xt7wwp9t2q46_44 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 47 "The President's Tax Program: An Analysis of a Transparent Political Gesture," July, 1935 text No. 47 "The President's Tax Program: An Analysis of a Transparent Political Gesture," July, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_47/Am_Lib_Lg_47_001/Am_Lib_Lg_47_001.pdf section false xt7wwp9t2q46_44 xt7wwp9t2q46 Pamphlets Available . A- ·k
* The
Copies of the following pamphlets and
other ·League literature may be obtained _ . ,
upon application to the League’s national   S
headquarters:
Why, the American Liberty League?
Statement of Principles and Purposes I    
Progress vs. Change—Speech by Jouett Shouse
American Liberty League-—Its Platform
An Analysis of the President’s Budget Message
Anglysis of the $;4§880,000,000 Emergency Relief
ppropriat'on ct
Economic Sdcurity * * *
The Bonus
i%?“‘¥’t‘ H W k `
e irty our ee ·
The Pending Banking Bil] A An Analysis of a Transparent
The Holding Company Bill , ,
"What is the Constitution Between Friends?"— POl1t1C2ll G€S¢111‘€
_ Speech by James M. Beck
Where Are We Going‘?—e-Speech by James W. r
Wadsworth .
$F1<>€ (§0¤t¤‘,¤v¢S
through the Congreee Wrtheut en opporturutv The sudden decision to propose new taxes con-
for PI`oPoI` oohSuleretron· _ trary to the previously announced policy of the
The Conetrtutron rn Seotron VH: rneuee 1 or administration was obviously actuated by politi-
Article I, makes the following provision for con- eel tether than eoooomio reoeone
Sroeretron or revenue measures: , , This is the first administration to attempt to
"All bills for raising revenue shall originate divide the budget into ngenereln and aemeI._
in the House of Representatives; but the Senate eeneyn expenditures. The President in his eu_
may Protoee or eeneur Wren nrnendrnente> as on nual budget message, submitted to the Congress
other hr S- ,. . in January, 1935, indicated that it was his policy
It Would. heve been nrghry rrregurer enrr e not to attempt to balance the budget except as
clear violation of the intent of the Constitution to ngenereln expenditures which ere these ef the
to ooo ,e· Shore`tne'Weerth tex program as e' permanent government establishment. He said
Senate rider to a simple joint resolution extend- that he Wes Submitting e budget for the Heeel
ing the life of miscellaneous excise taxes. The year 1936 awhieh beleeeee except fer ex endi_
pending legislation embodies an innovation in tures to give Work to the ueem le ed ,, p
policy entirely foreign to the joint resolution in I Continuing the President Seite y '
question- Furthermore the effec? or Shen e "If this budget receives the approval of the
eouree· even rr the brebeeere were grven adequate Congress the country will henceforth have the
eenerueretren by the Senate Finance Cernrnrttee* assurance that with the single exce tion of this
Would be to pernut Subsequent eeneurrenee by item every crurrent expenditure gf whatever
the House rn Senate em<=¤d,m¤¤tS»¤1t*2€r urreetry nature will be fully covered by our estimates
_ otrtathrogglhhfogigergnce, ytrtthout actlon by 1tS gf current receiptsx Such deficit as occurs will
T5}? el _ e S ornnu eceb b th th H be due solely to this cause, and it may be ex-
wayS ai$mi$iZ§`§S' Stilirhirssrane afseEEiZ P*"°t§;’* tf delhi as ggpidlyhas private i¤’
Finance Committee should give an opportunity goikii O meme Oy DSG W 0 new are Wlthout
to the Congress for exercise of the legislative ` · · . _
ppwersl which the Constitution vests in it ex- §€;$?52e§ed? go? eggzeggle  Zdlzrgigrengteetge
c usive y. · - -
The Constitution in Section III of Article II ttreleogcegirgregie 1%%% nfrregrrggeiliflgrgreé ttelxjte glee
Provides tnnt the Preerdent irehon rrern tune to Congress take steps, by suitable legislation to
ttnte gtvtel to] the Corggrezo rnrorrsuttutrg of the extend the miscellaneous internal revenue taxes
e e' e e e nren¤ en ;e ernrnen err eon" which under existing law will expire next June
5

 or July, and also to maintain the current rateg II1‘1p1'OpeI' Use of Taxing Power
of theee taxes what will be reduced next June The taxing power is to be invoked not
P1`0P0$ed changes ln taxes always are lm- primarily to raise funds for the Government but
settling to hualneea Pl`lel` tefene Special message to attain political and socialistic ends. It repre-
of June 19, in which the Pneeldent dealt Wang e sents a use of the revenue clause of the Constitu-
subject, business Wae teld te expeet ne nm e" tion for a purpose both reprehensible and of
mental changes in revenue laws during this ses- doubtful Validity
sion ofthe Cehgneea , The Supreme Court held to be invalid a
Nothing has ee-enlled elnee dannary to Wet" V statute which prohibited child labor through the
rant a change in Peney at tnle tllne· The denenl use of the taxing power. In that case the Court
for the fiscal year 1935, inet eleeed> Wae een` held that it was an attempt to deal with a sub-
siderahly less tnan had been .lereeaSl’ by tag r ject properly under the jurisdiction of the
President. The huge heW eetnnntnlente appreve ’ states. Nevertheless, recently the taxing power
during the session Were eentelnlllated at the has furnished the basis of such measures as
beginning. The Heuse Ways and Means Gene the Social Security Bill and the Bituminous Coal
mittee was entirely unaware_of any necessity f Regulation But .
