Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-20

| proposed estate tut LdU JT TIC O''" WI
I"HREE previous articles OF TINS
series have shown that state
legislature. considering the re-
# vision or a State inheritance or
!. estate tax law or the enactment
of such a law, and considering Sucn
action from the viewpoint OF the StaCe
taxpayers. Is apt to do one OF tnree
things for the protection of those lax
PAYERS or combine the three IN the
new or amended legislation.
4 Three Safeguarding Provisions.
These three steps are:
To allow the State to collect up
10 the maximum credit allowed by the
Federal Government on estate taxes
Maid to the States-in other WORDS 10
collect for the State 80 per cent OF tIle
Federal tax. At the same time, 70
write into law the provision that oo
ner cent of the Federal law will be
the maximum taken for the State
3. To include a provision that III
case the credit permitted by the req
eraI Government is reduced under tne
80 Der cent limit now imposed tne
state will reduce its estate or INNER
lance tax collection IN accordance
Herewith. b.
| 2 To include a provision seeking TO
make the 80 per cent credit allowed on
Federal estate tax payments retroac-
| five. in other words, to refund TO tne
state 80 per cent of the total payments
made to the Federal Government III
| estate tax payments possible OF col
lection under the Federal revenue law
of 1926.
The Dual Role of Congress.
Congress, of course, fills a dual roie
in Washington. First, 1t Is the NATION
al legislature; second, 1t Is the mul to
nal legislature. It is the contention
here that in fulfilling this second role
| Congress should show the same thor
| ouch diligence In collecting for the
local taxpayers all Of the money that
a state legislature under comparable
| conditions would collect for the people
| of the State: secondly, that 1t Woulo
show the same diligence in protecting
the interests of local taxpayers against
excessive levies under the estate tax
that is shown by State legislature;
The articles preceding this one, and
the remainder of this article, show that
the estate tax bill for the Dlstrlct OF
J Columbia is not as favorable to resi-
dents of this community as the estate
tax bills enacted by the Legislatures OF
many States.
one reason why it Is necessary, from
equitable reasons, that it be as ia
yorable as the laws In the States Is be-
cause of the possibility that, while per-
hitting the States to receive their ~
per cent credit as usual, the Federal
| Government itself is now considering
the imposition of a new super" tax
that would go beyond and above the
collections that have been made under
| the old estate tax law.
The District Is threatened by new
estate tax law Gas written IN the Dill
now pending In the Senate) that Will
be one of the highest in the United
States. At the same time, additional
heavy rates are under consideration to
increase the Federal collections under
| the estate tax levy, as part OF the
/ budget balancing" program Of the
Federal Government.
Local Bill's Rates.
The local bill has high rates, virtu-
ally equal to the Federal income tax
rates, no provision for limiting the levy
here to the Federal 80 per cent credit
to States, such as many States limit,
and determination to continue even
though the Federal estate tax should be
repealed.
The new Federal tax, which would be
imposed on all States alike would vir-
tually double the amount which estates
| in this city already have to pay to the
| Federal Government. The new law
would set up new additional tax
! which would be virtually equal to the
present one, but this new Supertax
| would be taken from the estate without
any allowance for the 80 per cent credit
allowed in the present law to States.
| This new Federal estate tax bill Is not
directed especially against the District
| of Columbia, but would affect property
passing at death throughout the United
States. If enacted, however, this Fed
eral act would apply with equal force
| here as in the States.
The Higher U. S. Tax.
The new Federal estate tax bill pro-
vides for continuing the present rates,
virtually without change, including the
80 per cent credit; but 1t adds on top
of the present levy another additional
tax, which would not allow any credit
| to the States.
To explain with an example, take for
instance an estate on which the pres
ent Federal law would levy tax OF
| 100000. The law would allow a
credit" of $4,000 paid to some State
or the District of Columbia, provided
the tax actually was paid to the State
or District. Thus the Federal Govern
or only one-flfth Of the total Federal
assessment.
The new Federal estate tax bill
would leave the present 100000 levy
on the estate, with the 80 per cent
credit, but would place on top OF TINS
another 100000, which would include
no credit to a State So If the new
Federal estate bill passes, the actual
| tax on the estate in this example would
| be $4,000 to the Federal Government
and 100000 for the State government,
making the estate pay just double, or
a total Of 100000, instead OF the olo
100000 In other words, the Federal
Government would get six times as
much actual cash out Of an estate
under the new law as under the present
one. At present 1t usually collects only
one-f1fth of the tax assessed, the other
four-f1fths going to some State. But
under the new bill it would get the
original one-fifth, an added five-f1fths.
making six-flfths, or just six times as
much as before.
The various States, with the excep-
ton of Nevada and the District Of CO.
lumbia. had all been obtaining at least
part of that 30 per cent. But the
Golfers Of this city had been receiving
none OF the 80 per cent.
Proponents for the new District es-
tate tax bill claim for it many benefits,
chief of which is the collection of the
80 per cent of the Federal tax, a new
source of income for this city. There
is no good reason" said the report
Of the Select Committee Of the House
investigating fiscal relations between
the United States and the District
of Columbia, why such a tax should
not be provided in the District,
especially as the Federal Government
permits credit of all inheritance taxes
paid in the States, or which may be
paid in the District of Columbia, up to
30 per cent of the Federal estate
taxes"
This same report even went so far
as to say that the rates In the Dis