Evening star., 1932-03-31
The District Estate Tax.

CtdI ulCdiIOu VI IdIls udBt III Tue Jill IlldJ
will interpose certain safeguards for
the taxpayer and simplify administra-
ton of the proposed act.
There are at least two ether pro-
visions that should, in all fairness to
the taxpayers Of this community, be
inserted by the Senate committee, If the
bill is TO be approved in any shape.
These would follow the action taken
by number of the States O) in provid-
ing that the local tax shall not exceed the
eighty per cent credit permitted by the
Federal Government for taxes paid to
the State and in reducing or eliminating
the local State tax if the credit allowed
by the Federal Government is reduced
or eliminated and (2) in making collec-
tion of the eighty per cent credit retro
active, thus obtaining a refund from the
Federal Government.
An example of the first provision may
be chosen from any of the following
excerpts frcm a number of State laws:
California-"Should the amount of
tax in this act, increased by this section,
be afterward found to be more than
the maximum credit allowed under the
Federal estate tax act, then any excess
over and above the said maximum credit
shall be refunded, as is provided in sec
ton / of this act"
NebraSka-"But in no event shall the
estate tax payable under the provisions
of this act exceed the amount. If any,
by which the maximum credit allowable
to the estate against the United States
estate tex exceeds the credits herein
provided for in section IL
New Hampshire-"Pr Provided, that such
estate tax hereby imposed shall in no
case exceed the extent to which its
payment will effect a saving or diminu-
ton in the amount of the United States
estate tax payable BY or out of the
estate of the decedent had this act not
been enacted"
Compare also with laws to the same
general effect in Alabama, Michigan,
Iowa, Montana and other States.
The District of Columbia bill. as
framed, is contrary to the spirit in
which the State Legislatures have
framed their State laws, for the Dis
trict of Columbia bill, guaranteeing
that the full eighty per cent credit
shall be collected, also provides that
the local tax can exceed the eighty
per cent credit and will exceed it greatly
under the rates proposed; and, further
more that it will continue in effect re-
gardless of what changes are made in
the Federal law reducing or altogether
abolishing credits now allowed Says
the District bill, This section shall not
be affected by any subsequent repeal
or changes in the revenue act Of 1925
after the effective date thereof, nor any
amendments thereto and if the United
States should alter, change or discon-
tinue the imposition of the estate,
legacy or succession taxes, the tax
herein provided shall continue to be
levied and collected upon estates Of resi-
dents of the District as hereinbefore
provided"
II in the desperate effort to balance
the national budget the threat to with
draw the national credit (of 80 or any
other per cent should be carried out
our local estate tax would remain in
full effect. while in the States wisely
safeguarded, it would be automatically
repealed.
Certainly the citizens of the District
are entitled to the same protection as
provided the citizens of Virginia or
of Iowa, the provision Of the law OF
the latter State declaring; This act
shall become void and of no effect in
respect to the estates Of persons who
die after the effective date of the re-
peal Of the Federal estate tax act, or of
the provisions thereof providing a
credit Of the taxes paid to the several
States Of the United States, not ex-
ceeding 80 per cent Of the tax imposed
by said Federal tax act"
Virginia's law declares-"This section
shall be always so construed as not to
increase the total amount of inheritance
taxes, State and Federal payable upon
the estate Of decedents, the only object of
this section being to take full advantage
of the credit allowed by the act of
Congress hereinabove mentioned: and If
the said act of Congress should be in
any manner affected by subsequent
legislation of Congress this section shall
be so construed as to take full advan-
tsge of such credit as the laws OF the
United States may allow"
Compare with laws to the same gen.
eral effect of Maine, Mississippi and
other States.
AS for the retroactive provision, the
District bill if it is to become law,
should contain a clause similar to one
OF the following:
1owa-A tax shall be imposed" upon
the transfer OF tie net personal estate
OF every decedent dying after the goth
day of February, 1926 defective date
OF Federal 80 per cent credit provi-
sion), whose estates shall be opened and
pending in the courts OF this State or
subject TO the jurisdiction of such
courts at the effective date of this act
or whose estate shall or may become
subject TO administration in, or to the
jurisdiction of. the courts of this State,
after the effective date of this act
Vermont-"The provisions of this act
shall apply to all estates in process of
settlement, where the date Of the de-
cedent was subsequent to February 26,
1926"
Maine-Collects a tax on all estates
not fully distributed and now in process
OF settlement. where the death vas sub
sequent to February 26, 1926"
Compare with laws to the same gen.
ersl effect of Indiana, Maryland, Florida
arA nkker States u