Evening star., 1932-05-24
Modifying Tax Burden Factors.

Modifying Tax Burden Factors.
In comparison with what other mu-
inequalities pay it has been demon
strated that the local community is
bearing fair and adequate tax burden,
heavy in relation to the tax burdens OF
the largest cities in the country, heavier
than the tax burdens of cities most
closely approximating it in area and
population. Injustice to the local tax
payer is threatened when there are at
tempts to lift his burden of taxation to
the level of the most highly taxed
cities. AS a matter of fact there are
sound reasons why the local burden of
taxation should be relatively low. Some
Of these reasons are discussed in the
article on local taxation appearing else
where in these columns today. They
ere among the modifying factors that in
equity must be considered in connection
with any appraisal Of the local tax
burden.
WASHINGTON is city that lacks the
industrial and commercial tax resources
CT the average large, self-suppCrting
American municipality. It's industries
are only the small. clean industries
that are admissible in a city set apart
for the Capital of the Nation. Its chief
industry, the Federal Government, c.
cupies large part of the limited total
area of the District, and that part,
constantly being increased b. new &C
QUESTIONS of property is taX-eXempt.
Washington's total taX-eXcmpt area IS
larger, in relation to the WhCle, than
in any other city OF the country. The
Bureau of Efic:encys 1923 valuation Of
this taX-eXempt area occupied by the
National Government, the Municipal
Government. the property of foreign
nations, property OF taX-eXenpt institu-
tions, such as churches, showed that in
value it amounted to more than half
of the taxable area. Yet comparisons
of Washingtons total assessment, total
tax levies, tax receipts, etc, with those
of other cities, show that the portion
Of Washington that is taxed is made
to yield revenues comparable with those
in cities where relatively speaking, every
square foot of property produces its part
of the total payment of taxes for sup
port of the municipality.
There is the additional consideration
that while other cities are at liberty to
extend their boundaries to embrace new
taxable resources, the area of the Dis
trict is fixed by the Constitution itself
and cannot be extended foot beyond
existing limits. That part OF the tax
paying population moving beyond those
boundaries to the adjacent States IS
lost. as are the taxable areas Of realty
taken over by the Federal Government,
or its agent, the Municipal Government,
for its own use.
These and other factors require that
when there are comparisons OF tax bur-
dens between Washington and other
cities they be reduced, at the outset, to
comparisons between tax burdens rep
rasenting current city maintenance.
With others, elements that go to swell
the size of tax rate in other cities
are the payments of interest on munic-
ipal Indebtedness and the payment OF
State taxes. Such payments should be
eliminated when comparisons are sought
between the significant cost of current
city maintenance.
Cities borrow money for investment
in public service enterprises. for the
immediate realization of programs of
public works or because they are un-
wisely enticed into extravagsnt spend
ing AS Washington's legislators have,
wisely or unwisely. prevented local in
debtedness and have pursued strict
pay-as-you-go policy, it is unfair to
include the clement of municipal in
debtedness elsewhere in comparisons
with Washington. Inclusion of the debt
element is misleading, under any cir
cumstances, whether or not Washington
figures in the comparison.
AS the WaShingtonian enjoys none
of the benefits received through pay
ment of State tax, State ta@es should
be eliminated when tax burdens of
other municipalities are compared with
his. The comparison is betTeen city
tax burdens, not between city and State
tax burdens The comparison Is be-
tween the taxes paid by contributors
substantially in the same area, to be
distributed to the beneflciaries in the
same area and for the benefit of that
area alone. Until the Waslingtonian
enjoys the benefits of taxes paid to a
State, it is illogical that his city taxes
be compared with the city and State
taxes paid in other municipalities.