Evening star., 1936-12-02
Duplicate Taxation.

cate or overlapping taxation by the
States and the Federal Government
suggests no remedy for a condition long
recognized as illogical, inequitable and
perhaps wasteful But the authoritative
presentation of some of the basic facts
and figures will answer a public demand
for such information and doubtless
will prove useful when the time comes for
concerted action in pursuit of remedy.
The Treasury study reveals that in
1885 the States took $1,049 ,900, 900 and
the National Government collected
$2,271 400 900 from six forms Of duplicate
taxation The trend in the States is
toward increasing their imposts in fields
formerly reserved, in practice, for the
Federal Government or developed as
new sources of taxation. In 1880, for
example, only nineteen of the States
we're taxing individual or corporation in
comes In 1885 the number had in
creased to thirty. Six years ago there
were only two States with general sales
taxes, while in 1885 there were twenty
five. Twenty-three States imposed ex-
else taxes on tobacco in 1885, as against
sixteen in 1880. All except two of the
States collect excise liquor taxes, all but
one State and the District of Columbia
have enacted estate or inheritance taxes.
The Federal Government has become a
heavy collector of gasoline taxes. along
with the States, which derive their chief
revenue from gasoline and motor vehicle
taxes
President Roosevelt has long urged the
need for some separation of the fields
of taxation between the Federal. State
and local governments. In a campaign
speech in 1882 he made such a separa-
ton a necessary condition to the "im-
portant task of putting some kind of a
limit on the total of our taxes and on
the total of our Government debts"
Other individuals and organizations of
tax authorities have stressed the i'm
portance of remedy, although the diff
culties are recognized on all sides.
The present picture of taxation in
the United States suggests a hodge
podge, with all governments seeking new
or additional sources of taxation, with
frequent trespass by one taxing unit on
the field already occupied by another.
But this condition is relatively recent
development. Until about 1910 there was
little duplication in taxation between the
Federal Government and the States.
The Federal Government depended
chiefly upon customs revenues for its
money, while the States restricted their
levies to those on property. The World
War, with its demand for revenues, was
chiefly responsible for diversif1cation in
Federal taxes, although the corporation
income taxes and. later, the individual
income taxes preceded the war. The war
revenue act Of 1917 imposed Federal
estate tax, plus higher income rates and
many new commodity, or nuisance, taxes.
And in the spending period after 1920
and the depression period after 1929,
both States and Federal Government
combed all available revenue producers.
In some taxes, such as the gasoline tax,
the law of diminishing returns through
excessive taxation in some cases has
asserted itself.
The proposals for remedy include
intergovernmental agreement for uni
formity and reciprocal legislation; sep
aration OF tax bases, under which certain
taxes would be reserved for the States
and others for the Federal Government;
q system of Federal credits, as in the
Federal death taxes, returning to the
States q percentage Of taxes collected.
and the collection by the Federal Gov
ernment of all taxes which it can most
effectively administer with apportion-
ment of the yield among the States.
Each of the plans has its proponents and
none of them, of course, is free from
criticism. The President, for instance.
has advocated the division of fields of
taxation. But this would imply an
agreement for limiting the tax to be
taken from any single source. Other
wise, excessive, ruinous competition in
tax collection would inevitably result
Perhaps the most workable suggestion
has come from the Interstate Commits
sion on Conflicting Taxation, which be-
lieves that each tax should be considered
separately and after agreements have
been reached studies should be under
taken to adjust discrepancies between
tax sources assigned among taxing
jurisdictions and the revenue needs. of
such Jurisdictions.
Hoover to Remain.