Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-02-03
EQUITABLE Considerations.

II the people Of City "A" decide
TO build a municipality owned and OPP
Grated power plant and borrow the
money to finance it and the people of
City "B" decide to take over and OPP
crate the transportation system, float
ing a bond issue to get the purchase
money, it is absurd to suppose that the
people of City &C., lacking such i'm
provementS, are going to increase
their taxes merely to make them
compare in total amount with the great
er burdens assumed by "A" and "B,"
Yet Washington with no bonded in
debtedness, enjoying none Of the ad
vantageS and paying none of the pen
alties for living beyond its income on
borrowed money Is constantly COM
pared in the taxes it pays with the
cities which have borrowed money and
whose annual interest payments on such
borrowings average 106 per cent OF
their total governmental cost payments.
In equity these interest payments
should be deducted from the taxes Of
other cities when such taxes are COM
pared with debt-free Washington. The
Mapes committee opposes such deduc-
tons principally because their (the
other cities burden has been so great
that they could not afford to add to
it for the cost of needed public i'm
provementS"-and therefore have been
forced" into debt.
That statement is open to Ques
ton. or the stupendous total funded or
fixed Indebtedness of the cities in 1929,
amounting to more than $7800,000, 900,
approximately 20 per cent represents in
vestments in public service enterprises,
many of them self-sustaining invest
mentS for the future that, if
properly managed, in time will
earn profits for the investing mu-
inequalities. Another great proportion
of the total debt represents pure eX-
travagance Municipalities were urged
to borrow money and issue taX-eXempt
bonds that were eagerly sought by rich
investors after the war, who thus
escaped income and surtaX payments
couectable on other forms Of securities,
and many cities responded in fever
of Unprecedented borrowing. And to
say that city borrows money be-
cause it cannot afford to add to its
tax burden is illogical. Borrowing
money certainly adds to the tax burden.
The cities borrowed money because
IL is the convenient and sensible meth
cd Of raising cash for specific pur-
pose, and because it spreads the burden
Of taxation over a period Of years. If the
time has come to pay the piper after
period of living on borrowed money
that was lovely while it lasted, Wash
ington should not be penalized because
It has been kept to expenditures that
come from current revenue.
TodayS article Of The Star series on
Washington's tax burden discusses
other equitable deductions that should
be made when the tax burdens Of other
cities are used with 1t in comparisons.
The MapeS Committee found that 1t
makes no difference by what name the
tax may be called, a State tax, school
tax, city tax or county tax, 1t Is the
actual money paid over the counter OF
the public treasury that counts, and
that is the only true measure of COM
parative burdens
Yet, the question is not one Of COM
parative burdens, but of the burden
that in equity should be assumed for
the benefits received. Washington re-
ceives none of the benefits of a State;
It should not pay an amount that is
equal to the State taxes paid by other
cities that receive the benefits Of par
ticipation in the rights and powers OF
State. or enjoy participation in the
bounties divided among the States. That
these are tangible benefits, and tangible
bounties, Is not a matter of theory or
conjecture. 1t is a matter of fact.
Todays Star article discusses fully
these equitable considerations that must
in fairness be given In comparing
waShington's tax burden with the
burden OF other cities.
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