Evening star., 1937-04-22

fThis is the second OF two articles
on the estate tdr)
F. THE District Of Columbia would
follow the example of several
States, 1t could raise substantial
revenue out of an estate tax and
could recapture some death taxes al
ready paid to the Federal Government,
without adding any additional bur-
den on the local estates.
These two objectives could be &C.
complished by amending the pending
estate tax bill in two particulars:
First, change it to provide. as sew
eral other States have provided, that
the State shall take only the 80 per
cent credit allowed by the Federal
Government out Of the 1925 Federal
estate tax base-and no more.
Second, add to the bill a provision
to recapture, wherever possible, the
80 per cent from taxes already paid
in. This feature is now missing from
the pending measure.
The House bill, as it now stands,
has an elaborate rate structure, which
generally would take more than the
30 per cent provision adopted by many
States. This rate structure would dig
down deeper into the little estates
than the Federal Government itself.
How some Of the States have linn
tied their collections to the 80 per
cent provision is clearly shown in
several examples, any one OF which
could well be followed by the District
of Columbia.
For instance, Alabama provides that
the total Alabama estate tax is not
to exceed in the aggregate the Fed
eral credit. In comparatively simple
language, making administration rea-
sonably easy, the State Of Alabama
says:
There is hereby levied and imposed
upon the net estate passing by will
devise or under the estate laws OF the
State of Alabama, tax Of 80 per
centum of the tax imposed upon
such net estates by the act of Con-
gress approved February 3, 1925. The
rates and the definitions Of net es-
tates' shall be as provided in said act
of Congress"
OF course the Federal Government
since the act of 1926 has levied q
super estate tax, upon which it allows
no 80 per cent credit, at all. This
super tax is getting more from estates
than the 1925 estate tax base. But
several States are still sticking to the
80 per cent as basis for their own
estate taxes.
Another example is California,
which says:
Should the amount of tax in this
act, increased by this section, be
afterWard found to be more than the
maximum credit allowed under the
Federal estate tax act, then any ex-
cess over and above the said maxi
mum credit shall be refunded, as is
provided in section II of this act"
The State of Michigan long ago
went so far as to provide that no
more than the 80 per cent shall be
collected from estates and refunds
are to be made out of the primary
school funds" This unusual proVi-
sion reads, in part, as follows:
Upon the final Federal determina-
ton of 80 per centum of the Federal
estate tax, the State treasurer and
auditor general shall refund and pay
back to the executor, administrator
or trustee of such estate or other
person interested hereunder out of
the primary school fund all moneys
heretofore paid to the appropriate
county treasurer under this act in
excess of 80 per centum which shall
have been paid pursuant to said pro-
vision requiring the payment OF an
amount equal to the difference be-
tween the total of such taxes herein
before imposed, plus all other credits
allowed by the Federal act for taxes
paid the State governments, and 30
per centum of the tax, which may be
imposed by said Federal revenue act,
and mandamus shall be available to
such executor, administrator, trustee
and other person to compel such re-
fund and repayment"
With typical New England brevity,
the State Of New Hampshire says:
Provided that such estate tax
hereby imposed shall in no case ex-
ceed the extent to which its payment
will effect a saving or diminution in
the amount of the United States
estate tax payable by or out OF the
estate of the decedent had this act
not been enacted"
The District of Columbia over a
period of years has been turning into
the Federal Golfers substantial
amount of estate tax without getting
any credit to the municipality. All
States, with the single exception OF
Nevada, take advantage Of the oppor-
tunity to get this 80 per cent credit.
and it would seem not only logical,
but Just that the District should get
what would be coming to 1t under
such a provision.
Not only could the new estate tax
bill 20 into the future to collect the
80 per cent credit, to its own advan-
tage, but it could, under present Fed
eral law, and practice, reach into the
past, to recapture some OF the death
taxes, which already have been paid
! in to the Federal Government.
This could be accomplished by q
SIyNN