Evening star., 1937-04-02
No Excessive Taxation.

Excessive taxation in Washington
could result from either of two methods
OF increasing local taxes. One method
would be to pile tax burden on the
District in excess of that borne by COM
parable communities. The other would
be to tax the District in excess of cur
rent revenue needs.
The tax bills introduced in the House
threaten both kinds of excessive taxa
ton. An addition of s12,000,0O0 to the
tax burden would amount to an increase
OF about 40 per cent-a drastic increase
under any conditions. 1t would, more
over, increase the local tax burden sub
stantially above those of comparable
cities, according to the census figures,
making Washington one of the most
highly taxed cities in the country when
1t should be one of the lowest.
Looking at it another way, an increase
of $l2,00O000 in the local tax burden
would be at least $6,00O0O0 in excess of
current revenue demands to balance the
District budget. If the purpose of rails
ing this s6,OO0000 of excessive revenues
is to reduce by that amount the real
estate TAX as suggested in some quar-
ters, the real estate tax reduction should
be ordered concurrently with the COL
lection of new taxes. The real estate
reduction certainly should not remain
merely possibility while the tax boost
becomes a certainty.
It would be more reasonable to view
the introduction of the nine tax bills,
however, as affording the Mouse District
Committee, to which they will be re-
ferred, an opportunity to select only
those which will produce, as fairly as
possible, the minimum of new revenue
needed to balance the District budget.
Senator Capper and Senator King have
already made such a suggestion and it
will be adopted, no doubt, by members
of the House committee
The people of the District, of course,
will not admit that the deficit confront
Ing the District now is due to inadequate
local taxation. If extraordinary condi-
tions justify some increase in the local
tax burden, equity even more clearly
demands an increase in the Federal pay
ment. The financial responsibility for
avoiding a deficit should not be placed
exclusively with the people of the Dis
trict while the control of the budget re-
mains exclusively with the National
Government.
Each of the new tax bills will natu-
rally receive careful analysis at the
hands of those whom they affect and
by the committees of Congress The
choice of tax measures which necessity
demands should be based on the least
harsh and most equitable distribution of
new burdens.
In this respect, doubling of the gaso-
line tax presents the dangers of gaso-
line tax diversion into channels wholly
unrelated to the obligations of motorists
Once such diversion is begun, there is
practically no limit and the experience
In the States suggests that the point of
diminishing returns in gasoline taxes is
quickly reached.
In connection with the proposed in
come tax, the extraordinarily high yield
from the existing tax on intangibles (for
which the income tax is proposed sub
stitute) is to be considered. The
Federal income tax green slips" now
available to local tax collectors have
already demonstrated their efficiency in
bringing more taxables to light, with
consequent increase of the yield, and
the District has always stood relatively
high in its assessment of intangibles.
A local income tax in the District pre-
sents complications not encountered in
other Jurisdictions. If Federal employees
are subject to local income tax while
exempt from such taxation elsewhere, it
would mean, as Mr.. Collins suggested
during the hearings, "a corresponding
right Ito tax such incomes) that must
be given to the States" If Federal en-
ployes were exempt here, the income tax
probably would fail to produce the
needed revenue and would be fantastic
in its inequity. AS it is, the bill neatly
exempts members of Congress and elect
ed or appointed officials serving definite
terminus cutting down considerably
the potential yield. The local intangibles
tax is not to be condemned as poor
revenue raiser. 1t is expected to pro-
duce more than $2,50o,o00 next year.
There is the additional important con-
sideration that the National Govern
ments taxation of incomes has pre-
empted this source of revenue and Fed
sral income taxation is apt to increase.
Other considerations will of course
present themselves as the tax bills are
subjected to study and analysis.