or any intended Yeeemmendatlen fer new lanes Dangers in the use of taxation for social pur-
When it submitted as teeently as Jlnne 14. a poses are pointed out by Roswell Magill, former _
report favoring extension of the expiring excise tex adviser to the present Secretary Ot the
taxes. _ _ Treasury, in an article in the April issue of
Only in recent political deyelelnnente ean be Fortune Magazine. Expressing his personal view
found the baSiS_f01` theunexpeeted l`eeelnlnenda' that the use of a tax for social purposes is not
tion for imrnedlate action an a tal"l`eaelllng tax I necessarily an evil, he asserted that on the
program. other hand "the formulation of a series lei taxes
. . · which will meet the revenue needs of t e Gov-
Redleerlbutlon Of Wealth ernment, and which are distributed fairly over
Presentation of the President’S plan Wae a the population, is an enormously difficult task."
gesture toward satisfying radical demands tm` a Mr. Magill added:
redistribution of wealth. "If further adjustments have to be made with
Political demagogues always have barred On the intent of accomplishing desired social ends
the question of a rediSt1‘ih¤tl0I1 of Wealth- The as Well, the difficulty of the task is so increased
present administration has shown sympathxfer that there is danger that neither objective will
policies designed to attain such an Ob]€0t1V€· be accomplished. Moreover, there is much more
Submission of recommendations for taxes on likelihood of evasion if the tax system is being
wealth in the President’s annual message next used, not only to raise money, but to penalize
January or at the beginning of some subsequent some type of behavior currently regarded as
session would have occasioned no surprise. _ antisocial."
The press has reported a Widespread belief
that the announcement of the President’s pro- I The Budget
gram in the midst of plans for adjournment of
the Congress Was intended to deSt}`0Y the ettee‘ The program cannot in any sense be regarded
tlV€D€SS of 8.tl'»8.0kS [IPOD. t·h€ 3»dH]].H1Sl]I`qit»1OH fI`OI`I]. as at Sincere attempt to balance the budget. The
extreme radical quarters- It Was believed, the President in his special message to the Congress i
press reporte related, that the Obleet Wae te on June 19 frankly based his recommendations
check the political aSPl1`at10¤S of we Wha has on a desire "t0 prevent an unjust concentration
used the floor of the Senate_and the radio to gf Wealth and economic power.), The cOmpem_
spread share-the-wealth theories. tively small sum of $340,000,000, the original
In the opinion of the more extreme advocates estimate of the amount to be raised annually
of a redistribution of Wealth, the plan 1S_ m·· under the taxes suggested to the Senate Finance
adequate. Nevertheless, it contains implications Committee, would be insignificant in comparison
which are immediately disturbing to business. with the several billions of the Treasury’s annual
It is a sad commentary on present trends that deficit. —
an administration should stultify itself by coun- Business generally would welcome a genuine
tenancing for political advantage policies in- effort to balance the budget. Treasury deficits,
herently unsound. 7
6

 offering a constant threat of inflation, are a . h. h if i i
major factor in the undermining of confidence Wheee preeperllqi mess t' e We ere e e' erge
which business must have if it is to go forward. Pere ef eee pepu et'1en‘ . d . h .e
In an emergency such as has existed the tem- Welle eee texee ee large meemiee an m emii
porary financing of Treasury needs by borrowing gneee mlghte Seem ee efeer ng t' gem egeeeuteee
has been to some extent unavoidable. The busi- * ..ue}Deee Of 0 pereene e .me em e m ’ ih
ness community Was given a basis ioi. ooniidenoo 1nd1rect effects of an excessive taxationof wea t
when the President in his budget message in exteied all the Wey ee eee hulglblfiee (g°1ze§‘ it ee
January, 1934, held out a promise of a balanced T e eeeeuregemem gwee Y .e reel en i h
budget in the fiscal year 1936. The failure to the mevement fer e' redleembeuee ef Weee
make good that pledge in the budget ioi. 1936 opens the door to all sorts of wild ideas. Busi-
snbinitted last January bas been an element ness 1S held in a state of fear that the Congress
contributing to a loss of confidence in recent may be mdeeed te ge even further then prepeeed
months. t by the President.
