Excessive taxation by local government

Title

Language

English

Year

1949

Rights

In Copyright - Educational Use Permitted

Fulltext

ception of ? While some of our farmed areas are being utterly exhausted by years of cropping, always the same crop, producing harvests hardly worth the reaping, vast territories are still idle wilderness, spoiling for the will and labor and the implements of pioneers. With great wealth hidden in our lands and forests and mountains and seas, millions of our people hardly get enough to eat, and thousands are un employed and hundreds of thousands only half-em ployed. But some of our so-called leaders argue passion ately, but emptily, about who is to be allowed to do anything. Ranting about the protection of the patri mony, it is being wasted and lost. The living gen eration can have but little hope for a better future unless capital is enlisted and work is undertaken, no matter by whom. According to a recent Associated Press dispatch from Washington, the chances that President Tru man will ask Congress to provide adWar Damage ditional funds to the Philippine War Payments Damage Commission to be used for larger payments for private and pub lic war claims, appear to be slight, although it was emphasized, too, that the President still has the mat ter under consideration. We hope that the President and members of Con gress will realize that the War Damage Commission has been able to pay only approximately 30% of dam age payments approved, and that the amounts ap proved are themselves admittedly way below present replacement costs, valuations being calculated on pre war costs less depreciation, there being, furthermore, broad classifications of losses which, under the law, may not be paid for at all. The result has been that many claimants have received damage-payments so small in proportion to their losses that it has been impossible for them to re-establish their wardestroyed enterprises. The foregoing is true only on the medium and large-scale enterprises,—small losses (under P1000) have been or are, under the law, being paid in full, but these are just the type of payments which, though important enough to the individuals receiving them, do not figure greatly in the rehabilitation of Philip pine industry. We have been informed that if another P100,000,000 or so were made available, the 30% payments to the larger losers could be increased to around 75%, and this would make a more than proportionately great difference to the industries and enterprises af fected. We hope that this will be understood in Wash ington. The memorandum on Philippine investment prob lems, submitted to President Quirino at his request by an American Chamber of ComExcessive merce committee and published in Taxation by substance elsewhere in this issue Local Government of the Journal, made no direct re ference to the increased taxing powers of the Manila City Government under the new Charter, and we are pleased, therefore, to pub lish the following suggestive statement on the subject received from a member of the Chamber: One of the drawbacks to both foreign and do mestic investments in economic development projects is the fear of excessive taxation by local governments. Even with the limited taxing power vested in munici palities, they still have the power to make or break a business enterprise. The recent amplification of the taxing power of the City of Manila highlights the fear felt in some investment circles. We do not assume that a local government will abuse its taxing power. We have too much faith in the principle of local autonomy to entertain such an assumption. Yet Philippine history records some examples of the killing of the goose that laid the golden egg. Dependent as local governments are on hand-outs from the central government, there is steady pres sure to raise more taxes. Once a large enterprise has already made a heavy capital investment, has given employment to hundreds or thousands of local citizens, and seems to be prospering, it becomes a tempting target for local revenue-raising ordinances. The local officials are quite aware of the fact that a fixed plant cannot afford to move to a more taxfavored locality, so little by little the impositions tend to grow. Inspection fees, license fees, and mu nicipal taxes are all resorted to, to help the local gov ernment balance its budget. To the American investor, particularly, this at titude is disconcerting, because it is so different from what he has experienced. The dispersion of indus try to small communities in the United States during the past century has been largely the result of induce ments offered by the local communities. Local of ficials join with civic and business leaders to “lure” industries to their town. Generally a free site is of fered. Tax guarantees are made and observed. As a result, employment increases, retail trade expands, land values increase, and every element of the com munity enjoys greater prosperity. Hence, too, the revenues of the town from all sources increase, with out the need to bleed the enterprise which has brought this increased prosperity and tax revenue. Perhaps if local governments were granted authority to make “tax treaties” with industries they wish established in their midst, there would be greater incentive to private investment in industry, and with it a healthier geographical distribution of industrial employment. Appointment of the War Claims Commission Welcome to many Americans in Manila who were interned by the Japanese during the war, was the announcement that on July 29, President Truman had nomi nated the members of the War Claims Commission authorized by the War Claims Act, ap proved July 3, 1948, — more than a year before. The persons nominated are: Daniel J. Cleary, of Illinois; Mrs. Georgia L. Lusk, of New Mexico; and David N. Lewis, of New York. Both men are lawyers and Air Force veterans. Mrs. Lusk, a for mer Congresswoman, lost a son in the war. Rumors which circulated in the Santo Tomas Camp were that President Roosevelt had been heard to promise over the radio that internees would be given a per diem of $10, payable immediately after liberation, but in addition to the fact that the aid is being so long delayed, is the fact that the “detention

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