Evening star., 1931-12-17

gifts of freedom and home.
District of Columbia estate tax bill are
very similar to the rates now In effect
i'll the Federal estate tax law. Pre-
sumably the rates would be applied 20
the same property by both the experts
OF the Internal Revenue Bureau and
the tax assessor OF the District of Co.
lumbia, for the Federal and the Dis
trlct estate taxes, respectively. As the
rates are very nearly alike, lower in
some instances and higher in others il
has been estimated that the District
Of Columbia estate tax instead of be-
ing about 80 per cent of the Federal
tax levy, would be, to the contrary,
somewhere nearer 80, 95 or 100 per
cent of the Federal levy. This would
place an additional burden on the es-
tate because only 80 per cent Of the
total Federal levy could be credited to
the District of Columbia.
In other words. to take a specific eX-
ample, it has been suggested that a
hypothetical problem might work out
as follows: Suppose that the Federal
Government fixed an estate tax levy of
100000, Of which the 80 per cent
credit to the District would be $50. .OOO
Suppose that instead of the high rates
of the present bill, the local law re-
Stricted the local estate tax to the 80
per cent. Then the taxpayer would pay
$4,000 to the District of Columbia and
$4,000 to the Federal Government, sat-
lsfylng both with a total of SlO0 900,
which was the exact total of the Fed
eral levy. AS matter of fact, estates
in the District of Columbia now are
Federal of 70 hI,t u,;tl
out contributing any part Of it to the
District of Columbia.
D.. C. Situation Different.
Instead of the above example, how
ever, 1t has been figured cut, using the
rates Of the new District of Columbia
estate tax bill, that an entirely differ
ent situation would exist when the local
executor came to settle with the Dis
trict and Federal authorities Suppose,
for instance, that the Federal experts
fixed levy of 100000 tax. of which
the 80 per cent credit to the District
would be $4,000. The District tax as
SCISSORS. with almost the same rates as
the Federal Government would have to
fix, not the 80 per cent. but much
higher figure, probably nearer s5 per
cent amounting to about $4,000. The
eral Government the regular 20 per
cent or $4,000. and also pay the Dis
trict of Columbia S95OOO. which would
bring the total up to Sll5.000. or SIS, 900
in excess of the total Federal tax levy.
This example shows, it was pointed
out, that under the new District of
Columbia estate tax law the local es-
tate, instead of dividing the total Of
the Federal levy between the Federal
and the District Government, with
total OF 100000 would be forced to
pay an additional $4,000 to the local
government, or total of $115.00O. In
other words, he would be forced by the
District to pay $4,000 which could not
be counted as exemption by the United
State Bureau of Internal Revenue. It
is just this kind of $4,000 extra which
some other States have specifically
prohibited in their own estate tax laws.
1he"e may be exceptions. 1t was ad-
m tied, in the cases of some States
where the local inheritance tax rates on
smaller properties are much higher
than the Federal rates, and this would
oImg the local contributions above the
80 per cent Federal credit But the
general principle of balance, 80 per cent
to the State and 20 per cent to the
Federal Government, is becoming so
firmly established as States enact
further estate taxes that the new
District of Columbia bill has occasioned
surprise by putting the shoe on the
other loot, SO to speak
Bill Allows Excesses.
Instead of guaranteeing that no more
than 80 per cent of the Federal lew
shall be exacted for local estate tax,
the bill makes it mandatory to extract
at least 50 per cent and leaves the gate
wide open for the application of rates
to let the local estate tax soar far be-
yond the 80 per cent
the similarity of the proposed Dis
trlct OF Columbia estate tax rates with
those OF the present tax law can be
easily seen by the following table taken
from the new bill and the present law.
Ihe classes are somewhat different.
Net estate not in excess of $5O.O00, l
per cent for both local and Federal tax.
Between $500O0 and 100000, 2 per
cent for both
Between 100000 and 5000 900, 3 Der
cent for both.
Between 100000 and $500 900, 4 per
'ent for the District; between 5000. 900
md 100000, 4 per cent for the Federal
evy
ID. c. Rate Held Higher.
Between S3GO,OOo and $4,000 S per
;ent for the District; between S400 900
md 100000, 5 per cent for the Nation.
This shows the Sctween 100000 and
100000 the new lcccl rate would be l
Der cent higher than the present Fed
raj rate.
Between s5OO0OO and $750,0O0, 6 per
ent for the District: between $500 600 |
md 100000, 6 per cent for the Nation. |
Between s750,O00 and $l,250,000, Z
YER cent for the District: between
100000 and 100000, per cent for |
he Nation.
Between s1,25o,ooo and $4,000 900, 8
'er cent for the District; between
i 100000 and 81 ,5000 900, 8 per cent for
he Nation; between $l,5OO.OO0 and
100000, 9 per cent for the Nation.
Rate Classified.
Between $2,0OO.O00 and $4,000 900. 10
er cent for the District; between
, 100000 and $2,500000, 10 per cent
or the Nation ranging up to ii per
ent for the Nation for estates between
100000 and $5,000,0O0.
For all net estates over IS 900, 900 the |
district bill would impose a rate of is
yer cent, while the Federal rates are
raduated in brackets from Is per cent /
n up to as high as 20 per cent for
1000, 900 and over.
Further ground for r,,op;c1or ~ $ha