In his special message on June 19 the Presi- Fm`ehermere* lf the Ceegreee mefebi edepee e'
dent held Ol1i»1'10 hope 01-8. balanced budget. The 1 m¤dm¢ .¤r¤grem at this Mme it ¤¤’¤r¤d¤·><=S
budget estimates of last January showed a . new pehelee gvhleh iegleelty may. be developed
prospective deficit of about $4,500,000,000 for beg greeer hegree me 8* er eeee1,(ei?‘ P .d e
the fiscalyear 1936. The deficit of only about . Ven m le epeele meeeege e reeten
$3,500 000 OOO dining the tisoai year 1935 inet hinted at a forthcoming assault upon all k1nds
} , , n • •
closed, in the face of a budget estimate of more ef eerperete heldmg eempeelee Heleteg e°m`
than $4,800,000,000, merely means that the Panms are °°*}‘m°” **0 all *mP°’m*?*> md“S*°*`Y·
deficits in 1936 and 1937 will be greater than The Presidente Statement thee ulumatslr the
previously expected. power of taxation should be used to eliminate
Public opinion will support an honest effort euneeeeeeeryn. heldmg eemeemee m eu lmeeef
to put the nationye iineneiei heuee in erder business constitutes an unfair attack upon legiti-
Doiioits oan be ended by the eiiminetiee ei mate business. The unwarranted effort by the
emergency exnonditnies iaekine eeenemie juetn administration to abolish all public utility hold-
fication and by a sound revision of revenue laws. mg eempeniee hhee eee as (adverse effeeee upen
If more revenue is to be obtained from income . Seeermee e t e uu my m .ue}°ry' T e thteeee
taxes, it should be by a broadening of the base against other types ef heldmg. eeiepemee 1S e'
of taxation iatbei. than by higher retee ee the similar deterrent to progress 1n 1ndustr1es of
top. many kinds.
Taxation and Recovery Individual Income Taxes
It is dinionit to imeeiee eeythine mere eb_ The proposal to increase income taxes on very
structive to recovery than the imposition or even itereie mcemeeeeiel-§OtteeVe’te]nd eieee not purport
the _ser1ous consideration of oppressive taxes. ie etieei eny Jus I e-eimnbp ter erliihee e' means
Bus1ness has been handicapped in its struggle to O e- emme e' Some O lee We .e’ Surtexee
get out of the depression by higher labor and mngme from ee to 80 per cent Op meemee m
other costs. The problem of the great corpora- excess Of e1’000’000’ at proposed m. retee Sue`
tions has been just as acute as that of the small ¥;,1eie;en,tO gm §e,FetetFmen§e Qomémttee   the
business men. Existing taxation, Federal, state ‘ y ep r men ’-are eslgne evewe y te
and iooai, eireedy ferme e ieree item in the prevent the accumulation of great fortunes.
overhead costs of any business. Proposals for sagggoegggel eemiietee Shevize probable weld ef
substantial increases inject an element of doubt ` ·’ ’ eemuesil ogglgilog egreleeeed iueates
1nto future business operations and exert a ham- On meemee e eve ’ ’ ‘ H   e beele ef m`
nering influence- eomes dutrimg the past few years It IS d1flicult to I
The eem 1 t h . i. . . 1mag1ne ow even th1s_amount could be raised.
