Evening star., 1938-03-27


past quarter of a century there
have been public expressions of
concern at the growing practice
OF overlapping taxation, a duplicating de-
mand of tribute from the same sources by
our various levels of government
Less often has there been displayed any
appreclable reluctance on the part of these
various levels of government to 'poach" on
the tax reservoirs considered within each
others special province but seldom made
inviolate by Constitution or staute
Frequently there have been assurances
that impartial students would survey the
problem and recommend a solution Only
last Monday an able restatement by Gov.
Herbert H. Lehman of New York of con-
dltion that has become increasingly alarm
ing was followed by a renewed demand
within Congress that the Federal Govern
ment take the lead in resolving the obvious
conflicts, And in reply Treasury Depart
ment officials admitted considering calling
conference next summer of Federal and
State tax authorities to seek agreement
on certain revenue Jurisdictions
Actually two types of tax duplication
exist, described most effectively perhaps
as vertical conflicts and horizontal con-
Hlcts. The former, by far the most serious
arise when governments of different levels,
such as Federal and State or State and
local, tap the same source of revenue The
latter type occure when governments of
lava ty-~
units. reach into the same grab-bag
Specific restrictions in the matter of
levying taxes, particularly as they might
apply to Federal and State governments,
are few.
The Federal Constitution, for instance,
forbids the Federal Government to levy
direct tax. but court interpretations and
the 18th Amendment have reduced this
prohibition to a point where it prevents
only Federal property tax. The States
are forbidden to tax interstate commerce
or to impose customs duties With a few
other less important restrictions the field
OF potential taxation is left wide open
and fullest advantage has been taken of
this condition.
For example, the Federal Government,
every one of the States and even some of
the local governments impose taxes on
gasoline. The Federal Government and all
but one of the States impose death taxes
the very condition which led Gov. Lehman
to protest to the Senate Finance Com
mittee.
Reliance Placed on Income Tax.
The Federal Government relies greatly
upon the income tax, both corporate and
individual, but nearly two-thirds of the
States do likewise, with the revenue COM
ing from the same pockets Liquor taxes
likewise are important revenue sources of
most of the States and of the Federal
Government, and the same situation Is
found with regard to tobacco taxes.
The local subdivisions traditionally have
depended most upon the property taxes
a breakdown for 1882 showing that 90 per
cent of their aggregate revenue of nearly
$4,000, 100000 came from this source. Yet
many States have encroached on this field
to an increasing degree in recent years.
And where the States count heavily upon
receipts from motor vehicle taxes, a goodly
number of local units are nursing more
than nickels out of the same taxpayers.
very few figures further demonstrate
the effect of some of the Implications Just
mentioned In the following table are
shown collections in millions of dollars
for the fiscal year 1885 from selected few
taxes levied on the same sources by the
Federal Government and by majority of
In C{o{e
in aggregate: