Evening star., 1938-03-27
Overlapping of Taxation
Brings Relief Demands
Treasury Contemplates Calling Conference of
Federal and State Authorities Following
Criticism
Criticism.

tween Federal, State and local governments.
Although simplest in theory this plan
probably is least possible of all in view
OF the unwillingness of any level Of gov
ernment to surrender its habit of collecting
revenue from certain productive sources
regardless of how much others might be
drawing from the same source Trades
might be made on certain levies. but the
generous sum which both State and Federal
governments receive through income taxes
or liquor taxes makes it unlikely that
either could afford or be willing to sur
render their tax rights in these fields
2. Sharing the sources, but with an
within reasonable limits.
Despite the gloomy picture already por-
trayed, this integration is being attempted
in the case of many specific taxes. The
States, for instance, refrain from high
individual surtax rates because of Federal
presence in this field Cooperative efforts
already under way are likely to make in
creasing use of this theory.
3. Use of common tax base and single
administration, but with each division of
government retaining power to Ak the rate
for its tax subjects
4. Use of the crediting device as in the
present system for unemployment COM
pensation and in death taxes
5. Capitalization of tax administration
and collection with funds to be returned
to the locality of origin either on a basis
of need or in conformity with a fixed
formula
Weaken Sovereignty of States.
While both 90 and (5) have been
applied to an increasing degree in recent
years, it is their very tendency to weaken
the sovereignty of the States while in
creasing the power of the Federal Govern
ment that aroused Gov. Lehman and surely
would precipitate serious bitterness if at
tempted in too great degree or too rudely.
The fundamental question in deciding
whether the plan of centralized collection
of taxes is to be further encouraged re-
wolves largely around the question of what
functions we are to continue to expect Of
our various levels of government
Probably no better statement of the i'm
plications of this problem could be made
than that of the New York chief executive
in the following paragraphs:
THE Independent sovereignty of the
States is threatened by Federal taxing
policy" Gov. Lehman wrote. This coun-
try was organized on the theory and has
proSpered under system of independent
States with exclusive authority in many
fields and with independent taxing power,
power not second to but on parity with
the Federal Government itself
Under such conditions, if one of two
governments having equal concurrent
jurisdiction to levy a tax, actually
monopolizes the field to the exclusion or
near-exclus!on of the other, it may follow
that that other government will be de-
stroyed or at least starved into impotency.
Except during war times the services
which the States and their localities render
to their people are just as important and
beneficial as those rendered by the Federal
Government. Certainly they are more
intimate and personal The States are
encountering increasing difficulty in de-
vising revenue means for their own
financing and the financing of the
localities
Il give you these thoughts because am
profoundly convinced of their importance
if this country is to continue according
to the pattern originally planned"