Evening star., 1932-03-15

(Continued From First Page.)
its report that on a $4,000 estate the
tax would be 81 500 under one interpre.
tation and only $1,000 under the other
One of the chief recommendation oi
the bureau was the rewriting of thi:
section to make its meaning unmis-
taxable.
Another inequity of the Mapes bill
revealed by the efficiency experts is that
the exemption on property left to q
brother or sister would be greater thar
the exemption for property left to q
child of the deceased. The bureau rec
commended that this arrangement be
reversed, giving children of the deceased
greater exemption than brothers ano
sisters.
Other changes would do the follow
ing: Exclude Intangible personal prop
erty of nonresident decsdents; alI0W
some deduction Tor losses from Casualty
or theft; an allowance for property
previously subjected to estate tax; CO.
operation with Federal officials IN work
ing out the Federal and local tax levles;
a change in the rule laid down IN the
Mapes bill for valuing the property to
be taxed; establishment of definite
assessment date; inclusion OF definite
procedure for appealing from assess
inents; elimination of the special pro-
cedure for refunding estate taxes, since
the District already has an indefinite
appropriation for tax refundlng; modl-
fication of enforcement provisions re-
lating to transfers of property; the in
cIusion of the usual clause to the effect
that If any part of the bill is declared
invalid. it shall not affect the rest, and
a new section to make the proposed law
effective as of the date of enactment.
First Of a Series of Reports.
In this, the first of series of reports.
the bureau confined itself to detailed
history and analysis of the subject of
estate taxes. The four other House
bills, making up the program OF the
Mapes committee to increase District
taxation and alter the fiscal relations
between the Federal and District gov
ernments, also are being studied by
the bureau. The estate tax report was
submitted to the committee late yester-
day.
Chairman Capper expects to receive
tomorrow a combined report frcm the
bureau on two more of the tax bills
raising the levy on gasoline from to 4
cents a gallon and seeking to tax motor
vehicles by weight. On a later date
the bureau will submit findings on the
proposed local income tax bill and will
conclude its inquiry with a report on
the bill which seeks to repeal the sub
stantive 60-40 law for apportioning ex-
penses between the District and Federal
governments The studies are being
made under the supervision OF Herbert
D. Brown, chief and Thomas F. Muir
ply, assistant chief of the bureau.
Taxed in Other Countries.
In reviewing the history of this form
of raising revenue the bureau says some
form of inheritance or estate tax exists
in most of the advanced countries, !"
and that succession transfers were
taxed in Egypt before the Christian era.
Death duties, were exacted through
out the Middle Ages, and in America
probate duties we're imposed by some
of the original colonies, the report re-
calls. The first State to enact an in
heritance law was Pennsylvania, in
1926, and in the ensuing 20 years five
or six States followed the example.
AT present" the report continues,
"14 have inheritance taxes, have
estate taxes and 81 have both inheri-
tance and estate taxes. Nevada is the
only State that has neither form OF
tax"
The bureau gives the following brief
description of the difference between
estate and inheritance tax laws:
There are two commonly accepted
methods Of taxing inherited wealth
the estate tax, based upon the dece-
dents estate before distribution, and
the inheritance tax, based upon the
individual shares distributed among the
beneficiaries. The former taxes the
right of transferring wealth and the
latter the privilege of receiving it. Both
constitute duties required to be paid
ha fro 30 Nv of
In declaring the estate tax to be the
preferable of the two from a govern
mental standpoint, where revenue is
the primary consideration, the bureau
argues that a graduated tax on the
whole estate will be larger than one on
the individual shares of the bene-
ficiaries.
Appear to Be Harsh.
ITO put inheritance tax revenues on
a parity with those of the estate tax"
the report goes on, the rates of the
inheritance taxes must be raised to
such an extent that they invariably
appear harsh by comparison. The
fabric of the inheritance tax is inter-
woven with different rates, relation
ships and exemptions. For each bene-
flciary separate tax must be COM
puted, with the result that the work
required TO determine the total taxes
OF the estate Is greatly increased. The
estate tax Is relatively easier to deter
mine, assess and collect because it is
imposed on one single entity, and the
administrative costs are therefore less"
The bureau told the Senate commit
tee the main argument of opponents of
the estate tax is that the tax basis is
wrong. Those who hold this doctrine
contend, according to the bureau, that,
since the ultimate payer Is the bene-
flciary, the determining element should
be his taxpaying ability, and not that of
the decedent.
Notwithstanding the force of this
argument" the Efficiency Bureau adds,
''estate taxes are growing in favor. The
report of the National Committee on
Inheritance Taxation, dated November
10, 1925. recommends the substitution
of estate taxes for the succession taxes
imposed by the States"
The efficiency experts quote this ma
tional inheritance tax committee as
stating in 1925 that, although the sue
cesSion tax is theoretically superior to
the estate tax in its closer conformity
to the ability of the beneficiaries. it
does not carry advantages sufficient to
outweigh the more substantial advan-
tages Of simplicity which the estate tax
presents
Inc report SHOWS tnat more than
half the States now levy estate taxes
TO supplement inheT't lance taxes, and
that in all but two y three States the
supplemental tax is purely an arbitrary
amount imposed to absorb the 80 per
cent credit which the Federal Govern
ment allows, meaning that there can be
deducted from the Federal tax on an
estate similar taxes paid locally UP to
a limit of 80 per cent of the Federal
levy.
Maryland and Virginia.
The Efficiency Bureau summarized
the succession taxes in the adjacent
States Of Maryland and Virginia as
follows:
Virginia has an inheritance tax that
grants exemptions from 81 900 to $40 =