Evening star., 1925-10-24
Estate Take. State and Federal.

| into action yesterday and opened fire
/ mittee. now considering revision OF
| the revenue laws. The governors of
| six States in person and the repre-
sentatives of eleven others argued for
! a change in the law.
The opposition to the Federal estate
or inheritance tax comes from two
angles. There are those who insist
that this field of taxation and revenue
should be left To the State gov N
mentS. There are those opposed To
| the principle Of The estate tax, belieN.
,, ing that the tax should he greatly re-
duced. or wiped out entirely.
The principal interest of the gov
| ern0rs however. CenterS in obtaining
| for the States the exclusive privilege
of taxing estates Of their citizens.
! They point out that States provide the
machinery for handling the estates of
! decedents, which the Federal Govern
| ment does not do. The States were
| first in the field of inheritance taxes.
! too, for the Federal law did not come
into effect until World War times.
! They emphasize the need of additional
| revenues required by the States TO
meet the demands for more schools
and better government generally. They
attack the plan OF State and Federal
| taxation of estates on the ground that
it is in measure double taxation.
and distasteful TO the people.
The Federal estate law exemptS es-
ates of less than $4,000 from this
tax. From $500 to 500 900 the tax
levied is at the rate OF l per cent.
From that point on, however, the tax
is graduated upward until 1t reaches
40 per cent on estates of more than
$40 900, 900. The Federal law also al
lows a credit on the Federal tax on
account of State inheritance taxes up
to IS per cent.
1t has been proposed as compro-
mise-and the proposal seems sound
that the credit allowed on the Federal
estate tax on account of State Inherit
ance taxes be increased to IS per cent,
or even to 100 per cent. Such a plan,
it is believed by its supporters, would
| result in causing the States to bring
about greater uniformity in their es
| tate taxes, and in causing those States
which either have no inheritance tax
or a mere nominal tax To amend their
laws.
Opponents OF repeal of the Fedora
would result in a scramble by the
States TO reduce or lift their own es-
tate taxes so as TO attract the owners
of large fortunes. The case of Florida.
which not only does not have an es-
tate tax, but has placed a provision
in it's constitution that no such tax
! shall be levied is cited to show the
! lengths to which State NAV so 10
advertise itself and TO draw wealthy
! persons within its borders.
Here in the District of Columbia the
! only estate tax levied is the Federal
tax. If the advocates of repeal of the
Federal estate tax should be success
| full, doubtless Congress, which enacts
all the laws for the National Capital.
would impose an estate tax on Dis
; trict residents.
The soundness of Ievying tax on
| inheritances has many times been
| questioned and defended. In meas
| ure 1t Is capital levy On the
| other hand, 1t is well understood that
taxes are not levied for the pleasure
! of the taxpayer, but TO raise the rev
enue required 10 maintain govern
/ ment and to give protection to the
| citizens of State and Nation. Many of
the heaviest taxpayers in reality OBJ
| tain greater benefits from the protec
| ton Of their property than the owners
! of little or no property, simply be-
| cause they have more property to
| protect. In many of the States which
| levy estate taxes the degree of con
sanguinity of the beneficiaries to the
| decedents Is taken into considera ton.
The closer the relationship the lower
| the tax rate.