Section 1203 (b) (6), Revenue Act of 1926 Vol. II-Part 2 Printed for the examination and use of the members of the committee NOTE. This report has been ordered printed for purposes UNITED STATES WASHINGTON: 1933 H 3-7-52 LETTER OF TRANSMITTAL CONGRESS OF THE UNITED STATES, JOINT COMMITTEE ON INTERNAL REVENUE TAXATION, Washington, January 28, 1933. To Members of the Joint Committee on Internal Revenue Taxation: There is transmitted herewith a report on "Federal and State Death Taxes," as prepared by the staff of the committee. The report deals not only with the present status of estate and inheritance taxes, but also with the history and development of these levies. In addition, there is a brief discussion of the principles upon which death taxes are based and of the difficulties encountered in their administration. The report concludes with comments on various phases of the subject matter and suggestions for improving this form of taxation. It is hoped that this discussion of death duties may serve a useful purpose in connection with future legislation on the subject. Very truly yours, J. W. COLLIER, Chairman Joint Committee on Internal Revenue Taxation. BUREAU OF GOVERMENZ III LETTER OF SUBMITTAL CONGRESS OF THE UNITED STATES, Hon. JAMES W. COLLIER, Chairman Joint Committee on Internal Revenue Taxation. MY DEAR MR. CHAIRMAN: There is respectfully submitted herewith a report on Federal and State death taxes, as of July 1, 1932. The study is chiefly factual in character, although some comments and suggestions have been made on various phases of the subject. The report has been divided into five main parts, as follows: Part I, historical facts; Part II, present status of death taxes; Part III, principles upon which death taxes are based; Part IV, difficulties of subject matter; and Part V, comments and suggestions. There is also included an appendix containing important data on this subject. At the conclusion of our extended study of this subject, we do not hesitate to state that, in our opinion, a tax on the transfer of property resulting from the death of the owner appears fully justified. When the tax is graduated in a proper manner it is based on the principle of ability to pay and is a good revenue producer. There is more doubt in regard to the best form of death duty. The two principal existing forms are the estate tax and the inheritance tax. The first is levied upon the entire net estate before distribution and the second upon the respective shares of the beneficiaries. The first form is the easier of administration, but the second appears to be more equitable. Much is to be desired in regard to the simplification of our death duties. The Federal Government has two estate tax laws in force, 1 State has two estate taxes and one inheritance tax, 27 States have both an estate and an inheritance tax, 19 States have either an estate tax or an inheritance tax, and only 1 State has no death duty of any kind. Some of the State laws have many points in common, but the majority are quite divergent. It is apparent that much could be done in the direction of simplification and uniformity by the cooperative efforts of our Federal and State Governments. A case recently came to our attention where the property of the decedent was located in 10 States. The difficulty is dealing with the Federal statutes and 10 different State statutes is obvious. No final conclusions have been arrived at on these questions in the report, but it is hoped that a basis of fact has been established for their ultimate solution. Respectfully submitted. IV L. H. PARKER, Chief of Staff. |