The Washington times., 1935-06-27
PLANS
GIVE TREASURY
A AHEADACHE
BY GEORGE r. HOLMES
international News Service

international News Service
The Administration is firmly
committed to the breaking up Of
enormous estates by use of the
Federal tax hammer-both for
revenue purposes and to create
"a better social order" as Presl-
dent Roosevelt put 1t.
But as to just how it is to be
done, the mechanics of it, is some
thing else again. Members OF
Congress speak rather vaguely OF
the TreaSury's tax experts eVolV'
ing q plan. The experts already
have q headache over it, and 1t
is just the beginning.
How To Do It
The tentative tax rates on in
heritances produced by the ex'
perts in Congress and the Treasury
call for a graduated inheritance
tax Of 4 per cent on estates OF
$500, 900, and amounting to IS per
cent on estates Of more than ten
million dollars.
It would be easy enough to COL
lect such a large tax, they admit,
if the estate in question was liquid,
or composed of cash or readily
liuuidated securities, but few eS-
tates of such magnitude are so
situated.
On the contrary, most Of them
are composed chiefly of real prop
erty, scattered through many
States, land, buildings, factories,
and business enterprises Of many
sorts.
How to take q cool three-quar-
ters of such an estate without
causing severe loss in values, or
the governments going into many
kinds of business. is the question
that is giving the experts their
headache.
No Answer Found
Henry Ford offers a case in
point, which usually is cited to
demonstrate the difficulties which
confront the redistributers Of
wealth.
Ford is supposed to have a bill
lion dollar business. He owns coal
mines, enormous manufacturing
plants. shipping and railroad lines,
and what not.
The question is asked, suppos-
ing the Ford estate to be worth a
billion dollars, how would the gov
ernment proceed to collect three.
quarters of it, $3.50, 900, 900, with
out destroying the business that
produces many millions in Fed
eral taxes annually, or without 60
ing into the business itself?
There isn't any answer to it yet.
One suggestion is that the Fed
eral Government could get its
money by organizing a corpora
tion and selling the stock in a
going concern to the public.
There are maniford objections
to that. The experts say it might
work in one case and fail utterly
in another.
A more remote suggestion is
that the Federal Government take
over the business of a going con-
Germ and try to get its money that
way. But Government operation
Of business in competition with
private business has never been
q bowling success.
Costly Business
Another idea is outright liquida-
tion Of an estate under Federal
auspices. But that course, too, is
fraught with considerable diff
ficulties. Liquidation would be
calculated to depress values and
in all probability, the experts
admit, prove a costly proceeding
to the Government, in revenues,
as well as to the heirs. How, it
is asked, could the Ford business
be liquidated without entailing
enormous losses? There is no
answer to that one, either.
The only alleviating factor in
sight appears a disposition on the
part of the experts and the legiS-
lators to provide a long period
for the payment of inheritance
taxes.
Senator Pat Harrison, chairman
of the Senate Finance Committee,
mentioned Is wears as a probable