The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-11
Keen interest Shown in
Washington on Estate
Levy Reform.
C0UZENS SEES DEFECT
Great Injuries Are Possible
Under Present System,
Is Consensus.
BY ROBERT w. HORTON
Times Special Writer

WASHINGTON, Jan. 11.-Keen
interest was displayed today at the
capital in the proposal of Robert
P. Scripps, controlling stakeholder
of the Scripps- Howard newspapers,
for reform of the existing machin-
cry for the collecting of estate and
inheritance taxes.
Legislators interested in taxation
agreed that under the present sys-
tenn great injury can be done the
taxpayers as we'll as the govern
ment.
They were likewise unanimous in
conceding that the collection of
death duties from large estates is
a problem not yet adequately dealt
with and one deserving conscien-
tious study.
Mr.. Scripps made the point that
the present method of collection
was virtually cash on demand" In
the case of large estates where
death taxes are correspondence
high he pointed out that the pres
ent system frequently jeopardizes
the estate If it is a business enter
prise by forcing liquidation of
large portion to pay the tax.
Couzens Discusses Plan
He said forced liquidation might
cause enough damage actually to
deprive the government of flu
ture taxpayer. His proposal was to
have the government accept notes
or long-term paper Q5 to Is years.
bearing prevailing interest and so
preserve the enterprise intact and
assure the government of collecting
it's taxes.
Senator James Couzens (R,.
MichD ,multimillionaire sponsor of
high taxes on wealth, discussed the
Scripps proposal from the purely
financial point of view.
While admitting that the situa-
ton presented a definite problem,
he felt that under the Scripps plan
the government would not be prop
erly protected.
He said it would be extremely diff
ficult to give the government
proper lien against the estate. Even
if this were done, he declared, the
government would have no voice in
the management of the enterprise,
no way of telling whether the man
agement was adequate until too late
Puts Government in Business
But, said the Senator, assuming
that 1t were possible for the govern
ment to be completely informed as
to the inside of the business.
could it forecloSe, as a practical
matter if it were decided that such
course was inevitable?
Senator Couzens also suggested
that if the government accepted the
paper of a business enterprise it
could not be denied that the gov
eminent was actually in that partic-
ular business.
He also pointed out that if bust
ness should give the government a
virtual lien against its physical as
sets, then the enterprises credit
would be impaired to that extent,
Another consideration, he said,
would be whether the government
should be authorized to discount the
paper Of the estate and thus make
it bankable or should hold it and
thereby be deprived of the princi-
pal for the full Is or IS years.
Careful Study Urged
That the Senator considered a
major point because the government
Is not in the investment business
and can not depend upon interest
for its income. 1t does not invest
its receipts and obtain what it
spends from such an investment.
TIL, government lives upon its prin-
ciral, so to speak. and were it forced
to make long-term investment in
taxpayers notes or other paper. it
would lose the full immediate bene-
Mt of the taxes. he said.
All these, and other questions, the
Senator said, must be taken into
consideration, but they do not mean
that the problem should not be
studied and the present system, if
possible. corrected.
Senator George w. Norris Or.
Neb9, who has frequently discussed
estate and inheritance taxes in the
Senate. said that certainly some
equitable arrangement should be
made to prevent injury to either the
government or taxpayers.
Valuable" Says Wagner
He suggested that it might be pos
sible for the government to accept
tax payments on estates in kind"
Should the estate involve substan-
tial amounts OF government or state |
and city bonds, he said, a scheme
might be worked out for accepting
these In lieu of cash.
Certainly. he said. the government
should accept its own bonds and at
par, even If they were selling under
par.