Evening star., 1939-07-17
The Tax Bill

Congressional opinions may differ
on the makeup of the new District
tax structure and the amount of the
Federal payment in the conference
agreement awaiting final Senate and
House action, but no sound objection
can be raised to the decision of the
conferees to fix the national obliga-
ton as definitely as the local obliga-
ton in this basic law.
In the 1910 Appropriation Act Con-
gress already has made the Federal
share $6,000,000 lump sum for one
year only. In the revenue bill, how
ever, it is establishing a tax program
which, with the exception of the
real estate rate, may stand for
number of years to come. In fair
ness to the local taxpaying commu-
nifty, the measure should also con-
tain the same continuing authorize
tion for a definite Federal payment,
as recommended by the conference
report.
Of course, no law is actually per-
manent, since one Congress cannot
bind its successors. Therefore, both
the tax structure and the national
payment may be changed as time
goes on, but equity requires that one
should always be stated as specifically
as the other on the statute books.
A partnership under which one
party has definite and continuing
obligations, while the other is free to
vary his share from year to year even
though he exercises full control over
the undertaking, is not only an unfair
arrangement, but one calculated to
breed controversy.
1t is hard to imagine such part
nership ever existing in private life,
yet that is the arrangement Con-
gress laid down last year for the
partnership between the Nation and
the local community, when it re-
pealed the 6040 ratio of substantive
law and left Washington dependent
only upon temporary lump sum
for which no basic law existed
Although the 40 per cent Federal
ratio was evaded during fifteen years
of temporary lump sum practice, its
repeal in the 1888 tax law left Wash
ington for the first time in sixty years
without any basic legislation recog-
nizing a national obligation toward
the Capital.
In this new settlement of the fiscal
relations problem Washington still
loses the wise principle of definite
percentage ratio, which prevailed for
nearly half century prior to 1925,
and for. which the Senate contended
as long as it could in the recent ne
gotiations with the House.
But, even the $6,000000 lump sum
payment, written into permanent
legislation, would be a greater meas
ure of justice to voteless and i'm
potent District taxpayers, than the
present situation of no fixed law
on the subject.
House members who were against
any increase in the $5,000000 lump
sum should bear in mind that the
Senate gave up more in the compro-
mise when it receded from the Over
ton formula, which would have eS-
tablished a fair, scientific yardstick
for adjusting the national obligation
from time to time in accordance with
the land area of the city required
for national purposes.
1t should be remembered also that,
along with this partial measure of
fiscal equity, Washington is having
added to it's tax structure an unusual
form of local income tax, from which
a large number of government Off
cials and others actually residing in
the District, and receiving the bene-
fits of local government, will be ex-
empt on the ground that their legal
domicile is in one of the States.
Congress should ratify this confer
ence report promptly, since the con-
ferees apparently have gone as far
as they can at this time in compro-
missing their differences. But if a
year of experience reveals income tax
inequities growing out of the city's
substantial percentage of temporary
population, the subject should be
given further study at the next ses-
sion