The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1926-03-09
~ GEORGE BRITT

/.tSpeclal Correspondent
Washington, March 9.-All the ex-
pcctant nephews and nieces Of rich
uncles can give three cheers. The
new federal tax law stands ready to
put money in their pocket whenever
the relatives lamented demise makes
them his heirs.
For instance, the man on the street
car will be glad to learn that on all
the money he inhcrits above $4,000
600. he now will have to pay only
half as much tax as before. only 20
: per cent instead of 40.
Likewise, the hundreds of thou
sands who arc wondering how to pay
next months rent may we'll feel en-
outraged. They arc entirely relieved
If inheritance taxes on everything
hey receive up to 100000. The cx-
,mption on estates before was only
$4,000.
The gift tax, too. is all off. Here
tofore if one received present worth
more than $4,000 a tax had to be
paid on the excess. 1t was just q
nuisance around Christmas time. But
now, except for certain reservations,
it is perfectly safe to accept gift OF
as many million dollars as one pleases
without ASKING about tax.
Concessions 70 EAtAteS =
The rich uncle joke, of course, is
one Of the most ancient. But the
new revenuc act Of 1926 actually does
make important concessions to all
estates and heirs. Secretary of the
Treasury Mellon pointed out to Con
grcss that "the present muddlc OF
in some cases, take more than 1OC
per cent Of what a man leaves The
Senate proposed to eliminate the tax
entirely. The House prevented that
but the final notifications arc worth
having.
Outstanding changes in the law in
cludc these:
The exemption is increased from
$4,000 to 100000. This will entire.
~ly excuse about half of those who
had to pay inheritance tax under the
former act.
The maximum rate is made 90 pei
cent instead Of 40 per cent.
The minimum on the first $4,000,
beyond the exemption is l per cent
The credit for state inheritance taN
payments is made 80 per cent instead
of 25 per- cent. This means that
where an estate is subject to state
taxation as we'll as federal, that. 81
per cent Of the amount paid in fed
cral taxes shall be turned over tt
the state. for application to its tau
account.
Refunds are provided for estate
and gift taxes already paid under tht
old revenue act of 1924 for the
amounts by which those taxes eX
cceded the lower rates OF the preced
= ing act Of 1921. The 1921 rate reach
cd maximum offbut rs per cent
The new Jaw declares, in effect, tina
:. that is high enough and if anyscstat'
paid more it shall have its none!
~ hack. The same refund rate apple:
! to gift taxes paid since 1924.
Hard to Enforce
The old gift tax was intended Il
prevent cheating on inheritance ia,
by giving away property during life
III was hard to enforce. The ncv
law provides, in lieu of gift tax. tina
any property transferred within two
years before death without adequate
COMPENSATION shall be considered
within the gross estate Of the give
at death. The tax will be due. thu
same as if the gift had not beer
made.
The provision for "aying over t.
the states, if their inheritance tai
laws demand it. 80 per cent OF tn
federal tax collections. is INTENDED
!. to produce fairly uniform state tai
system. It works out practically in
to a scheme under which the fedora
collectors take 20 per cent tax OF
estates and give to the states 16 pc
cent for their taxes. This leaves onl.
4 per cent at the maximum for tn
government. The Senate contendc'
that this was not worth the expens'
Of collecting.
If the states have no inherltanc
tax law. the government will keel
the entire amount it collects on es
tatcs from those states. Opponent
of the provision denounced it as al
attempt TO coercc the states. Florida
which has constitutional ban Of
the inheritance tax, led the figh
against the federal tax. But stat
rights here met defeat.
TOMORROW: Auto Owners, Ciga
Smokers, Movie Patrons and boot