Evening star., 1935-04-15
The Fiscal Relations Report.

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The Treasury Departments report
to the President on certain aspects Of
the fiscal relationship between the
District and the National Government
is satisfactory to the District provided
the report is accepted by all concerned
in the spirit In which it has been
made.
As for that spirit. let us suppose that
a Judge Is called upon to decide
cause in equity arising out of the re-
lationship between two partners, one
of whom has no voice in the control
of the joint undertaking to which he
Is the majority contributor; the other
possessing exclusive control and con-
tributing about fifteen per cent
toward the maintenance and develop
ment fund Of the undertaking, al
though the uncancelled agreement.
written by himself, calls for forty per
cent.
After taking under advisement the
chief issues as presented the Judge
delivers the following opinion:
From the crude and preliminary"
evidence before me I conclude that the
non-voting partner in this joint un-
dertaking does not contribute as much
as the sole proprietors Of roughly
comparable undertakings elsewhere
contribute. I repeat, however, that
the evidence is not only crude and
preliminary" but is subpect to reason
able doubt as to its admiSsibility
because Of its admittedly question:
able accuracy. 1t Is, furthermore, in
complete and does not take into con-
sideration essentially important fac
tors regarding which the court has
been unable to inquire, and which
should be thoroughly examined. As
for the obligations and the manner
of their fulfiIlment by the controlling
partner in this undertaking. the court
can only state in bare outline some
of the claims and counter-claims
which have been made and does not
attempt to make even preliminary de-
cision, suggesting that further inquiry
should be made.
That is a fair statement of the case
as put by the Treasury report, which
is subject to criticism chiefly for its
willingness to draw premature con-
clusions from evidence which it thrice
condemns page 4. Page 8 and Page
13 of the reporD as crude and pre-
liminary' when used as "a measure
OF the comparative burden of tax
alton" As a concise statement of
elemental considerations, both pro
and con, entering into examination
Of the issues, the report is to be COM
mended for having sought an un-
pretudiced and objective point of view.
Two other thoughts may at this
time be expressed, however, regard
ing the report on comparative tax
statistics.
One is that the Districts low tax
rate, which required no extended in
quiry TO reveal as relatively low, has
become by curious and unique para
dox an unmitigated curse to the local
community when used-as it is usually
used-as q measurement of the local
tax burden in comparison with the
prevailing high tax rates in other
cities. For 1t is the tax rate, and not
the even more important elements of
assessment standard, assessment prac-
tice and the accuracy with which
they are reported or estimated, that
receives the emphasis in the Treas
ury report.
The other Is that in comparisons of
tax burdens, the object should be to
select for comparison the cities which
have reached that desirable goal Of
good municipal government reflected
in low city taxes and high standards
of municipal service. While no lcgiti-
mate objection may be sustained to
the practice of letting the chips fall
where they may by including all cities
Of roughly comparable population in
the search for an average" common
sense dictates the choice of the out
standing successful municipal govern
ments and not the notoriously extrava-
CANT or poorly governed municipalities,
when the object of the comparison is
the search for a measuring rod of
sound. Just taxation in return for
a high degree of municipal service.
The main element of incomplete
ness In the Treasury report, to be
remedied in further research, is the
omission of comparison of the actual
and per capita tax levies in well man
aged municipalities and reliance solely
upon the comparison of tax rates
modified by estimates or guesses
widely varying in accuracy and re-
liability concerning the relation of
assessed to true value.