Evening star., 1939-01-10
Beware of q Surplus

Beware OF q Surplus
Washingtonians may differ as to
the forms of taxation to be written
into the new revenue program, but
they should present a united front
against raising far more than is
needed to meet immediate require
ments, on the theory that this is to
be a permanent, long-range tax bill.
Reliable reports indicate the plan
will include both sales tax and in
dividual income levy on the higher
incomes, together with corporation
net income tax and continuation of
the SITS real estate rate. With this
as new revenue base, the temporary
gross receipts business privilege tax
and the intangible personal property
tax would be abolished.
When the complete and final re-
port of the tax experts is made pub
lie it will be time enough to consider
the merits or demerits of the revenue
sources.
The disquieting feature of current
reports is the forecast that this pro-
gram would bring in net revenue
increase Of $7,OO0,OOO, after allowing
for taxes to be repealed, although the
deficit to be met in the coming year
Is said to range between $3,000,00O
and s4,OOOOOO.
The only safeguard for the District
taxpayer in this program is the So
called flexibility of the real estate
rate, and, no doubt, it will be argued
that the Commissioners would be in
position to lower the SITS realty rate
to avoid creation of a surplus.
There is a serious weakness to that
argument, however, and before
grasping it as a lifeline, District resi-
dents should keep before them the
fact that no long-range, permanent
tax law can safeguard this voteless
community against unfair burdens,
unless 1t is accompanied by perma-
nent, long-range settlement Of Fed
eral obligations also.
Consider for a moment that the
arbitrary $5,ooo,o00 lump sum pay
ment now being made by the Federal
Government would be only a frac-
tfon more than ten per cent of the
budget for the coming year. Con-
slider, also, that Washington has
many unmet needs that will become
greater as the city grows.
Now, suppose the long-range tax
bill starts out by raising a surplus Of
several millions over immediate re-
quirements, with no equitable adjust
ment Of the Federal payment. What
chance would the Commissioners
have to reduce the real estate rate
a year hence to absorb the surplus,
when they would find all around
them worthy and needed improve
ments-demanded In the course OF
National Capital development-on
which the unexpended balance could
be spent?
Planning the revenue structure to
meet future requirements is, in it.
self, wise course But, why commit
the local taxpayer to a long-range
obligation and leave the Federal
partner, as he is today, free from any
fixed obligation to share in this future
development OF the Capital City? If
this one-sided policy prevails it will
require no prophet to predict that
Washington's share of the annual
total spent on the Capital will con-
tnue to increase, while the Federal
payment as steadily decreases.
Senator Overton, Democrat, of
Louisiana, has suggested the wisdom
OF abandoning the Federal lump sum
and adopting some fair, definite
formula. Coming on the eve of the
writing of new District tax bill,
this suggestion offers the new Con-
gress an opportunity to plan WASH
ington's future needs fairly by writ
Ing into law definite obligation for
each partner-not merely the silent,
L l.