that fI`OI'I'l 5 Ea? t°aXaE%eb$?bE$at€Zb‘EXFiY§§bit Z ¥“""a‘€‘Y the P°”‘°*°¤ Of mmes above $1·°°°»°°°
gradneted tex intredueee e new feeeer in the is subject to a surtax rate of 59 per cent besides
operations of all incorporated business, big and I e Iiermel fax of 4 per cent .
little. The higher brackets would mean an extra H ihe Meet returns evelleble these for 1933
burden on many ieduetriei eempeeiee u On tiled in 1934, there were only 46 persons with
8 P incomes of $1,000,000 and over. Their aggregate
9

 nel? lneeme Wee eelr $e1>o5o¤9o1‘ le 1932 If a sincere effort is made to balance the bud-
there were on1Y 20 bereone with incomes ef get involving elimination of unnecessary expen-
$1>ooo>ooo eee oven their aggregate eee ineome ditfires as well as an increase in taxation, addi-
being only $3o¤2o9¤ooo· The erereeed nlgher tional revenue can be obtained from income taxes.
rates Wedld eee here Ylelded mueh mere thee A broadening ofthe base of taxation will produce
en nddnlened $o»ooo>ooo» it tnot Innenr in 1933 a substantial amount of revenue. Those with
end even leee ie len- large incomes will furnish the bulk of it. The
There is little likelihood of a recurrence of the madjustmono of fotos Hood not bg Sugh as to be
situation existing in the boom year of 1929 when burdensome to those with Small incomes, 1
513 Pereone Witn lneomee ef nnooovooo er ever Citizens would take a greater interest in gov-
Yepnrted ee aggregate eee tnoome el $1212* ernment if more were tax-conscious. Fewer than
o98>784· In the Yeere betWeen 1923 end 192o¤ 4000 000 persons have filed income tax returns
inclusive, the aggregate net income of those with ,; oooh ’yoaI. Siooo 1930 as compared with about
leeemee el $l»eee·eee end ever reeeed eem e ] 7 700 000 in 1923. Out er 3,660,105 returns filed
nttle mere than nledooorooo ee leee tnon { for 1fl33 only 1,731,116 showed taxable income.
$5ee»llee»eee· l In 1923, about 4,270,000 er the returns were
Viewed feem tne etendbotnt ef eeeed toxotton   taxable. Political considerations have actuated
the present surtax rates in the higher brackets exemptions for as moo}, oo possible at the lgwgr
are excessive. The rates were increased in the ond of the Scale. Even o Very Small tax would
1934 Revenue Aer beyond tne point el noexnntnn cause citizens to feel a responsibility for the
productivity. The surtax applicable on income maiotoooooo of good govommomh
above $1,000,000 was made 59 per cent instead _
of 55 per cent as in the 1932 act. The Revenue _
Acts of 1926 and 1928 had maintained a maxi- C01‘p0r&t101*1 Income Taxes
mum surtax rate of 20 per cent on income above _ _
$100,000. The years in which low surtaxes on The proposed graduated tax on corporation in-
large incomes prevailed were a period of pros- comes, like the higher surtaxes on large individ-
perity and contributed generous returns to the ual incomes, is intended as a sop to the radical
Treasury. The yield from income taxes in those forces of the country. It is a tax on bigness. The
years averaged considerably more than double purpose is to discourage the massing of capital
the approximately $1,000,000,000 recently ob- in large enterprises by giving corporations with
tained through much higher rates. Experience in- small earnings a relative advantage. It is a direct
dicates that the best way to obtain more revenue attempt to penalize or destroy large corporations.
is to encourage business through the maintenance It is a device to force a reconstruction of our
of reasonable rates of taxation. economic system. It fits into the general program
Excessive rates on very large incomes en- for a redistribution of wealth.
courage investments of capital in tax-exempt The constitutionality of such a tax is doubtful
securities. This means a withdrawal of funds inasmuch as it is proposed to use the taxing I
from productive enterprise. Under excessive power for a purpose other than the raising of
rates income will not be reinvested in indus- l revenue and because its result would be to
try and capital will be withdrawn from it. There   confiscate private property without due process
is no incentive to those of large wealth to take   of law.
investment risks. The effect on economic condi- The President’s own explanation of the pro-
tions is injurious instead of beneficial. posal makes it clear that the purpose is a social
Income taxes have proved an unreliable source one rather than to assist in balancing the budget.
