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I think that is for instance, houses that have sold for a long perioi of time for five thousand dollars or fifty-five hundred dollars, have been selling for eleven and twelve thousand dollars, and that, to me, is ridiculous because it was simply caused by the necessity of buying housing and not buying real estate.

Another thing, I think that we have got to bear in mind in the District, and the thing that worries me quite a little, and that is the fact that the amount of available land in the District of Columbia is very, very small. What is left is topographically rough, and consequently, when this building program starts, which we all know it will some day, I think that the majority of building is going to be in the metropolitan areas. There is very little land left in the District to build upon now. The result of that, as far as residential properties are concerned, is that they are getting older and older, and because of depreciation and obsolescence, the original city is becoming more blighted all the time. It is one of the reasons for the establishment of the redevelopment agency, so that in the future residential properties in the District, in my opinion, have got to be on a downward trend, because persons are going to move out of these old houses when new houses become available, and they are going to buy in the metropolitan area, and I think we have got to be very careful in imposing taxes on the people in the District that will have a tendency for them to move outside of the District.

Now, I have any number of inquiries that have come to my office through the mails of persons who contemplate the purchase of homes, and they are asking just what taxes they have to pay in the District of Columbia so they can compare those taxes with what they will have to pay in Maryland and Virginia.

Now, if you ride through the District of Columbia, and I certainly am not trying to sell the District short, because I have lived here all my life, but these older houses are becoming older all the time, they are becoming obsolete, and persons are going to move from those houses into newer homes, and the newer homes are going to be avail. able in Maryland and Virginia, if you please, and very few in the District of Columbia.

Mr. BATES. To get away from that question for the moment, I want to reconcile some figures here, Mr. Dent, which you sent to me on this schedule of real-estate assessment, taxable in the United States, District of Columbia, and privately owned, exempted. I just want to reconcile the area of the District with the so-called Overton-O'Mahoney formula.

Inasmuch as we have a bill relative to Federal payments before the committee, which we are not going to go into at the moment, I would like to reconcile these figures because the Overton-O'Mahoney formula is based on a certain area in the District, and it does not check with the area that you give me on your schedule. Have you got an extra copy so that you can show it to Mr. Dent, please?

Mr. Dent, take this copy; it is the total land area of the District of Columbia of 39,000 acres.

Mr. DENT. Yes, that is the total area, Mr. Bates.

Mr. BATEs. Now then, on your schedule here, this is a statement of real-estate assessments, practically 31,000 acres.

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Mr. DENT. Well, the difference is 8,000 acres in streets and alleys; 39,273 is the total area of the District of Columbia, exclusive of water area, and the statement I furnished you excludes streets and alleys.

Mr. Bates. But for the purposes of the formula, of course, streets and alleys are thrown in.

Mr. DENT. Yes, sir.

Mr. BATES. I see. And it does not state what percent of those streets and alleys are in the so-called District area and what in the Federal area; it does eliminate the park area of the District of Columbia, and the United States land owned by the District of Columbia.

Mr. DENT. That is the formula that was made up by the gentlemen, I think, that were appointed by the Senate committee.

Mr. BATEs. They were appointed by a Senate committee, were they?

Mr. Dent. Yes, sir; we had nothing to do with that formula.

Mr. BATEs. So this discrepancy is due entirely to the streets and alleys.

Mr. DENT. I do happen to know they used the entire area of the District of Columbia, and the figure I gave you did not include streets and alleys.

Mr. BATEs. All right, Mr. Dent, you can proceed in any way you desire.

Mr. DENT. Well, getting back to the revenues, I will give you some figures on the progress of revenues in the District of Columbia under present legislation, and start from the fiscal year 1940, because that was the first year we had the benefits of the new revenues, income tax, and in 1940 real-estate revenues amounted to $21,400,000.

In the present fiscal year the revenue is $24,430,000. "Now, that is based on the actual assessed valuation.

Mr. Bates. That is what it was in 1947? I want to get those in the schedule.

Mr. DENT. We have not completed the fiscal '47; we do not have the total collections.

Mr. BATEs. Your last figures is '46?

Mr. DENT. I can give you the amount to be collected in '47; that is $24,430,000.

