly about fourteen million dol
lars. THIS is not aNdlldDle until toward
the end of the fiscal year, and, mean
while, all payments are made from
the federal treasury, so that the gov
eminent along during the fiscal year
really advances fourteen million dol
lars, for which the District is bound.
and that the only way to remedy the
burden to which the government Is
thus subjected. is to accumulate. dur
ing the f1ve-year period. fourteen mil
lions of dollars. which. at the end of
that period, will make possible the
payment of the common liabilities
from common resources.
Caused by Old Statute.
The present practice which this
theory criticises and condemns as a
hardship upon the government direct
ly resulted from the statute of 1878
and has been observed for more than
forty years. If there is any real
grievance of which the government is
entitled to complain. it should surely
not be corrected by forthwith adding
to the normal 60 per cent contribu-
ton paid BY the taxpayers of the Dis
trict an annual item of nearly three
millions of dollars for five years. 1t
goes without saying that such an adj
dition at any time. and especially at
such time as this, would be very
serious thing. To place fresh tax
liability of such large amount upon
lion people naturally causes them a
great deal of uneasiness and anxiety.
incidentally, it may be noticed that
against the proposed five-year sl4.-
030. 600 charge no credit is given the
District for a clear balance of S4.64S,-
000 which, in the period from June
80. 1916. to June 80. 1920. the District
paid into the federal Treasury over
and above the contribution it was
called on to make to the total revenue
and expenditures. AS I understand.
the existence of this balance is not
only undisputed, but has been ex
pressly recognized in communications
from the Treasury Department.
One Evil to Right Another.
IF it is inequitable for the govern
ment to, make advances as it has done
for more than generation. it would
nevertheless seem likewise wholly in
equitable to attempt to correct that
condition by exacting from the tax
payers of the District an eXtraordi-
nary fund of something like fourteen
million dollars. They would fare much
better by amending the present law.
so as to compel the payment of a
substantial part OF the local taxes.
say by November l or December /,
instead of permitting payment to be
Or they would fare much better by
the District being called on to pay the
government a fair rate of interest on
the government advances for the av-
erage period during which the gov
eminent lays out its funds, which
would probably be a period of six
months.
1T would obviously be much easier
for the District to make such annual
interest payment than to be required
to build up. during the next five years,
a surplus of $14.000,000 and then
logically required to go on increasing
this surplus to correspond with the
increase in the Districts proportion
of the increased appropriations which
will be made as time goes on. 1t Is
rather significant that the govern
ment pays no interest to the District
on its balance which is held in the
federal Treasury and would pay no
interest on the s14,000.000. or any
part of it, which 1t is proposed the
District shall pay into the Treasury
during the next five years as a sur
plus fund.
There are other features Of the
new fiscal plan which are open to
criticism, but it strikes me that the
one last mentioned is the outstand-
ing feature which deserves the most
careful consideration"
Fight on Tax Plan
r..