Evening star., 1928-04-13
Taxation to Pay Interest on Loans.


During the World War and imnie-
fiiately thereafter very many American
cities indulged in a financial jag. bor-
rowing easily and heavily from our
over-rich investors in tax-exempt mu-
nicipaI securities in avoidance of In
come taxes and surtaxes. Part OF this
borrowed money went into useful. per-
manent improvements by which the
cities benefited: another part was wasted
IN extravagance or graft. Congressmen,
whose home cities thus heavily and in
MANY instances unwiSely borrowed. re-
fused, as washington's legislature, to let
Il borrow at ali.
1t results that the taxpayers Of these
cities, having enjoyed the beneit OF
these loans. are now compelled to tax
themselves to pay interest and sinking
fund or the loans. and these items IN
crease the amount of their property tax
levy. and of their tax rates. which in q
way set the pace for washington. But
uhy should Washington taxpayers. who
have enjoyed the benefits Of no loans. be
required to pay on basis which co-or-
dfnates them in per capita and total
payments and In tax rate with cities
which are compelled TO raise millions
IN taxes to pay interest:
Baltimore, for example. in 1928 had
70 tax herself s4.s43.3Ss to pay interest
on debt obligations Baltimore raised In
total taxes over - millions. II the por-
ton of her taxes TO be devoted to In
terest were subtracted. Baltimore's
property tax levy 70 be applied to mu-
nicipal needs corresponding to those of
Washington would be actually less than
washingtons total property tax reve-
nue. Of 2O,4o0, ,o00 In other words. II
we omit taxes for interest payments.
washington taxpayers raised in general
property taxes for municipal mainte-
nance and development In 1925 more
than those Of the far larger and richer
city Of Baltimore in 1923.
Washington. which has enjoyed the
benefit Of no loans. should not be re-
suired In order to put itself on su-
perficiaI taxpaying equality with other
cities TO tax itself I'm the amounts rep
resented by these interest payments. and
they should be deducted from the prop
erty tax Ievies Of these other cities and
from the corresponding tax rates In a
comparison with Washington.
These outlays for interest on debt are
heavy. as, for example. In 1928: For
New Orleans, s2.243.6s2: Minneapolis.
e. 2,Iss, 500: Newark. s2,S3s.s6e; Baih-
more. sz.s43,sss: ST. Paul. 81 ,2os.5o7;
Providence, si.I46.53s, and Denver.
eI0is.s75.
This obviously equitable deduction
was made in the statistics Of 1925 from
al the cities. including Washington. ana
the result shows washington's readjust-
cd tax rate TO exceed those OF all the
f5,irty-six cities in the list except two
small cities In Ohio, three small cities
IN Texas. Norfolk and st. Louis. Wash
fnetong readjugted tax rate exceeded
those Of ten cities In Ohio, including
Cleveland and Cincinnati: i've cities IN
Texas. including San Antonio and Dali
las: all the cities of Virginia. except
Norfolk: in short, all Of the thirty-six
cities cn the list except the seven al
ready indicated
Many of the cities In the list oor-
rowed money IN addition TO that which
they raised IN property taxes IN order 70
meet the cost Of permanent improve
unents. In addition to current mairte-
nance. Their hint 10 Washington -
that our property taxpayers Of to-day
are paying ali they should at the si.7e
rate, and that il more money is needed
b ID that which the Nation win In
equity supply :: should be raised BY a
bend sue, I'm which beth Of the parties
70 the National Capital partnership
should participate; or bV advances Of
ii Districts share Of these expenses
from the Treasury, TO be repaid with
interest. a. In the period between 1890
and 1919.
-~----~--r~--s- $50