Evening star., 1934-11-30
The President on Fiscal Relations.

The President on Fiscal Relations.
No one can justly quarrel with the
Presidents desire to convince himself,
at the outset of his promised attempt
to end the hit or miss" policy of
appropriating for the National Capital,
as to the adequacy and fairness Of the
local tax burden
Many before him have approached
a study of the unique, complicated
fiscal relationship between local COM
munity and exclusively controlling Ma
tional Government from that angle. A
great many other considerations are
involved, but these may logically await
the outcome of the Presidents pro-
posed tax inquiry.
The President would determine the
adequacy of the local tax burden on
real estate by comparing it with what
other cities bear that are comparable
He indicated that he would seek an
adjusted or evaluated tax rate as his
yardstick. A method Of adjusting tax
rates for comparison, casually men,
toned by the President, is to apply
to the tax rate the reported ratio of
assessed value to true or full value of
property For instance: If a city's
tax rate is twenty dollars thousand
and although the law specifies 100
per cent assessment the assessor or
somebody else estimates that property
is actually assessed at so per cent of
full value, then the adjusted tax rate
Of the city is ten dollars.
Naturally, the determination of these
ratios of assessed to full value is not
as simple a task as it might appear
to be and it is taken for granted
that those to whom the President in
trusts his search for fair, accurate
yardstick Of tax burden measurement
will give due consideration to their
choice.
When the so-called Mapes Commit
tee of the House made its report on
comparative tax burdens in 1881, it
ironically included the observation
that arbitrary set-ups of property
values can be worked out to the ad-
vantage of any interests by mathe-
matical calculations" and then pro-
ceeded to produce mathematical CAL
culations" of adjusted tax rates that
were reduced, by careful analysis, to
an absurdity. For the difficulty Of
adjusting tax rates on the basis Of
ratios of assessed to full value is that
determination of such ratios is gov
erned by pure guesswork and this
guess work, in turn, is influenced by
variety of political and other con-
siderations. The resulting yardstick
varies for every State of the Union,
and is NOT alike in any two of them.
1t is therefore unreliable, worthless
and misleading as common standard
of measurement. Applying such a
yardstick to measure tax burdens, it
was demonstrated with mathematical
certainty that the tax burden in Jack
sonville was in 1881 considerably
higher than in Chicago, and twice as
high as in Miami or Tampa; that the
b,,r in, hntn ylroc
twice as high as in Dallas and that
of Cleveland was only two-thirds of
that of Waco.
There are other incredibly grotesque
conclusions, such conclusions being
false because the premise is false
that premise being that tax rate,
coupled with estimated or gueSsed-at
ratio of assessed to full value, produces
an accurate picture Of relative tax bur-
dens. The authorities, including the
Census Bureau, are agreed on the
difficulty of obtaining such estimates
with any reasonable degree Of accuracy
and most of those who use yardSticks
made of such estimates apologize for
their use.
The District assessor has said that
Washington is assessed at about 80
per cent of true value, as determined
by sales prices, and shrinking property
values in the depression brought this
assessment, Mr.. Richards has said,
nearer 81 per cent of actual value.
This is an absolute ratio, and WASH
ington suffers, in comparison with
other cities, when this absolute ratio
Is used relatively; that is, when Wash
ingtons 80 or 81 per cent Of real value
Is compared with reported 100 per
cent ratio given by some over-enthu-
siastic assessor in another city, where,
as in most cases, 100 per cent is re-
uuired by law. One hundred dollars
of legal, full value in other cities may
mean anything from twenty-five or
thirty dollars up, Coupled with the
elusive factor of what constitutes true
value" are the equally uncertain and
varying standards of assessment by
hundreds of different assessors.
The yardstick preferred by Assessor
Richards, the Bureau of the Census
and others who have experienced the
difficulty If not impossibility of OBJ
tanning accurate estimates of ratios Of
assessed to full value, is one which
uses actual statistics relating to assess
ments, tax levies, receipts from the
several forms of taxation, expenditures,
indebtedness. etc. all Of which figures