Evening star., 1934-12-02
CENSUS UNIT HELD
AID TO TAX PROBE
First Inquiry Ordered by
Chief Executive Eager
Iy Awaited.


branches Of the Government to make
the study of taxation which President
Roosevelt announced recently he will
call for to determine how the Districts
tax burden compares with other cities.
Throughout the long period Of de-
velopment of the National Capital,
with the local community and the
Federal Government as partners in the
undertaking, the residents of the Dis
trict have seen many inquiries into
this subject, but this is believed to be
the first investigation of local taxation
to be instituted by Chief Executive,
with the avowed purpose of seeking to
end what the President called the hit
or miss policy" Of appropriating for
the Capital
The President has indicated he may
turn the task over to tax experts in
the Treasury, but, according to dis
patches from Warm Springs. he will
consult Secretary of the Treasury
Morgenthau early this week before de-
Gliding and has indicated he will con-
slider the Census Bureau as possible
agency.
Whatever agency is given the assign
branch of the Government-the
Census Bureau-Which has specialized
for many years in gathering detailed
statistics on assessments and taxation
in cities throughout the country
Should the President decide to select
separate group to make his investiga-
ton, the Census Bureau will doubtless
be represented.
The Treasury Department has ex-
perts, of course, who could undertake
a study of municipal taxation and
assessments. In its regular field of
activity, however, the Treasury De-
partment is concerned chiefly with
Federal taxes from a Nation wide
standpoint, as distinguished from the
widely different factors and problems
which enter into the question Of
municipal taxation, and comparisons
Of the tax burdens in various cities
Regular Job of Bureau
figures on city tax burdens has been
one Of the regular functions OF the
Census Bureau, and the results are
presented annually in report on
financial statistics of cities.
In any comparison of the tax bur-
dens of different cities. the first Ques-
ton that arises is, what basis or
method of comparison should be used
to arrive at the fairest results. This
leads to the related question of what
basis of assessment is used in the vari-
GUS cities and how near the assess
ments approach estimated true value.
A variety Of different methods Of
comparing city tax burdens have been
tried from time to time. and Wash
ington. in the course of many inquiries
into its tax levies, has had expert
ence with nearly all of them.
For example, the so-called adjusted
tax rate" method has occasionally
been suggested as means of compar-
ing Washington'S actual tax burden
with other cities. This method con-
sists of trying to eStiamte the ratio
which the assessments of city bear
to the fair or market value, and ad-
justing the tax rate accordingly. Un-
der this method, if the property in q
given city was assessed at so per cent
Of full value, and the rate was $40
per thousand, the adjusted rate, after
allowing for the difference between
be $40.
Accuracy Difficult.
At first glance this method might
appear simple enough, but it con-
tains a serious weakness in the diff
Guilty of finding out accurately what
the ratio is between assessments and
full value in most cities.
Because of this uncertain basic
factor. two governmental agencies in
the past have frowned on this method
of comparison. and other authorities
have pointed to its inherent weak
nesses.
The United States Bureau of Eff
cheney, in reporting on fiscal rela-
tions between the Federal and Dis
trict governments in 1880, held this
method of adjusting tax rates to be
unsatisfactory, because of the varia-
tions in opinion as to the ratio OF
assessments to market value.
The Census Bureau formerly in
cluded in its annual reports on sta
tistics of cities table showing for
each city the percentage which the
reported basis of assessment in prac-
tice bore to the estimated true value.
Several years ago, however, the bureau
dropped these percentage figures from
its annual compilation of statistics
and has not used them in its last two
printed reports. These reported ra-
tios of assessments in practice to
estimated true value had come to be
regarded as undependable.
Estimate Usually.
The 1880 report on financial statis-
tics of cities was the last one in
which the bureau included these f1g-
ures showing the percentage OF re-
ported basis of assessment to esti-
mated true value. In that report the
bureau declared that ''the reported
basis of assessment in practice is for
most cities an estimate, furnished by
city officials, of the percentage which
the assessed valuation of property
forms of its true value. The figures
for both real and personal property
for most cities are only approximately
correct. although those for real prop
erty are the more trustworthy
When the former United States
Bureau of Efficiency was discussing
this question of the estimated ratio
of assessed to true value, it pointed
out that no two authorities agreed
on what this ratio was. After citing
illustrations of how different research
agencies had arrived at different esti-
mates. the efficiency experts said:
"These widely varying results obtained
by the use of the same method lndl-
cate rather conclusively that the
method is unsatisfactory"
The Efficiency Bureau further de-
clared that in collecting data for its
report "it has been found that gener-
ally no records are maintained from
which reliable ratios of assessed valu-
alton to fair value can be determined.
Ratios which have been used in ad-
justing tax rates on this basis are
for the most part mere guesses, and
the resulting adjusted rates are OF no
specific interest, but are useful only
in indicating general trends"
The Census Bureau, in its cOmpari-