Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-01-06

The relationship of the Fed
eral Government to the District
Of Columbia was aptly described
by Senator Southland in 1885
when he was chairman of the
Senate Committee investigating
the fiscal relationship between
the Federal and District Gov
ernmentS:
". the committee has been
unable to separate the interests
Of the District from the in
terests Of the United States.
They regard it as the child of
the Union-as the creation of
the Union for its own purposes.
The design of the Constitution
and its founders was to create
q residence for the Government,
where they should have abso-
lutte and unlimited control :"
It was further described in
1896 by William Howard Taft,
later President and Chief JUS
tice of the United States. as
follows:
The object of the grant Of
exclusive. legislation over the
District was, therefore. national
in the highest sense, and the
city organized under the grant
became the city. not Of a State,
not of a district, but OF a Ma
ton"
Such a relationship is OBJ
viously appropriate, but it is
complicated in actual practice.
Some aspects Of this relation
ship result iI. limiting the rev.
enues of the District OF Column
bia; other aspects impose un-
usual cost burdens upon the
District because it Is the Cap
ital of the Nation.
Limitations on Revenue
Illustrative Of the means by
which Washington's revenues are
limited because 1t Is operated as
the Federal city. are:
l, The District was established
and developed to serve the Fed
eral Government as its capital.
and does not have and probably
never will have independent basic
industries that would support it.
As a result, the Federal Govern
ment is actually the major in
dustry" in the District. Recent
studies show that a cross-section
Of the Nations largest corpora
tons pay approximately 81 in
State and local taxes for every
$40 spent for salaries. II the
same ratio were applied to the
Federal payroll Of $3.50 million
In Washington, and the Federal
Government were to pay to the
District the amount which a
private employer of comparable
size would pay in State and local
taxes, the annual Federal pay
ment to the District would be
$47.S million.
2. Land owned by the Federal
Government in the District, ex-
elusive OF streets and alleys,
amounts to 42.8 per cent of the
total land area Of the District.
No taxes are paid on this land
and no other major city has such
q large part OF its land and i'm
provements tax exempt. This
area, together with the improve
ments thereon, II taxable, would
yield 1904 million in real estate
taxes. To further show how in
dustry supports the ordinary city,
o survey Of taxes in the District
revealed that for each 81 of real
estate tax that is paid by business
there Is an additional sum of
$3.50 paid for other District
business taxes. Consequently, II
the Federal Government were
taxable as private business in
the District, it would probably
pay total taxes Of about $37 mil
lion. This would indicate that a
Federal payment Of between $37
million just mentioned and the
e47.5 million cited in the previous
paragraph could be justified with
out regard to other considera-
tons.
3. Washington attracts tax
exempt activities such as foreign
agencies. patriotic organizations.
and others. because 1t is the
Capital City. Each year more
property is taken of the tax
rolls. SIS million more of prop
erty (privately owned and for
eign government is exempt to-
day than just three years ago,
making a total of $187.1 million
such property that is exempt.
4. Building height limitations
are set to prevent any CONNER
cial structure from overshadow-
ing Federal structures, which
precludes the skyscrapers COM
mon to large cities. This limi-
tation holds down realty values,
likewise tax revenues. To show
the effect of this. Chicago In its
central business district has an
employment density of about
10000 persons per square mile
contrasted with 10000 in Wash
ington.
5. Many local residents main
tain their legal domiciles else
where and thereby entirely avoid
payment of District of Columbia
income tax. Also among Dis
trict residents are an extra
ordinary number of persons in
the military service who are ex-
empt from the District of CO.
lumbia income tax under the
Solder and Sailors Civil Re-
lief Act.
6. Many cities extend their
boundaries to include growing
suburbs. This obviously is not
possible here, but is particularly
pertinent to our problem in view
Of the fact that contrary to pop
ular opinion the income of Dis
trict residents is materially lower
than in the surrounding suburbs.
The income per family in 1945
and 1854 compares as follows: