Evening star., 1925-02-19
END OF INHERITANCE TAX
FAVORED BY MR.. COOLIDGE
CONTINUED from First Page.)

Y CONTINUED from First Page.)
clearances of the States who claim a
right to tax the property is a serious
burden to the heir who is to receive
the stock. Particularly is this ex-
pense disproportionate to a tax paid
by a small es ate which has but q
few shares Of stock. In many cases
the expense alone must exceed the
total value of the shares which it is
sought to transfer. Looking at it
from the standpoint of State revenue,
am told 1t is probable that the full
cost of executors of ascertaining the
tax and obtaining the necessary
transfers is in the aggregate nearly
as much as the tax received by the
States upon this property of nom
resident decedents. Here, indeed, is
extravaganza in taxation.
Getting State Co-Operation.
"A solution of this problem presents
the difficulty Of obtaining reciprocal
action on the part of the States
feel, however. that, in fairness to each
other and to their taxpayers, some
way will be found of obviating this
extravaganza by giving up entirely
the collection of taxes upon personal
property Of resident decedents, or
by the imposition upon the transfer
Of such property Of a tax extremely
simple in administration and low in
amount.
THE second field of extravaganza
| in the collection of taxes-a wrong
system-rests. not with the States
alone but there must be included also
the Federal Government. 1t matters
not in this particular who levies the
tax, but the sole question is whether
! the total of all taxes collected is sc
excessively high as to be economically
unsound. There are, as l have said
| circumstances where the aggregate
of estate and inheritance taxes may
! exceed the value Of the property left
| by the decedent. This is not usual
| but we have come to a point of estate
| and inheritance taxation, reaching, as
| it does, 40 per cent in the Fedora
law and perhaps higher in some
! States, where the total burden closely
| approa ches, if 1T is not actually, con-
| fiScation.
II do not believe that the Govern.
| ment should seek social legislation in
the guise of taxation. We should ap-
proach the questions directly, where
| the arguments for and against the
proposed legislation may be clearly
presented and universally understood
|
| be presented to the people of this
country as socialism, and not unde,
| the guise of law to collect revenue
| The people are quite able to deter
| mine for themselves the desirabiliy OF
a particular public policy and do not
ask to have such policies forced upon
them by indirection. Personally, 1 dc
not feel that large fortunes properly
| managed are necessarily a menance
| to our institutions and therefore
ought to be destroyed. On the con-
trary. they have been and can be OF
great value for our development. In
approaching the second field of ex-
travagance, J, therefore shall not
| consider inheritance and estate taxes
| as social effort, but as a revenue
measure.
Take Part of Capital.
'Differing from income taxes, which
are deductions from what taxpayer
| makes each year, and payment for
which presumably can be made with
| out hardship. inheritance and estate
| taxes are capital taxes. they take a
part of the accumulated capital of the
| nation. This capital Is not usually
represented by cash or readily mar
ketable securities, but it may be a
| business built up by the decedent
| through his lifetime, or property long
| held, for which there is no immediate
| market. In consequence, to pay in
her1tance and estate taxes in cash
executors must sell the property
| which comes into their hands at wha,
| is equivalent to forced sale with
the usual consequences of loss in
value. l venture to say that for exec
| utors to pay 40 per cent tax they
q tn ;,,
ordinary large estates probably sc
per cent of the appraised value of the
estate.
The effects of these excessive
taxes are twofold: First, they tend
to lower values throughout the coun-
try by reason of forcing upon the
market securities which cannot be
readily absorbed, thus lowering the
very level of values upon which in
heritance and estate taxes are actu-
ally based. Secondly, they take away
the inspiration to work in order to
build up a business or create a prop
| erty. 1t is difficult to overestimate
the contribution to the progress of
this country made by the man of abil-
ity actuated largely by this motive to
protect the future of his family If
I America had not been free to any
man to make his fortune within the
law and within his abilities, we would
not be the great Nation we are today.
To destroy incentive is to lessen the
| production and the prosperity of the
country.
Let me summarize before passing
| to the second object of the present
| conference. The burden of taxation
is one from which relief must be
found. 1t touches directly and indi-
rectly all of our citizens. The most
obvious field of economy is for the
| Government to spend less. 1t is, how
ever, equally desirable that the bur
den put by the Government on its
citizens be productive Of Government