Modern Economic Problems eBook

Frank Fetter
This eBook from the Gutenberg Project consists of approximately 554 pages of information about Modern Economic Problems.

Modern Economic Problems eBook

Frank Fetter
This eBook from the Gutenberg Project consists of approximately 554 pages of information about Modern Economic Problems.

[Footnote 9:  See above, sec. 3.]

[Footnote 10:  E.R.A.  Seligman, “Essays on Taxation” (1895), p. 156.]

[Footnote 11:  Seligman, op. cit. p. 136.]

[Footnote 12:  See above, sec. 7.]

[Footnote 13:  See above, sec. 5.]

[Footnote 14:  The assessment feature of this proposal is exemplified more nearly than anywhere else, tho still imperfectly, in the “Indiana plan,” in which, however, the true concept of property is recognized only in so far as the shares of corporations of which all the wealth is taxed are not assessed to the shareholders.]

[Footnote 15.  This need not prevent a supplementary system of graduated taxation on incomes.  See below, ch. 18, sec. 10.]

CHAPTER 18

PERSONAL TAXES

Sec. 1.  Inheritance tax laws.  Sec. 2.  Fiscal importance of inheritance taxes.  Sec. 3.  Income taxes; general nature.  Sec.4.  Income taxation by the states.  Sec. 5.  History of federal income taxation.  Sec. 6.  Events leading up to the law of 1913.  Sec. 7.  Main features of the law.  Sec. 8.  Exemptions and stoppage at source.  Sec. 9.  The graduation principle.  Sec. 10.  A system of taxation.

Sec. 1. #Inheritance tax laws.# There remain to be considered at least two important forms of taxation that are essentially personal in their unit of assessment, in contrast with the foregoing which are (or should be, if consistent) essentially impersonal[1] These are the inheritance and the income taxes.

Until 1916 little use had been made of inheritance taxation for federal purposes.  In that year, however.  Congress passed a law which was expected to obtain about $20,000,000 a year from inheritances.

Forty-one states in America have inheritance tax laws (in 1915) which apply generally to property passing either by will or under the intestate laws of the state.  The tax is for state purposes.  These laws differ in many ways, but are nearly all alike in certain respects: 

(1) In applying to the separate legacies rather than to the estate as a whole.[2]

(2) In taxing legacies to relatives in the direct line at a lower rate (or even exempting them entirely) than those to collateral relatives.[3]

(3) In exempting legacies below a certain amount.[4]

(4) In having rates progressing with the size of the legacy; (this feature is less general, but is prominent in most of the later laws).

Sec. 2. #Fiscal importance of inheritance taxes.# The fiscal importance of inheritance taxes has been comparatively not very great (except in New York State), but it has rapidly grown.  In 1903 the receipts from this source (in 27 states) were over $7,000,000; in 1913 they were (in 35 states) $26,000,000.  The spread of inheritance taxes and the higher and progressive rates applied are an expression in part

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Modern Economic Problems from Project Gutenberg. Public domain.