Evening star., 1925-02-19
President Advocates Policy
of Federal Governments
Gradual Withdrawal.
SEES CLOSE APPROACH
TOWARD CONFlSCATION
Com bination of States With Nation
Sometimes Makes Total Collection
Exceed Actual Value.

Gradual withdrawal of the Federal
Government from the inheritance tar
feld and greater economy in tax col
lection were recommended for public
| consideration by President Coolidge
in an address at the opening session
Today of the National Tax Associa-
tons national inheritance and estate
tax conference.
The President condemned the pres
ent Federal inheritance tax, amount
ing in its highest bracket to 40 per
. cent, declaring that in some instances
1t, with the State levies, closely ap-
proaches, IL it is not actually. con-
fiscation."
If we are to adopt socialism n
should be presented to the people of
TINS country as socialism, and not un-
oer the guise of a law to collect
revenue, he said The people are
quite able to determine for them
selves the desira bility of a particu-
lar public policy and do not ask to
nave such policies forced upon them
! by indirection."
! Economy In Revenue
establishment of "economv in IN
come Of revenue" is an equal neces-
slty with economy in outgo of revenue,
nr. Cooldge said, adding that the
! Irst neld for the practice of economy
IN inheritance tax collections Law in
state cooperation.
declaring there is competition be-
tween states to reach in inheritance
takes not only the property of its own
cltlzens, but the property of citizens
OF other States" the President. bv
way OF illustration showed how
snare of stock upon death of its
| owner might be made subject TO
seven separate and distinct inherit
ance taxes by the Federal and various
State governments.
May Exceed PRINCIPAL.
All this means" he added. mot
only an actual amount of tax which
may under particular circumstances
| exceed 100 per cent of the value of
the stock. but the expense. delay and
inconvenience OF getting clearances OF
the states who claim a right to tax
! the property is a serious burden 10
the heir who is to receive the stock
Particularly is this expense dispro-
portionate to tax paid by a small
estate which has but a few shares of
stock. In many cases the expense
alone must exceed the total value of
the shares which it is sought to trans
fer. Looking at it from the stand
| point of State revenue | am told it is
probable that the full cost to execu-
tors of ascertaining the tax and OBJ
tanning the necessary transfers Is in
the aggregate nearly as much as the
tax received by the States upon this
property of nonresident decedents.
| Here, indeed, is extravaganza in
! taxation"
The Presidents Speech.
The Presidents speech in full follows:
Acknowledgment is due to thu
National Tax Association for a real
public service in bringing this con-
ference together. The subject OF
taxation is at all times and in all
its phases difficult and complex. 1t
may be doubted If any of its aspects
present more difficulty, or more
sharply challenge our practical ex-
perience or economic judgments, than
that which concerns taxation of es-
tates of decedents.
when, on June 2, last. I signed the
/ revenue act OF 1924 l adverted briefly
to this subject of inheritance taxes.
BY that act, the highest bracket Of
Federal estate tax was raised from
25 to 40 per cent. l pointed out then
that when the inheritance taxes lev
led by the States be added to this, a
substantial confiscation of capital
may result; and L suggested the
!
Federal Government thus com bining
to get the utmost possible revenue
| from inheritance taxes. To take an
excessive proportion of estates in
this way for the costs of Government
| can only mean that Government will
be living off the capital of the com
munity. This we should seek to
avoid. Therefore, I suggested that it
might be better If the field of in
| heritance taxation could be left to
the States. Realizing. however, the
great practical difficulties, l sug-
gested that a conference of State
| and Federal taxing authorities be
| held to consider the whole subject.
Extravaganza In Collection.
Taxation is the means employed
! by a State to obtain the revenue with
which to conduct its necessary oper-
ations. State may be extravagant
| in the way 1t spends its revenue. so,
too, extravaganza may exist IN the
| way it collects its revenue. l nave
| often urged economy in outgo OF
revenue; lit is equally necessary
that we establish economy in income
| of revenue The burden of taxation
| is not what the State takes. but what
| the taxpayer gives.
"The first field for the practice OF
| economy in inheritance tax collectlon
| lies in state CO O-OpeIdtloi. lhcio -
competition between States to reach
| in inheritance taxes not only the
property of it's own citizens, but the
property of the citizens of other
States which by any construction can
be brought within the grasp OF the
| tax gatherer. A share of stock repre-
/ sents a most conspicuous example of
multiple inheritance taxation. 1t Is
possible that the same share OF
/ stock. upon the death of its owner.
Emay be subject to taxation, first, by
/ the Federal Government; then by the
State where its owner was domiciled;
! then by some other State which may
/ also claim him as a citizen; again in
| the State where the certificate of
stock was kept; in the State where
the certificate of stock must be trans
ferred on the corpora tion's books; in
the State or States where Is organ
lied the corporation whose capital
| stock is involved; and, finally, in the
State or States where this corpora
| tion owns property. All this means
| not only an actual amount of tax
| which may under particular circum-