Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-26
TAX CLAUSE IN BLAINE BILL
SEEN BURDEN TO HOME BUYERS
Measure Aimed at Fraudulent Stocks and
Bonds Would Increase Assessment
on Many Residences

I chaser of property, subject to mortgage
| or bond issues, have to pay increased
| taxes simply because the broker selling
/ the issues appraised the property at a
! figure i'll excess of the then current
| assessed valued"
| Oscar H. Brinkman. local attorney,
who was employed to draft the measure
| for the Blaine committee, set at rest
| doubt as to the intent of this clause
as it relates TO the "appraiSals or valua-
i tionS concerning a security" by
| stating to The Star that the clause re-
/ ferred to the valuations placed on ply
| steal property on which realty securities
would be placed.
Affected in Two Ways.
| Under full f1edged enforcement of the
measure according to its present word
| ing it is pointed out by several leaders
| in the local business field, home buyers
/ here would be affected in two ways:
! First by the placing of minimum fee
/ of $40 for the registration of the mort
! gage issue on the property, and, second,
! by an increase in taxes in cases where
| the appraised value of the property ex-
| ceeded the assessed valuation.
| In his Interpretation of the Blaine
measure today Tax Assessor Richards
declared that the law would conflict
with the principle that assessments on
similar or comparable properties should
be equalized 1t, therefore, would con-
| fiict with fundamental law here rela-
/ tive to assessments, he said. He declared
for these reasons that he felt the pro-
posed law in its present form would
prove unconstitutional.
Mr.. Richards further voiced objection
to the bill on the ground that it would
place Government approval - through
the mandatory increase in assessment
on higher value for one property than
another of similar location, size and
cost of improvements, simply because oil
a higher appraisal made by or for the
issuer of a security in the first instance
He indicated that he felt Government
approval of the value of bond or stock
issue to be dangerous as Government
policy.
Method of Assessment.
Mr.. Richards has served as tax as
SCISSOR here for % years. This expert
ence has convinced him that his sys-
tenn of assessing private dwellings is
sound. correct, fair and in accordance
with law.
The fact that the assessed value
placed on a house is considerably less
than the original sale price or bono
house appraisal of its value in no wist
InpdIlS tIldl IllC PIOpCAIy 10 uooGooSd a.
less than its fair market value" as thu
law directs that it shall be, he states.
The reasons for the difference be-
tween the assessment and the origina
sale price of new dwelling, or the ap.
praisal on a proposed house for a con.
struction loan, Mr.. Richards gives a:
follows:
In the sale price of dwelling are in
cluded not only the cost of the liant
and cost of construction of the build
ing, but also the builders profit, thu
builders financing costs, commission
paid the salesman, insurance, builder
overhead costs, such as architect!
fee, and carrying charges prior to thu
sale of the house, on which the assessor
believes the home buyer properly SHOULD
not be made to pay tax.
Promoters Have Advantage.
The securities commission, com
mentators say, might approve as legiti
mate a mortgage or bond issue whert
the appraised value of the propert!
securing the issue is in excess of thu
assessed value. The promoter of thu
project, therefore, it is asserted, woulC
enjoy Government approval OF thu
soundness of the bond issues, bu
the buyer of the physical property
if it be sold, would have to pa!
taxes in accordance with the ap
praisal made for the purpose of the
sale of the bond or mortgage issue
under terms of the Blaine measure.