Evening star., 1933-02-01
Local Money for Local Relief.


1t has been reported that some men,
bers Of this subcommittee have pro-
posed increasing either the rate on real
estate or the rate on intangibles, the
proceeds from such an increase being
in theory utilized for local relief alone,
thus escaping any possible confusion as
to the use of Federal money for Dis
trict of Columbia relief purposes.
Such a proposal Is not only mani
festly illogical, but grossly unfair. When
the question was raised last year
whether local tax revenues appropri-
ated for local relief would not con-
tain a proportion Of Federal dollars
from the Federal lump sum Auditor
Donovan was quick to point out that
the matter could be clarified by insert
ing a clause in the appropriation bill
to the effect that money appropriated
for local relief is Ito be paid wholly
out of the revenues of the District of
Columbia" Such - clause has safe
guarded the appropriation Of local tax
revenues for extension OF streets and
avenues, Mr.. Donovan pointed out. for
more than twenty years and no ques-
ton has ever been raised as to the
use Of Federal funds for this purpose
I'VE will find way to pay the amount
exclusively from the revenues Of the
District Of Columbia" said Mr.. Dono-
van, 80 as to remove any objection
on the theory that the United States
would be contributing part Of the ap-
preparation"
AS matter Of fact. there is less
chance Of confusing Federal aid with
the appropriation of local revenues for
local relief than of confusing Federal
aid with emergency loans to the States,
from the Reconstruction Finance Cor
poration. At present the District does
not share in that privilege. But the
States which borrow money for emer-
gency relief are permitted to repay
such loans out of future Federal road
aid app.opr.atlJns. In c.fler words, In
1895, when the amortization of these
leans is to begin, the States may either
deduct their repayments from their
regular apport.onments Of Federal aid
funds or make other arrangements
The deduction from Federal aid allot-
ments will be mace automatically If the
States should default on their loans
Thus emergency aid to the States,
through the r. F. c. loans, clearly con-
templates the use of Federal money
collected in taxes from the citizens of
the District as we'll as from the citizens
in the States.
Other cities have been forced to the
appropriation of public funds for relief
purposes, but by drastic economies in
other expenditures are seeking to
escape increased tax burdens. Drastic
economies have likewise been effected
in the local budget, but the only
benefits have gone to the Federal Gov
ernment, which has reduced its contri-
button. 1t is unthinkable that sorely
pressed local taxpayers are to be penal
lied further by being plsstered with an
make bookkeeping entry that Is as
unnecessary as 1t is Illogical.
An additional objection to the tax-in-
crease proposition is that in the District
the increase of a tax rate to meet q
temporary emergency like the present
becomes q permanent tax rate unless
and until it is further increased. It is
far more dincult to secure from Con-
gress the decrease Of District tax rate
than its increase. The gravity rule that
what goes up must come down" does
not apply to District tax rate. Rather
it is true in this connection that what
once goes up never comes down."
The present era of depression, during
which rents of real estate are reduced
and market values of real property are
cut down without a corresponding cut
in assessments, is no time to increase the
real estate tax rate. The present bur-
den Is already unbearable. There should
be no increase Of the real estate tax
for any purpose. On the contrary there
Is urgent need Of decrease either Of
rate or Of assessment. Additional spe-
cial taxes like the ver-increasing gaso-
line tax should work such decrease in
stead of merely decreasing in effect the
national contribution.
Injury is threatened also by an in
crease Of the intangibles tax rate The
greatest revenue from the low--ate
classified tax on intangibles is derived
when that rate is fixed at figure which
holds upon the tax list a maximum of
intangibles to be taxed and which does
not drive the intangibles to other juris-
dictions or into hiding from taxation
anywhere. The owners Of intangibles
who have seen their holdings lose in
many cases nearly all and in some
cases all Of their value should not, un-
less it is absolutely unavoidable. suffer
additional losses by increase Of the tax
rate upon their intangibles which still
retain some value.
Happily, however, in the present case
it Is unnecessary to increase specifically
the tax rate upon any particular form
of taxables.
China has at least one slight advan-
tage over Japan with reference to en-
durance. 1t has been more accustomed