Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-29
Uncle Sans Intangibles.

In letter TO the editor correspondent
Of The Star, George B. Kennedy, makes
the point that while 1t is absurd to
construe the Federal obligation to
Capital maintenance on the basis Of
Uncle Sam as a municipal taxpayer,
please be governed by the whole tax
law and include In the estimate intan-
gible personal property"
Instead Of the seven or eight millions
estimated by Mr.. Simmons, the CORE
spondent writes, there would be "ap-
proximately $4,000 900 additional an
nually. The Federal Government owns
and holds in the District of Columbia
securities covering the funded debts
Of foreign governments approximating
$11 ,0o0, 900 900, besides other securities
which, under the law, would be taxable
II owned by the citizens Of the District
Of Columbia" This, says Mr.. Kennedy,
should close all argument with respect
to using the taxable values of the Fed
sral Government in the District as a
basis for its contribution ''or else open
up q new field for thought and argu-
ments which seems to have been en-
tirely overlooked by the Bureau of
Efficiency, Mr.. Simmons and The Star
Is well"
OF course, the matter Of arriving at
q valuation of Uncle Sans taxable
intangibles has not been overlooked
entirely by any of those whom Mr..
Kennedy mentions. The Bureau of
Efficiency, in its report. made rough
guess at the amount Of taxable intan-
gfbles by coneeiving them as being
equal In value to tangible personal
property. The basis of computation
was the fact that determination of
the ratio between the tangibles and
intangibles reported by the principal
business houses Of the District showed,
on the average, that the intangibles
Squa-ed the tangibles In value. There
Tore, = Intangible personal property
vas e.?en q value Of $eo,S71 ,4s0, the
same as tangible personal property.
The bureau stated. In this connection,
tnat 1T would, Of course, be out Of the
question to use the actual intangibles
OF the Federal Government for this
purpose. including. Is they do, the cash
reserves IN the Treasury and the debts
que the United States by foreign Roy-
ernments and the railroads"
Commenting. ct the time, on the
bureaus report. The Star pointed out
that the Bureau Of Efficiency had been
Justly consistent In including Uncle
sans Intangible personally In estimate
ing his debt as taxpayer, but that the
estimate Is on q basis that causes the
theoretical valuation to be an insignifi-
cant fraction Of Uncle Sans actual in
tangibles and millions less than the
probable intangibles Of the owners of
great industries 0ike the automobile in
dustry Of Detroit) whom Uncle Sam in
this hypothesis represents. The only
reasonable criticism of the bureaus esti-
mate Of Uncle Sans equitabiy taxable
intangibles is that It is too low"
The part Of the bureau report that
usually Is overlooked in the House, how.
ever, in discussing the basis of comput-
ing the Federal Governments obligation
to the District is that after suggesting
. rough estimate Of the taxable prop
erty held by Uncle Sam the bureau
coupled with this first liability a second
liability ION account of the loss of reve-
nue. and on account of extraordinary
expenditures occaSioned by the fact that
Washington is the National Capital"
The bureau made no attempt to AK the
amount - this second obligation. The
District has merely asked that if the
first is emphasized as amounting to a
mere $7,44o,93s. the second item be
given its due emphasis and made the
subject Of careful and intelligent in
quiry. II this were done, the lump
sum would exceed even the $12,o00,o00
that the Senate has recommended.