Mr. Bates. That is your estimate?

Mr. Dent. That is estimated on the current assessment, but in the budget we carry actual collections, which included not only the current tax, but the payments received for prior years.

Mr. BATES. Yes. What is your total estimate from real estate for 1947?

Mr. DENT. For 1947 I think, it was $24,630,000.
Mr. Bates. That is what you had in 1946.

Mr. DENT. Then, it was $24,700,000. That is in the budget, Mr. Bates.

Mr. Bates. What is your estimate for '48? Is that from the same source?

Mr. Dent. Well, in the budget, which we made up in September, we carried $27,000,000.

Mr. BATES. And that is based on the revaluation ?

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Mr. Dent. No, sir, it is not. As Mr. Fowler explained to you yesterday, we have revised that estimate on account of the revaluations to $28,350,000.

Mr. BATEs. All right, go ahead, Mr. Dent.
Mr. DENT. Now, the first year in income tax—-

Mr. Bates. Let me say at the outset that that showed a change in 10 years or 11 years from '37, of taxes from realty of $17,489,000 to an estimate of $27,000,000 this year; is that right?

Mr. DENT. Yes, sir. What was the figure you stated? Mr. BATES. $17,489,320; that is 1937. Mr. DENT. $17,167,000 was the original levy, but that was based, Mr. Bates—do not forget, Mr. Bates, in '37 we had a dollar and a half rate, and we went to $1.75 rate in '38.

Mr. BATEs. That is right. But nevertheless, they are taxes from that source.

Mr. DENT. That is true.

Mr. BaTEs. And you had one increase in the rate, and that increase took place in '38, $1.75, and that rate has remained constant up to the present time.

Mr. DENT. Yes, sir; that is correct.

Mr. Bares. In values, however, it substantially has increased during that period of time.

Mr. DENT. Values increased by $250,000,000 from 1937 to this fiscal year, and our new valuation for 1948 will be $1,578,000,000 against a valuation in 1937 of $1,144,000,000.

Mr. Bates. That is right. Most of that is probably due, of course, according to the information you have already given me to new values. There has been revaluation, but most of that is due to new values.

Mr. DENT. When you speak of new values, you mean new construction.

Mr. BATES. Yes.

Mr. DENT. I would not say most of them, because in this last assessment of '48 we have increased the valuation on existing properties by $182,000,000.

Mr. BATEs. I mean up to the present time.

Mr. DENT. Up to the present time, yes; although we have made very substantial increases. We increased business properties several years ago in the central business area about eight or nine million dollars, I think it was. Of course, these figures, Mr. Bates, as I explained to you before, these levies are net levies. I think I furnished you some statements showing that we may put on $50,000,000 in new construction and lost $15,000,000 by Government acquisitions.

Mr. BATES. That is right.

Mr. DENT. So, you have got to take into consideration that the net figures do not include the losses.

Mr. Bates. That is right.

Now, at this point, you might put into the recor:] the ralue. the assessed value, if they are assessable. properties of the Federal Gov. ernment in 1937, and the figure of today, showing what has been taken out of taxation.

Mr. DENT. Well, in 1937- you want percentage of area?

Mr. Bates. Do you have values here, total values of United States property, June 30, 1947, of $649,000,000; is that right?

Mr. Dent. Which year are you referring to now, sir? Mr. Bates. 1937, June 30. Mr. DENT. $649,000,000. Mr. BATES. Now, the same figure is $711,916,000, June 30, 1947. Mr. Dent. Yes, sir. Mr. BATEs. What percent increase was that? Mr. DENT. I do not have that, Mr. Bates. I will be glad to work hose percentages out for you. Mr. BATEs. It was increased $62,000,000. Mr. DENT. That is correct; about 10 percent.

Mr. Bates. Now, then I think at the same point in the record, you might put in the tax that would be assessed on that property as of June 30, 1937, at the present prevailing rate, $9.739,956 if you assessed at the local rate, and the same figure would be $12,458,543 on June 30, 1947, at the prevailing rate of $1.75 ?

Mr. DENT. That is right.

