Evening star., 1937-01-18
Confused Reasoning.

In none of its discussions is the fiscal
relations reports conception of WASH
ington as the American Capital more
confused than in its treatment of the ex-
cessive amount of taX-exempt real estate
held in the District by the Government
or other institutions. The reports fail
ure to give this factor any weight as
source of Federal obligation is one of its
astonishing weaknesses.
The report seems to attach considerable
significance to the statement that as
sessed values here showed little decline
since 1880, contrasted with the marked
reductions in other cities. But the ex-
PLANTATION of that lies in the assessors
refusal to apply any general reductions.
Property values declined here as every
where else during the depression. Thou
sands of equities we're wiped out. Many
cities applied horizontal reductions In
assessments to reflect deprecated values.
The fact that assessments here retained
their general level during the depression
Is no indication that property values did
not decline. On the other hand, it is
merely another demonstration of the
high standard of local assessments.
The contention of the report that
Governmental removal of property to the
tax-exempt list increases the value of
remaining property strengthens rather
ha lot
that Federal obligation arises in con-
nection with the ownership of tax
exempt real estate. If the immediate
effect of Government acquisition of prop
erty Is to increase the value of remaining
property, the longrange effect is to in
crease property values, and the tax load,
until property ownership becomes pro-
hibitive. A constantly increasing tax
liability is being imposed upon con-
stantly decreasing taxable area.
Thirty-eight per cent of District real
estate is now tax exempt. Within a
comparatively few years fifty per cent
will be tax erempt. Within not-too-
distant future seventy-five per cent will
be tax exempt and eventually the whole
burden Of Capital city maintenance will
be borne by the small fraction of taxable
property remaining with whatever help
is available in other forms of taxation.
1t is Illogical to argue that the constantly
increasing needs of the Capital should
be borne by the steadily diminishing
percentage of private property, or that,
even If it were equitable, it would be
economically feasible.
Nobody has seriously proposed that
the Government tax itself But there
Is a very real obligation on the part of
the National Government to contribute
both on the basis of an owner of tax
exempt real estate, paying a sum in lieu
OF taxation; and to contribute in recogni-
ton Of the excessive amount of real
estate held and used both by the Ma
tional Government and by the foreign
nations or by national organizations in
Washington because Washington is the
Capital Of the United States.
The analogy frequently drawn between
the National Government (the Districts
chief Industry and the chief industry or
industries of other cities is interesting
and is sound as far as it goes. But it
ends with the most significant difference
Of all-the fact that the Districts only
large industry is not only exempt from
taxation, but is exclusively in control of
the city which it dominates.
A Detroit might offer a General Motors
or a Ford certain concessions in assess
ments or taxation of its properties in
order to receive its benefits as an en-
ployer. But the city would continue to
exercise control and would cut its cloth
to fit the pattern of its revenue avail
ability. Here our dominant industry is
pictured by the report as entitled not
only to excessive concessions-excessiv
to the point of eliminating any except
Incidental contributions-whilet the DOM
inant industry remains exclusively in
control, not only of the taxes to be paid
by the community but of the size and
grandeur of the city the community is
to support.
That one fact alone is enough to con-
denim the report and accounts for much
Of the condemnation already given the
fiscal relations report.