Evening star., 1923-01-29
District Surplus No Myth. But
Concrete Fact
Existence Demonstrated by District, Often implicitly
Recognized by Congress, Now Confirmed
by Controller General.
BY THEODORE W. MOVES.


the Districts tax surplus demon-
strates its concrete existence and the
definite obligation, legal and equita-
BILE, attached to it.
1t ought to be easy to ascertain
whether concrete something like a
tax surplus does or does not exist
What is the tax out of which the
alleged surplus arises? BY what au-
thority is the tax imposed? From
whom and in what amount is the tax
authorized to be collected? For what
purpose does the law command that
the tax shall be expended? To create
surplus, it must appear that a
greater amount of tax was collected
in a given year than the law author
ized. or that not all of the taxes col
lected in a given year for a legally
specified purpose was expended for
that purpose.
These pertinent questions are all
answered by the clear, unambiguous
provisions of the organic act of 1878.
That law directs the District Com
missioners to submit estimates of the
Districts needs through the Secretary
of the Treasury to Congress. 1t then
says:
ITO the extent to which Congress
shall approve of said estimates, Con-
greSs shall appropriate the amount
of 80 per cent thereof. and the remain
ing so per centum OF such approved
estimates shall he levied and assessed
upon the taxable property and privi-
le ges in said District other than the
property of the United states and of
! . he. Yrfa ~ -, ,I.i.
Surplus n Fact. Not "a Myth.
/. Who, then, imposes the tax? Con-
Sress
.. Upon whom or what is it levied
and assessed? Upon the taxable prop
erty and privileges in said District
other than the property of the United
States and of the District of Colum-
bia.
3. What amount of tax is authorized?
An amount equal to one-half OF the
District estimates approved by .Con-
gress for a given year; an amount eX-
actly the same as the amount direct ed
by the law to be appropriated by Con-
gresS from the national Treasury for
District purposes.
T. What is the sole purpose of the
tax. for which 1t must be expended?
To enable the District to pay half of
the District appropriations: that is.
one-half of the District estimates as
approved and enacted into law by
Congress.
How Surplus Is Created.
The law assumes that only the pre-
else amount of one-half of "A fixed
sum, previously determined, shall be
levied and assessed upon District
property. But In practice the amount
of tax collected has never been pre-
cisely the amount ordered by the law
to be levied and assessed, and Con-
gress by supplementary tax leGisla-
tion fixing a definite tax rate and an
arbitrary minimum standard of as
sessment made certain that there
should always be either a deficit or a
surplus under the law.
Thus in some years taxation pro-
duced more than one-half OF the
amount appropriated by the District
appropriation bill, in other years less.
The joint fiscal committee of 1915
found and declared. however, that
during the years since 1873, viewed as
Il whole, these deficits and Surpluses
offset one another, and that thus by
design and not by accident the half
and-half law had been recognized and
subs tantially enforced. The congress
sional joint committee thus itself eX-
posed and denounced the fiction that
the half-and-half law is fiction.
Uncle Sam Recognizes and Collects
Deficits.
In the years since 1873. in which
Uncle Sam wanted to eXpend in wise
permanent public improvements at
the capital much more than twice the
amount that he had collected that
year in local taxes, he took note of
the temporary deficit in District
revenue under the law. He advanced d
from the Treasury to the District ap-
proXtmately the amount of these
deficits and reimbursed himself for
these advances with interest from the
District revenues of subsequent years.
Such deficits occurred (and were met
by money borrowed by the District
from Uncle Sam, and later repaid
with interest) in 1901, 1902, 1905, 1906.
1907, 1905 and 1909. On account of
these advances to meet deficits the
District paid to the United States
s3.992,515.03 in principal and $685.
076.76 in interest. In 1916 the last
of these advances was repaid.
OF recent years (since 1870, and
especially during the war time, the
process has been reversed and sur
pluses instead of deficits have ac-
cumulated. Uncle Sam has each year
(1916, 1917, 1918, 1919 and 1920 spent
less than twice the local tax which
he has collected for capital mainte-
nance and development. During the
war he has needed his money for
other and more urgent purposes. The
world war had to be won, and in this
period the capitals growing munich
pal needs were comparatively neg
lected Instead of deficits unex-
pended surpluses of local taxes thus
developed and accumulated. And the
municipal needs which the taxes were
collected to meet were in correspond