Senator FLANDERS. May I inquire whether, Mr. Chairman, the valuations are on the same basis for public property and private property?

Mr. DENT. Yes, sir. I might say this, Senator, that for ordinary Government buildings they are. In the case of this Capitol Building right here we have nothing to compare it with. Senator FLANDERS. Anywhere in the world.

Mr. Dent. You can put any valuation on this building. What it is, I do not know.

Mr. Bates. These values embrace not only the land that the Government has taken out of direct tax properties, out of tax rolls, but also embraces the estimated values of the buildings that were placed on those lands subsequent to the Government's taking the property over; is that right?

Mr. Dent. Well, of course, yes; if the buildings still remain as they were.

Mr. BATES. Well, let us take the situation where the Government acquired a lot, a certain parcel of land, in the so-called, let us call it,

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wish, or depressed area of the city, tore down a lot of buildings, erected a $25,000,000 building.

Do these figures relate to the old assessed values at the time the Government acquired the property, or do they relate to the improvements?

Mr. DENT. They relate to the existing conditions at the time that the assessment was changed from private ownership to public. In other words, if the Government condemned a whole square of houses we would simply transfer that existing valuation as taxed to a private individual, over to Federal; if the buildings were torn down those buildings would be eliminated and the land would be shown. When the Government built a new building on it, then we would put a new building on it against the Government on the same basis that we would put it on if it was a private office building:

Mr. BATES. So every building built by the Government since 1937 is listed there as to what would be considered the fair value.

Mr. Dent. As if it was owned privately.

Mr. BATES. How do you arrive, for instance, at let us take the Mellon Library.

slum area,

Mr. DENT. Cubical content.
Mr. BATES. Is that in this list?
Mr. DENT. Yes, sir.
Mr. BATES. How would you arrive at that?
Mr. Dent. The first thing we would do is get the actual cost.
Mr. BATES. What is that?

Mr. DENT. Actual cost of the building, which we do in all cases, office buildings and what not, and then we put on the same cubical factor that we put on a comparable building.

Of course, when you get into some of the monumental structures built by the Federal Government, you necessarily have a high cubic factor, higher than you would have in an ordinary office building on account of its monumental nature.

Mr. BATEs. Now, all these frame buildings that have been built during the war on the Mall and Independence Avenue and other areas, barracks; are they all within the assessment?

Mr. Dent. Yes, sir.
Mr. Bates. That is all. You can proceed, Mr. Dent, if you wish.

Mr. Dent. Now, going back to 1940, the first year that we had the individual income tax, we received $1,319,000 revenue from that source. That has gradually increased until the last fiscal year, 1946, we now realize $3,947,000 from that. The personal property tax in 1940 gave us a revenue of $1,485,946; that tax was increased to $3,472,000: that is exclusive of the personal property tax on motor vehicles, which averages around a million dollars a year, and there is very little change in that from time to time.

Now, inheritance and estate tax laws have been in effect since the same time, and that yield fluctuates and is very difficult to estimate because it depends on how many persons die and what the value of the estate is. That runs usually anywhere from a million to a million and a half.

Now, the corporation income tax, we received $956,000 from that for the first year, but that is not a fair figure because some of the corporations were on a fiscal-year basis, and we did not realize the full extent of that tax until the following year, 1941. But after that first year it was a little over $2,000,000, and that tax has gone up to $5,274,000, a considerable increase.

While we are on that subject, I would like to say we have proposed that that tax should be placed on unincorporated businesses. The corporations now pay 5 percent tax; unincorporated businesses may not pay any tax for the reason that, being unincorporated, the owner's of the business may live in Maryland and Virginia, and therefore are not subject to the individual income tax; consequently, you have what I think is a very inequitable situation of two businesses, same kind, same block, one pays a 5 percent corporation tax and the other pays nothing, although they both receive the same services from the District of Columbia, and that is the reason we have proposed that the income-tax law be amended to place a 5 percent tax on unincorporated businesses as well as corporations.

Now, the individual income tax, Mr. Bates, as you know, is predicated on domicile; that also, in my opinion, is inequitable. Originally,

; it was proposed in 1939 when that law was passed that it be based on residence. At the present time we receive about 88,000 returns

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