Evening star., 1932-05-22
Weighing the Local Tax Burden
Citizens Joint Committee, in Comparisons of Actual
Total Figures and Per Capifas, Demonstrates
Untruth of Charges That Washington
ESCAPES Fair Taxation.

This is the first of series OF
articles discussing the tables sub
r1itted to the Senate subcommittee
on District appropriations by the
Citizens Joint Committee on Fiscal
Relations BetUeen the United States
and the District. These tables
shoued Washington's relatively high
tar burden among cities OF the
United States.
TN its comparisons of tax burdens
between representative cities of the
United States to determine the
/ relative weight of the local tax
burden the Citizens Joint Com
mittee on Fiscal Relations Between the
United States and the District OF Co
lumbia was at the outset confronted py
the difficulty of choosing method OF Of
comparison that would be as fair as II
was accurate.
The same dificulty besets any one
who attempts such a comparison. Cen
erally speaking, there are two methods.
One is to adjust" city's nominal
tax rate" by using the ratio OF assessed
to full or actual market value OF the
assessed property. For instance, Guy s
nominal tax rate may be 50 Thousand.
But the city may assess at only 90 per
cent of full value The city'S "ad-
iusted" tax rate would therefore De 81,
for the Thousand dollars on whlcn tne
tax rate of So is theoretically applied
amounts. as q matter OF fact, TO only
$500.
The other method is to compare the
actual total figures that have a sig
nificant bearing on the tax BURDEN
such figures as actual assessed Vaiue,
actual tax levy, actual total municlpal
tax revenue, etc.-and by taxing mo
consideration the population OF the ciIy
to compare the spread" OF such totals
by reducing them to per capitas.
weakness Of First Method.
The Bureau of Efficiency in its COM
parison of tax data for the House oe-
cided that the first method OF compare
son was impractical, and that the re-
suits would be of little value. The
stumbling block in such a method Is
the determination of what Is the actua!
ratio of assessed to full value. Fuii
value" is, at best, an elusive eiement.
And If an assessor Is required oy law
to value for taxation purposes at loo
per cent, the human tendency Is 10
show that the law is being enforced.
II is a physical impossibility, however.
to determine true value, and a physical
impossibility to assess for taxation at
100 Der cent. The actual ratio OF
assessed to full value Is, at best, guess
on somebody's part.
Comparisons of the burden OF real
property taxes" the Bureau OF Efnclency
explained, "in different cities cannot be
made by using the tax rates alone.
Such comparisons are meaningless un-
less it can be established that the bases
of assessed valuations are the same.
Two cities may have the same tax rate,
but the actual burden in one may be
twice that in the other, because OF
higher basis of assessments. Conversely.
one city may have twice the tax rate
of another, but the actual burden may
be the same because of lower basis OF
assessments. Therefore, attempts to
compare Washington's tax rate Of SIT
per thousand on real property with
Baltimore's tax rate of $24.13 or Min
neapolis' tax rate of $3.50, as Is so
frequently done, results In hopeless con-
fusion. To make such comparisons
mean something, attempts have fire.
uuently been made in taxation studies
to establish comparable adjusted tax
rates for the various cities. The usual
method employed to adjust such rates
is to apply the ratio of assessed valua-
ton to fair or market value to the
actual tax rates. AS to what this
ratio is. no two authorities agree.
Widely varying results obtained by use OF
the same method indicate rather conclu-
sively that the method is unsatisfactory.
The Bureau of the Census states that
its reports showing the ratio OF as
g. f,,n Inc hoCQd aeti-
mates obtained from city officials, and
that the figures are only approximately
correct. The Detroit Bureau Of Munich
pal Research frankly admits that until
cities give more attention to the problem
of determining the ratio OF assessed to
true value exact information relative
TO the tax burden will remain mys-
terry"
Per Capita Method Followed.
The Bureau of Efficiency, therefore,
chose the per capita method OF showing
relative tax burdens. The Select Com
mittee of the House criticized this
method, which showed WaShington's tax
burden as relatively high, and in its
own investigation chose the method
condemned by the Bureau of Efficiency
and apologized for by the Detroit bu-
reau. The House committee, in fact,
apologized itself for the use of the
method, stating in its report that 1.-The
realm Of science boasts no subject more
elusive, more controversial, than value
There are so many factors 10 be con-
sidered in arriving at the valuation Of
property that no two minds will get
to a very near approach to uniformity
in determining such valuation. That
Is particularly true of those charged
with the administration Of assessment
laws. Although it is difficult to deter
mine the relation Of assessed values to
actual values, the committee believes
that the ratios as they appear in the
statistical tables attached hereto are
as accurate as it is possible to obtain
These ratios were obtained from the
administrative officers of the municipal
governments, who actually make the
assessments, and from such organiza-
tions as real estate boards, chambers
of commerce and individual citizens
familiar with property values"
BY such method the House COM
mittee reached the conclusion that
Washington was not adequately taxed.
Precedent for Per Capita Method.
the per capita method Of comparison,
such a method entirely avoiding the
difficulties set forth, as above, by the
Bureau of Efficiency and by the House
Select Committee on Fiscal Relations
That method has been used and ap-
proved before in the inquiry Of 1915 by
joint committee of Congress on fiscal
relations, in subsequent inquiries into
fiscal relations, and it is the method
adopted and used for 20 years by the
Census Bureau. with the approval Of