Evening star., 1938-10-02
GRADUATED RATE
IS PROPOSED FOR
INHERITANCE TAX
D. c. Assessor Also Urges
That Gifts Over $1,000
Be Levied Upon.
ASKS GENERAL REVISION
OF EXEMPTION CLAUSES
Would Change Nephews, Nieces
to Glass B Beneficiaries
and Boost Scale.

Adoption Of graduated scales for the
Districts inheritance tax, by which
the levy on large bequests would be
progressively increased, was proposed
to the Commissioners yesterday by
Tax Assessor Fred D. Allen.
Coupled with this recommendation
were proposals for a number of other
changes in the Districts tax system,
including one for placing tax on
gifts exceeding $1,000 and another for
a general revision Of the tax exemp-
ton laws. The latter would be in
tended to make exemption laws more
specific and to remove questions as to
just how and when they are to be
applied.
Commissioner Hazen. who made
public the proposals, said they would
be given careful study before the Com
missioners took any action leading to
congressional consideration of the sug-
gestions. 1t was indicated the pro-
posals probably would be referred to
the Commissioners Advisory Commit
tee on Taxation, already studying pro-
posals for revision OF the Districts
tax structure.
Would Add Revenue.
Assessor Allen suggested revision Of
the inheritance tax law as a means
Of gaining additional District revenue
A system Of graduated scales for in
heritances was approved by the House
two years ago, but the Senate dis
agreed and flat rate was provided
in the final measure.
Different ranges of rates were pro-
posed by the assessor for the three
classes Of beneficiaries. Glass A bene-
f1ciaries include widows, children, par
ents AMI direct lineal descendants.
His proposal is that for this class
the l per cent tax be continued up to
$50,000 limit. He suggested that
the rate be raised to per cent on
bequests from $4,000 to 100000, to
per cent from 100000 to $500 900,
to 4 per cent from $500, 900 to 81, ,000,- =
900 and to per cent for bequests n
excess of sl,cO0,00o. The present
$4,000 primary exemption would be
retained.
Mr.. Allen suggested the following
for class B beneficiaries, which under
his plan would include only brothers
and sisters: Three per cent for be-
quests up to $4,000; 4 per cent from
$4,000 to $4,000; 6 per cent from
s50.000 to 100000; per cent from
100000 to s5o0,000. and 10 per cent
for bequests exceeding s500,000. He
would retain the present primary ex-
emption Of $4,000.
Would Change Glasses.
Nieces and nephews now are in
; cluded in class B benefciaries, but
Mr.. Allen suggests that they be trans
ferred to class c, which would in
clude all other beneficiaries other than
those named above. For class c
cases, Mr.. Allen suggests continuation
of the existing rate of per cent for
sums up to $25,000 This would be
raised to 7 per cent for bequests from
$4,000 to $4,000; per cent from
$4,000 to 100000; IL per cent from
$Aoo,oVV " %ooo,ooV, dIlo W ID pcA
cent for bequests exceeding $500, 900.
The present basic exemption Of 81 900
would be continued.
In suggesting adoption Of a gift
tax, the assessor proposed that the
rates be made the same as those under
his inheritance tax proposals.
Mr.. Allen reported that in excess
Of $s0,000,000 worth of property in
the District is exempt from taxation
as being used for religious, educational
or charitable purposes. He suggested
that Congress be asked to amend
the tax exemption laws so that
religious, educational and eleemosynary
institutions be required to place the
title to their properties in the name
of congregation, religious society
or board of trustees if it is to remain
tax exempt. He explained that some
tax-exempt properties now are in the
names of private individuals.
He also proposed changes in the
exemption laws to make more specific
the declaration that tax exemptions
be permitted only If the properties
involved are used only for charitable,
religious or educational purposes.