Evening star., 1932-04-07

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Federal and State tax systems. A few
years ago Florida advertised extensively
that it had no inheritance tax and no
income tax and invited rich people to
establish their residence there. Other
States saw a possible loss OF revenue.
Congress enacted a provision Whlcn
works about as follows:
When the Federal estate tax is paid
a credit Is allowed for the State tax up
to 80 per cent of the Federal levy. This
means that If an estate Is subject to a
Federal tax of 100000 and State tax
of $4,000, the 100000 paid to the State
can be used as an offset against the
Federal levy, which would then be only
$4,000. Most of the States adjusted
their rates accordingly. In the case OF
Flirado, however, thgere was no offset. so
the estate there paid the Federal Gov
ernment the 100 per cent of the tax.
The Supreme Court of the United
States held the law to be constitutional
and Florida has since adopted an
estate tax.
Under the increase in Federal estate
taxes now proposed, however. all the
increased revenue will go to the Federal
Government and the 80 per cent credit
will not apply to the increased rate.
SO-0r0fnatAOH Long OESCu'
Just what would happen If there
were informal agreements among Fed
eral, State and local units about taxa
ton depends entirely on how jealous
the local units might be about their
taxing power. 1t has always been be-
lieved that a co-ordinated tax system
would lead to certain amount OF re-
organization in the governmental struc-
ture, particularly in the local units: In
some of the Southern States. especially
North Carolina, the State has taken
over most of the powers in the admin
istration Of important local expendl-
lures.
Noted economists have for a long
time urged that there be coordination
of various taxing systems of the coun-
try. DR.. Seligman and DR.. Adams have
been advocating something along that
line for many years at the meetings OF
the National Tax Association. DR.:
Clyde L. King, who Is at the head OF
the Pennsylvania Department OF Reve-
nue., recently said:
There are certain phases OF our tax
system which I am sure we should
| change. Among them are: Allow credits
on national taxes for duplicating State
taxes. The National Government has
| USED up the JraQlClO0al I1elQ Oh 0tdIe
taxes and is in the throes of doing ever
more to affect State taxes adversely
notably the proposed tax on gasoline.
The theory is, of course, that II the
entire taxing system of the country
could be put on a uniform basis Il
would result in an increased efficiency
all along the line and would, OF course
aid taxpayers. The question OF STATE
rights, as well as local autonomy, woulc
enter into the discussion in the future
as it has in the past. Already many
important changes have been made tr
revising governmental structure, par
ticularly in eliminating duplicating
country machinery in sections whicf
are populous.
Gasoline "Bootlegging."
Gasoline "bootlegging" has become 9
real business, due to the fact that there
is no Federal law on the subject o.
gasoline taxation. This Is one reasor
why the Federal authorities are urging
a gasoline tax. They believe that somt
Of the money which is now not beint
collected by the States would come int
the Golfers Of the Federal Government
The conflict between the States ant
the Federal Government on incom
taxes has not been particularly disturb
ing in the past, but now is rapidly be
coming one of the serious problems
The Federal Government makes avail