Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-31
|GA|N FOR D. c. SEEN
in INHERITANCE TAX
Local Government Could COL
Iect 80 Per Cent of
Federal Levy.
Continued From First Page;

emption Of 100000. In addition "a
this exemption, the Federal law allows
various deductions. such as executors
commission, attorney fees. miscella-
neous expenses of administration, debts
owed by the decedent, mortgages on
real estate, property previously sub
jected to estate tax within five years,
property left to charity, science or edu-
cation and deduction of $4,000 for
insurance left to specific benef1ciaries.
Figures gathered by the assessors
Office indicate that the States have
! gone considerably under 100000 in
fixing the initial exemption in their
local laws in most cases, so that
District inheritance tax, if modelled
after the States, undoubtedly would re-
quire some tax from smaller estates
that are not affected by the Federal
statute. Local officials have given no
| intimation as to what they have sug-
gested to the congressional probers in
the way Of initial exemption or other
deductions.
Collection in District.
Since estates that run beyond $780,
900 in value are already subject to the
| Federal law in Washington as else
where, and would be credited with
| amounts paid locally up to 80 per cent
| these cases would be affected only in
| the event that local tax amounted TO
more than the 80 per cent credit.
In the absence Of a local law, the
| Federal Government now collects the
| full amount of the Federal tax levied
| on estates above 100000 in Washing
| ton, and figures in the annual reports
| of the commissioner of internal reve-
nue. show the following collections from
the District of Columbia under the
heading Of estate tax: In 1926, $780,
| 932.52 1927, $l,7l7.34l 08; 1928, $685.
| O6836.
Officials of the Internal Revenue
Bureau explain that when a death oc-
ours the Federal Government proceeds
J to figure cut what the tax will be under
the Federal law if the estate is above
J 100000. The 80 per cent credit is not
accomplished by means of any transac-
ton which takes place between Uncle
Sam and the State. but when the es-
| tate is paying its tax to the Federal
Government, the executor or other rep
resentative presents proof OF State taxes
already paid, and credit Is allowed fox
| the amount of such tax actually paid,
| up to the limit of 80 per cent of what
| is due the United States.
Federal officials say most OF the
! States have arranged their statutes SO
as to get the entire 80 per cent which
! the Federal Government allows. In
number OF States, they explain, 1t i
accomplished by having two laws.
Changed in 1925.
| The first is in the nature Of a legacy
| tax. figured on the amount to be re-
/ ceived by the beneficiary. and allows
! much smaller exemption than the
Federal law. Meanwhile. the United
| States is figuring out what its tax
will be If the estate is large enough
to be affected by Federal law, and many
| OF the States have a second law under
which they take the difference be-
tween the amount already levied under
! the legacy tax and 80 per cent of the
! Federal tax. In this way these States
assure themselves of the entire 80 per
cent which the Federal Government
gives the taxpayer credit for.
| Prior to 1925 the Federal law al
| lowed the taxpayer credit for State
taxes paid only up to IS per cent. In
that year there was considerable de-
mand for reduction of Federal taxes,
| and a concession was made to the
| States in the field of estate taxation
by raising the credit to 80 per cent.
1t was at that time also that the ex-
emption from Federal estate tax was
raised from $4,000 to 100000.
The Federal Government has been
collecting the entire amount of its
estate tax in Florida and Alabama also,
but, according TO advices recently re-
ceived by the Internal Revenue Bu-
! reau, Florida is about to inaugaurate
q State tax.
| Representative Frear of Wisconsin.
| who is a member of the House COM
mittee now studying fiscal relations. in
troduced a bill year ago seeking to
| establish an inheritance tax in the
| District. This bill contained detailed
| schedule of exemptions and rates, de-
pending on the degree of relationship
Of the beneficiary as well as the value
OF the property.
Wants Study by People.
Senator Bingham. who handles Dis
trict appropriation matters in the Sem
ate, Is refraining from comment on pro-
posals being suggested while the House
inquiry is in progress, but he said that
in view of the studies being made and
| the statement that new forms OF taxa
| ton may be advanced, lit would be ex-
| tremely wise for the people of the Dis
| trict, through their civic bodies. to
study the matter and make recon-
mendations to Congress regarding the
way In which they would prefer TO be
| taxed, and whether fairer method OF
i
in effect
Senator Bingham said the sugges-
! lions which have been made intimately
concern citizens of the District and 1t
would be helpful to Congress to re-
ceive we'll matured and carefully con-
sidered views of the various civic
bodies" Calling attention to the con-
stitutional duty of Congress to eXer-
else exclusive legislation over the Dis
trict, the Senator said that until the
Constitution Is changed this is the only
way the views of the taxpayers can be
ascertained.
The Senator said it had come to his
attention that some members Of Con-
greSs have feeling that resolutions
passed by organizations sometimes rep
resent limited number. He said he
wanted to stress the importance OF Civ
ing wide publicity to meetings where
these matters are considered.
Senator Bingham was chairman OF
the Senate conferees who last year led
the fight to have the Federal Govern
ment increase its contribution to the
National Capital in view of the extent
to which the total of the District bill
has increased in recent years. The
Senate was successful in having the
Federal lump sum increased from So
O00, 900 to $9,500,000 for the current
year, following which the House Gre
ated its special committee to study ifs
cal relations and taxation. Pending
the outcome of this committees work
the last session continued the s9.500,-
900 lump sum in the appropriation bill
for the next fiscal year.