of revenue in times of depression. In the years The first estimate was that $100,000,000 addi-
following the World War income taxes accounted tional could be raised annually by the substitu- _
for considerably more than half of all ordinary tion of graduated rates ranging from 10 to 17%
receipts. With the falling off of business activity per cent for the existing flat tax of 13% per cent
only one-third of ordinary receipts came from on corporation earnings. It appeared subse-
this source in the fiscal year 1933 and a smaller quently that this estimate was much too high.
percentage in the fiscal year 1934. Excise and If the purpose were only to get additional rev-
other miscellaneous taxes were imposed in the enue, a very slight increase in the flat rate would
Revenue Acts of 1932 and 1934 to make up for produce a much larger amount and without a
the shrinkage in revenue from income taxes. resultant disorganization of corporate structures.
10 11

 The President in his special message conceded _
that "the community has profited in those cases profit on a small investment. Taxation of this
in which large-scale production has resulted in character is utterly indefensible.
substantial economies and lower prices." Never- The financing of large enterprises would be-
theless, he offered a program designed to handi- come increasingly difficult under such a plan of
cap large—scale operations. He would first in- taXation. Investors would hesitate to place their
crease very greatly the tax on earnings of large money either in a new project or to assist in the
corporations. Then, he would tax dividends re- refinancing of an old company. Facing investors
eeived by egrperetiens to prevent evasion would be a pI`OgI‘€SSiV€ limitation of p1‘OfitS 8.S
through a reorganization into subsidiaries. Next, the Volume of buSineSS increased.
he would make the holding company form of Investors Would be inclined to turn to small
organization prohibitive through the power gf enterprises with earnings subject to a low rate
taxation. His emphasis on the benefits derived cf tax- The growth of small Speculative busi-
by large corporations from the Federal Govern- ri neeeee Wenld be stimulated. The money of
ment and particularly on the interstate character emeii St¤<>k.h¤lderS Weuld he ehiited from large,
of their business seemed to foreshadow new Weii·nne»ne·ged eeiheretiehe te hy-hxnisht Prel-
proposals for regulation, supplementing the ex- at eete Phemieihg e higher rate of dividends. A
tension of the Government’s power already " Pieihinin Wehid be Pieeed Oh ihetheiehey end 8-
aooornpliehed under the Seeuritiee Act and the discount on the efficiency characteristic of suc-
Securities Exchange Act. eeeeinii large ehteihrieee
The entire program looks toward the disinte- The eiieei- ef eneh e tex Weuld he defiativnary
gration of large industrial units and their re- end e deiiniie ding nlien hneineee i`ee0Vei`Y·
placement by smaller enterprises. It points to an The iieii tex en eeiheieiien eeininge hee
effort to break up the great industries which Pieved in he the nieei eelniiehie While e gi`ed·
have played ee conspicuous a part m the d€V€j_ uated tax _on individual incomes has much to
opment gf the nation commend 1t, the same principle can not be
While the aim is to hit wealth, an actual effect nhpiieei eeiieieeieiiiy to earnings of eerpora-
would be to affect adversely investments of thou- hens- The exlieiienee With the excess Pieiite
sands of small stockholders in large corporations. tex dining the Wei Shewed then e»dminiSt1‘atiVe
The Ownership Of most Of the large Corporations difficulties were very great in attempting to base
which would pay the highest rates Of tax is the tax on the rate of return on invested capital.
