Evening star., 1939-01-17
The Tax Report


tions for substantial increase in the
Districts tax burden, the report on
the local tax study delivered to Con-
gress yesterday is in some respects
gratifying. Coupled with the Presi-
dents decision to make a study of
the effect of governmental tax ex-
empt holdings on local revenues in
the District and other Jurisdictions,
the report presents the basis for a
sound approach to the vexing prob
lem of fiscal relations and lends add
ed weight to the proposals already
advanced by Senator Overton and
others.
Without attempting at this time
any analysis Of ths new revenue
raising measures proposed, this much
is to be remembered in connection
with the suggested program: Two
taxes which yield a total of about
$5,200,0O0 would be repealed; three
new taxes, plus the rewriting of a
fourth, would be substituted for
them and would yield a total of
$9,560,000; the net increase in the
tax burden Qeaving out of considera-
tion the real estate tax is $4,3OO,OOO.
The anticipated shortage of local
revenues for the coming year under
the pending budget lies between three
and four million dollars, based on
real estate tax rate of $3.50 after July
l, when the temporary $175 rate in
the current tax law expires. This
means that unless the twenty-five
cent increase in the real estate
rate during the past two years is al
lowed to expire, the new tax bill, of
course, would create an unwarranted
large surplus, because that twenty
five cents per hundred dollars on real
property means s3,300,0OO in revenue.
The gratifying portions of the re-
port lie, first, in the manifest at
tempt to deal fairly in the presenta-
ton of facts about the District with
out the antagonism or bias which has
marked some previous studies; Sec
ond, in the deserved Importance
which the report gives to the serious
problem in the District resulting
from the rapid increase in the ratio
OF tax exempt to total property.
The tax report points out that the
assessed value of land in the District
of Columbia actually has declined be-
tween 1928 and 1888, fact due in
large measure to the Governments
acquisition of property and its with
drawal to the exempt list. At the
same time, the report points out that
about thirty-six per cent of the en-
tire land area of the District (taxable
and exempt) belongs to the National
Government. 1T is apparent" says
the report, that the problems Gre
ated by continued acquisition OF real
property by the National Government
will grow increasingly acute" In
comparison with other cities, the re-
port finds that the exempt real estate
held by the National Government in
the District is ninety-siX per cent in
excess of the median in the cities.
Merely by coincidence, Congress
also received yesterday data gathered
by Government officials on the value
of Federally owned property through
out the country, together with the
announcement that the President has
created Federal board which, with
other things, will study "the situation
in different communities adversely
affected by the loss OF tax revenue on
land purchased or acquired by the
Federal Government"
The figures in this report showed
that the Government property in
Washington constitutes more than
twenty-one per cent of the estimated
total valuation of Federal property in
Continental United States.
While the Government has been
adding steadily to it's tax-exempt
property area in recent years, the
Federal lump sum payment has been
a steadily diminishing percentage of
the total cost of running the city. AS
a result Washington is facing third
new tax bill in as many years.
What of next year and the year
after? Heavier tax burdens seem in
evitable unless out of these new re-
ports and other recent developments,
comes some fair substitute for the
lump sum-some plan that will rec
ognize that the National Govern
ment has a fixed obligation to the
National Capital and that it increases
as the local taxpayers obligation in
creases.
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