idence to another state. A Federal tax could be raised to a
much higher level without prompting the two possible methods of
evasion--one of which would be the legal transfer of the property during
lifetime, and the other a complete change of residence to some foreign
country. This second method of evasion would not constitute a serious
danger, because of the equally severe inheritance laws of foreign
countries. The tax at its highest level could be placed without danger
of evasion at as much as twenty per cent. The United Kingdom now raises
almost $100,000,000 of revenue from the source; and a slightly increased
scale of taxation might yield double that amount to the American
Treasury, a part of which could be turned into the state Treasuries.

There has been associated with the graduated inheritance tax the plan of
a graduated income tax; but the graduated income tax would serve the
proposed object both less efficiently and less equitably. It taxes the
man who earns the money as well as him who inherits it. It taxes earned
income as well as income derived from investments; and in taxing the
income derived from investments, it cannot make any edifying
discrimination as to its source. Finally, it would interfere with a much
more serviceable plan of taxing the net profits of corporations subject
to the jurisdiction of the Federal government--a plan which is an
indispensable part of any constructive treatment of the corporation
problem in the near future.

The suggestion that the inheritance tax should constitute a pillar of
central rather than local taxation implicitly raises a whole series of
difficult Constitutional and fiscal questions concerning the relation
between central and local taxation. The discussion of these questions
would carry me very much further than my present limits permit; and
there is room in this connection for only one additional remark. The
real estate tax and saloon licenses should, I believe, constitute the
foundation of the state revenues; but inasmuch as certain states have
derived a considerable part of their income from corporation and
inheritance taxes, allowance would have to be made for this fact in
revising the methods of Federal taxation. It is essential to any
effective control over corporations and over the "money power" that
corporation and inheritance taxes should be uniform throughout the
country, and should be laid by the central government; but no equally
good reason can be urge