Evening star., 1947-03-02
Figures Reveal D. c.
Is Not Undertuxed
Per Capita Payments Overlook
Tax.Exemption Problem

Tax-Exemption Problem
The feeling on Capitol Hill that the
District Is undertaxed goes back to the
days when Patrick Henry, the persua-
sive Virginian, expressed the fear that
the inhabitants OF the newly planned
. Federal city would be tax-exempt guests
Of the Nation. He was never more in
error.
The District has never been tax free
and whether 1t is now over or under
taxed would require more time and
study than most of its critics have been
able or willing to give it. A notable
exception to this. however, has been
Representative Bates, Republican, of
Massachusetts,, who has put in long
hours recently preparing himself to
handle the Forthcoming city tax bill
now at the Budget Bureau. When Mr.
Bates finally reaches conclusion on
the subject. whatever it Is, it will cer-
tainly not be haphazard.
In the first place. what is meant BY
undertaken? Does the District have
to pay more gross or per capita taxes
than the home city of every member OF
Congress to escape the charge of un-
dercharge? Must its tax rates or as
sessments equal or exceed those in all
other jurisdictions of the United States
to avoid the accusation? Surely not.
Washington is not the highest taxed
community in the country. Nor, as
the Board of Trade told the Commits
sioners at the tax hearing last fall, ls
there any reason why it should be. The
local government is honest and relatives
ly efficient. If not aggressive. 1t oper-
ates under the watchful eye OF the
General Accounting Office and its ex-
-penditures are subject to pre-audit to
insure that the will of Congress is being
carried out. so far as city records show,
before the expenditure is paid for.
Tax money goes either to operating
expenses or public construction. The
tax dollar has been carefully husbanded
through the current period Of high
prices by the refusal of the Engineer
Department to contract for many items
of public construction when bids have
been excessive. If the same thing can
not be said about operating expenses,
it is because of pay increases enacted
by Congress and the need to buy many
items regardless of price for day to
day operation.
At the moment the city is debt-free
It's entire income can thus be applied
to expenses other than interest and
repayment Of obligations.
Washington is well run by a corps
Of civil servants not subject to the
ins and outs of politics. 1t is not the
heaviest taxed of similar communities
yet. It may well be if the entire new
tax program Of the Commissioners is
enacted. Local taxes now yield $50,-
100000 year exclusive Of water rates
and the gasoline tax. The new pro-
gram would add $17.750000 or increase
the burden nearly one-third.
The problems of comparing, fairly,
taxation here with that elsewhere are
many, as the Census Bureau pointed
out in providing comparative study
for Mr.. Bates. The chief difficulty is
that the District provides for its popu-
lation many services which in other
Jurisdictions are functions either of
counties or States. The bureau rightly
points out the District is unique in this
respect.
Per capita payments as a basis OF
comparison are not strictly fair to
the District. Per capita or per person
figures are usually obtained by dividing
the population figure into the receipts
on the assumption that nearly every
one pays taxes. This is long way
from being true here because Of the
large number of transients who are
able in one way or another to escape
payment of local levies A more equit-
able basis would be a per taxpayer
measurement if this were possible of
determination. District officials say 1t
is not.
The usual form OF criticism directed
toward the District is that its property
tax Is low and the Census Bureau fig
ures, at first glance, would seem to
confirm this. The bureau, on q per-
centage basis, found that most OF
10 other cities obtained more money
from real estate than the District and
that elsewhere property yields greater
part of the total tax income than here.
Census officials correctly rejected
comparison of tax rates or assessments
as meaningless. Their report pointed
out the difficulty of finding out from
any community the real relation be-
tween assessed value for taxation and
true value. Although they asked this
question of the proper authorities Of
the cities compared, most disclaimed
knowledge or merely cited the legal
requirements in their jurisdiction. OBJ,
viously the fact that the law requires
assessment at full value does not mean
for a minute that this is done. And,
of course, until the relation Of assessed
to true value is known. the amount Of
the tax rate means nothing. A $4,000
property assessed for that amount and
taxed at rate Of $17.50 per thousand
would yield no less than the same
property in another city assessed at
5000 and taxed at $35 per thousand.
The bureau did not, however, include
the taxable area of the cities compared
and this is extremely significant. For
example, it Is probably quite true that
other cities get more money from their
real estate tax than the District. But
less than half the land here Is taxable
because of Government and private
exemptions. True, other comparable