widely scattered among citizens of small means. The exeeee Pieiiie tax h0W ih ehieet under the
On the ether hand many corporations which are 1934 Revenue Act, wherein a tax is assessed on
primarily family affairs are relatively small the exeese eVei` e eheeined return on the “ad-
although owned by persons of great wealth. The idslied declared .Vdid€” Of 8* Ceipeiniieni is ieee
small stockholders of large corporations would dndicnii te Eidininieiei and at ieeet is intended
suffer a greater reduction in returns in proportion te he equitable- The administration, however,
to their jnvegtment than Would tha Wealthy has chosen to ignore all considerations except
owners of stock in small corporations. In this ine Vehnne ef earnings in ite new sraduated tax
way it would constitute discrimination against i Pi`ePeee·i·
the small stockholders.   It has been generally recognized that the tax
Values of common stocks depend upon earning 1 on corporation earnings has been kept at an
power of corporations. Taxes on earnings cannot ri- ePPTeeeiVeiY hish level. At the end of the World
ordinarily be shifted but must be borne by the VVar corporations were paying a nat tax Of 10
stockholders. Higher taxes on earnings reduce per cent plus an excess profits tax The 1921
the value of the equities of common stockholders. act repealed the excess profits taxi increas`
Qraduated taxes on earnings of corporations ‘ the flat rate to 12% per cent The rat mg
which are not based on the amount of invest- increased to 13% perdcent with the re eal iefvtllds
ment are grossly inequitable. If the amount of capital stock taxi in 1926 but was r dp d t 12 V
earnings is the only criterion as proposed in the per cent in 1928 The present rated fwfi3e 0
President’s plan, the tax on small earnings cent was established in the Revenuerii t fdi9i3i2r
from a large investment would be much greater The present excess profits tax is 5 C O t i
than the tax on lar-ge earnings from a small excess earnings above 127 per cieiiit wifi thn
investment. A 5 per cent profit on a large invest- "adjusted declared value " 2 O 9
ment would be harder hit than a 1000 per cent If the rates proposed before the Senate Finance

 Committee were adopted, it would mean a re-
duction lll tax f01‘ 00I`p0I`&ti0Hs with het iheome Federal estate tax imposes graduated I`9·t€S Upon
not in GXCGSS of $40,000. The Suggested rates are undivided estates ranging up to 60 pe? Gent above
10 Pe Sent 0¤ het ihteme het in extess ¤f 02000 $10000,000. Credits 000 allowed for payments
11 PEY tent En het iheeme between 02000 and made under state inheritance tax laws 00 to 00
$500000 12 Per 0eht between $50000 ehd 0i5»ooo» per eent of the portion of the Federal estate tax
and 13 per cent between $15,000 and $400000- represented by the lower rates of the 1926 aet.
Taxes on all corporations with earnings above Gift taxes, which are intended to prevent evasion
$400000 would he i¤Er¤¤SEd, the r>r¤n<>Sed tetes , of estate taxes, 000 imposed 00 to .0 maximum of
being 14 per cent between $40,000 and $100,000, 45 pe,. cent above $i(),()()(),()()()_
it P0? EE¤t between $100000 0000 t300»000» it The 1934 rates 00 undivided estates were 000-
per cent between $300,000 and $1,000,000, 17 ried to eueb a point as to be confiscatory, the
per cent between $1,000,000 and $20,000,000 and 1926 maximum having been 20 per cent. A een-
17% per cent above $20,000,000 The highest., ' r'* Sidgygbig part of the very large estates already
rate would apply to $01119 of the best khowh of is taken by the Government. What is HOW PTO-
the ietge eoi`Poi`e·tiehs· Some ieee oi the teh posed is that after the balance then remaining
teething etteet of the epleiieetiioh of the highest x. is distributed among the heirs the Government
Yetes is siren by figures Whieh Show that 23 of i shall impose an inheritance tax up to a maximum
the largest corporations have 4,809,000 stock- ef 75 per oent above $10,000,000.
holders. Death taxes have existed since ancient times.
The United States enacted its first estate tax in
Inheritance Taxes 1916, having in earlier years experimented for
brief periods in war emergencies with legacy
The new inheritance tax system proposed by taxes. At the time of the enactment of the Fed-
the President is the only part of the pending 0001 law in 1916, 43 states had 0 death duty of
Ptdgmm which Premises eyehtdeiiy to raise 3 some kind, most of them being on inheritances
ieiiiy shhstehtisi sum of money: It Wedid Det rather than estates. Now only one state, Nevada,
figure ill the balancing of the 01`diHe~1“y budget and the District of Columbia are without such
A if the President’s suggestion is adopted that the a law, Most foreign nations have death taxes.
revenue from this source be segregated for use Estate and inheritance taxes have come to be
in a reduction of the public debt. Also, no accepted as a legitimate method of obtaining a
revenue could be expected in the immediate steady source of revenue for both the Federal
future. Liquidation of estates requires time and and state governments. In order to maintain a
bequests from large est.ates would not immedi— steady flow of revenue, the rates should not be
ately be passed on to the beneficiaries. excessive. If the taxes are raised to such a point
Just as with the higher taxes on large indi- as to accomplish the breaking up of large estates,
vidual incomes and the graduated tax on cor- the revenue to be gained in this field ultimately
poration earnings, the inheritance taxes are the will shrink to the vanishing point.
answer to a sociali