Evening star., 1935-08-06
TAX BILL TERMED
ATTACK ON STATES
Representative PIumley OF
Opinion 1t Injuries
Levy System.
BY DAVID LAWRENCE.


others who will have to pay more
taxes to the States ir which they live
in order to make up State deficits.
Representative Charles A. Plumley
of Vermont, who is one of the fore
most tax experts in the House of Rep
resentatives, is authority for the state
ment that the proposed inheritance
taxes may insidiously break down the
whole system of State taxation.
Mr. Plumley, who was a specialist
In inheritance tax law before he came
to Congress, has made an exhaustive
analysis of the rights and powers of
the Federal Government and the
rights of the States He comes to the
conclusion thai the Federal Govern
ment has really no constitutional
power over the passing of property
through death. He says this is pri-
marily State power and may lead
If exercised by Washington. to re-
prisals by the States. He argues that
all a State needs to do to prevent
the Federal Government from sapping
its tax revenues from inheritances is
to pass law declaring that all prop
erty passes upon death to the State
and then the State can remit such
portion as it desires to a beneficiary
Cites Justice Whites Opinion.
Nov as to the validity of any Fed
eral death tax" says Mr.. Plumley
whether estate or inheritance, this is
generally believed to have been con-
clusively settled by the decision OF
Knowlton V. Moore I am perhaps
imprudent in venturing to doubt that
decision and the soundness of the rea-
soning of the opinion.
Chief Justice White wrote a ST.
page opinion in which he discussed the
conceivable angle, When. however, he
came to the main point, namely
whether the Federal Government had
any power. under the Constitution, tc
levy any sort of death tax, venture
to doubt the soundness of his reason
ing. He seemed to base his decision
on the fact that the Federal inher-
itance tax of 1897 was passed at a
time when Congress was full of men
who had participated in the formation
of the National Government and OF
the constitutional convention which
had preceded it. His argument is thai
these men presumably knew what wa,
within and what was without the pow.
er of Congress and that if they en-
acted a Federal inheritance tax II
must have been within the power oi
Congress, and that consequently it wa.
not up to the Supreme Court, a cen.
tury later. 10 doubt the validity oi
that action. ----
State Gives Right to Inherit.
1T seems to me that this is rather
tenuous argument. At bottom /
depends on the theory that the sub.
ject of inheritance or estate taxation
is not the right or privilege granted
by the sovereignty to transmit OF
inherit, but is the transmission o.
receipt. This seems to me, with tht
greatest respect to Mr.. Chief Justict
White, metaphysical distinction
without any real difference. Indeed
believe 1t can be demonstrated tc
be wrong. 1t is universally admitted
that 1t is the States and not the
Federal Government which grant the
right to inherit property from the
estates of deceased persons. I think
no one will doubt this proposition
If so, it is within the power Of any
State to defeat any Federal death
tax as applied to its own citizens"
1t was here Mr.. Plumley suggested
that the States take over all prop
erty and then transfer what they
think is right proportion.
When all is said and DONE" he
added, notwithstanding the legality
OF the course that has been pursued
and is proposed, it is wrong. The
Federal Government as such has no
moral right to levy an inheritance
tax, call it excise or otherwise, which
indirectly puts an additional tax upon
the property Of every citizen of each
and all Of the several States under
the guise of redistributing the
wealth"
When Mr.. Plumley discussed this
subject recently in the House of Rep
reSentatives, the administration bill
had not yet been introduced but the
Presidents message gave as the OBJ
Jective the redistribution of wealth.
Hence Mr.. Plumley quoted the fol-
lowing from President Coolidges
statement to Congress in February,
1925:
Opposes Tax Disguise.
SET do Iaa1i @k.@
ment should seek social legislation in
the guise of taxation. We should ap-
proach the question directly, where
the arguments for and against the
proposed legislation may be clearly
presented and universally understood.
If we are to adopt socialism, it
should be presented to the people of
this country as socialism and not
under the guise of a law to collect
revenue. The people are quite able to
determine for themselves the desir-
ability of a particular public policy
and do not ask to have such policies
forced upon them by indirection."
Mr.. plun1ley also quoted from sew
eral speeches and comments of tax
experts on the subject of estate taxa
ton, the general tenor of which is
that if the Federal Government in
vades extensively the estate tax field
the States will gradually be deprived
of their main sources of revenue and
will become vassals of the Federal
Government.
It would not be surprising If the va
hdity of the forthcoming tax law were
tested in the courts on the ground
that 1t amounts to confiscation. There
ale all sorts Of collateral issues in in
heritance tax controversies on which
the courts might pass, and the out
look Is for considerable litigation as
well as friction between the States
and the Federal tax departments.
Copyright. 1850
SUES FOR SCAR