Evening star., 1932-03-15

lions. II pOlnJS OUT, lOr eAdHlPfo' 'AA0'
in Connecticut the rates are to pei
cent, while in wisconsin they are to
40 per cent.
"Most of these States de: Those
States that have only an inheritance
taxi have adjusted their rates so that
the tax on an estate exceeding 100000
is more than the 80 per cent credit al
lowed by the Federal Government, the
report continues.
The bureau found that in the year
1880 the credits allowed by the Fedora
Government on account OF mherl-
tance, estate, legacy or succession taxes
paid in the States amounted 10 I44!
per cent, showing how close most OF
the States have come to collecting the
full 80 per cent credit allowed on the
Federal tax for similar taxes paid To-
cally. One of the exhibits in the bu-
reau's report shows what these credits
were for each State, resulting In the
figure Of 7441 per cent of the Federal
estate tax for the country as Whole'
Primarily a State Tax.
I'm the United States" the report
continues, 1.-The inheritance tax has been
primarily a State tax. Its growth has
been due in large measure to the de-
sire of the Legislatures to distribute the
expense of the government in such a
manner as to relieve the burden OF di-
rect property taxes. The Census Bu.
| reau report on financial statistics OF
the States, 1929, shows that $148,59l, :
! 827, or slightly more than 9 per cent
of the receipts from all State taxes
! SI,611 ,961 120-was collected from in
! heritance and estate taxes
The bureau then points out that the
! House committee estimated the pending
| bill would raise not less than S750,000
in the District, and adds that "the
amount estimated for estate taxes would
constitute about 2l2 per cent of the
revenues collected on account of the
I District of Columbia
The reasonableness Of the measure,
of course" the bureau then empha-
sized, depends not on the amount OF
revenue derived, but on the rates, eX-
emptions and conditions of the tax and
the relative burden on residents OF the
District. a discussion of which follows
in subsequent sections"
The bureau says that because Of the
present unprecedented depreciation of
property values reliable estimates of
receipts from the pending bill are diff
| ficult to make. During the flve-year
period 1925-29, the report states, the
| Federal Government collected on es-
| tates in the District of Columbia an
| average annual tax of $792,652.
From these statistics some idea may
be had of the potential income from
the proposed bill, as its rates are prac-
tically the same as those in the Fed
eral law. Because of the lower exemp-
tions in the bill, taxes would be COL
lected on estates that are not reached
by the Federal Government. For each
If nr1lyy q ohOJIt an
taxable returns were filed on decedents'
estates in the District of Columbia.
Under the District bill there will be
many additional taxable estates, which
will result in considerable revenue. The
drop in value of both real and personal
property because Of the depression will
tend, however, to reduce the size OF
estates until normal conditions are re-
stored, with corresponding reduction
in the potential revenue from the tax.
The extent of this reduction is more or
less matter Of conjecture.
Records Not Complete.
"An effort was made to estimate the
number of taxable returns that would
be fled annually under the proposed
bill. The records of the register of wills
were reviewed. but it was found that
estate inventories are not filed in all
probate cases, and that most of the in
ventories that are filed do not include
real property. Due to the lack of data
and the uncertainty of the duration of
the present depression, the committees
estimate of S750,000 seems reasonable" !"
After pointing out that methods and
cost of administration of such a tax
vary widely throughout the country,
the bureau recommends that if one Is
enacted it be placed in the assessors
Office Taking into consideration the
estimates the cost of administering the
tax here would amount to approx
n1ately $12,500 year
1.-The enactment of an estate tax law
for the District of Columbia at the
rates prescribed in the bill fits into
balanced plan of taxation" the report
continues. I'm economic theory the tax
can be defended as being in complete
harmony with the principles of equi-
table taxation. 1t is found in almost
every country. and the more democratic
the country the more developed is the
tax"
After calling attention to attacks
made on the Federal estate tax in the
last Is years, the bureau observes that,
although some of the arguments are Of
value, - 1lCNCI IllClcSo d
growing sentiment in favor of confin-
ing the levy of estate and Inheritance
taxes to State governments, principally
because there is need for distinguishing
between the subjects of taxation by the
States and by the Federal Government.
Because of the 80 per cent credit
allowed by the Federal Government,
the net additional cost to decedents'
estates under the proposed bill would
be surprisingly low. Even in the case
Of large estate the additional cost
would not exceed per cent of the net
estate. This, of course, would be In
addition to any estate tax paid to the
Federal Government.
Under the proposed law the estate
tax receipts would be credited to the
revenues of the District of Columbia.
Although not large, they would consti-
tute revenue to which the District
is clearly entitled as a taxing soy-
ereignty.
Effect on Revenues.
"The effect Of the bill, based on the
estimate Of S750, 900, would be to in
crease the District revenues by that
amount and to reduce the revenues to
the Federal Government approximately
100000 year"
After setting forth the history and
methods of levying estate taxes gen.
orally. the bureau takes up one by one
the II changes it suggests should be
made in the text Of the House bill.
! The first is exclusion Of intangible
! personal property of nonresident de-
! cedentS." The principal reason given
by the bureau for this recommendation
! is the recent decision Of the Supreme
! Court of the United States in the case
| of the First National Bank of Boston,