Maimonides Prize Winner Links
Views of Philosopher With Freud

Taxes and Your Future

Editor's Note: Guidance on
important problems provid-
ed by Jewish Welfare Fed-
eration-United Jewish Char-
ities Endowment Fund tax
advisory committee. Profes-
sional advice about issues
discussed in these columns
should be secured from your
attorney or an estate plan-
ning adviser. Questions of
general interest in these mat-
ters should be addressed to
"Taxes and Your Future,"
in care of The Jewish News,
17515 W. 9 Mile Rd., South-
field, Mich. 480'75.
* *
The U.S. Treasury, as part
of its report to Congress dur-
ing the 1969 income tax re-
f o r m hearings, submitted
proposals on the estate and
gift tax laws. Congress main-
ly reformed the income tax
laws, making few changes in
the estate and gift tax laws.
House Ways and Means
Committee Wilbur D. Mills
(D., Ark.) says that he hopes
his committee can begin con-
sideration of estate and gift
tax reform at the earliest op-
portunity in this session of
Congress.
Estate ani gift taxes are
presently two separate taxes.
The individual who holds his
wealth in forms which lend
themselves to distribution by
gift during life rather than
at death may employ a num-
ber of major advantages
available through the gift tax
system. He can take advan-
tage of liberal gift-tax-ex-
emptions. For gifts in excess
of the exemption, gift tax
rates are much lower than
estate tax rates. Then, after
a lifetime of giving at rates
than estate tax rates. Then,
after a lifetime of giving at
rates that do go higher and
higher, the taxation of the
individual's remaining estate
starts over with a new set of
exemptions and with a whole
new rate schedule starting
at low rates.
Further, the gift tax rates
are applied only to the net
amount of the gift so that the
amount used to pay the gift
tax does not enter the base;
the estate tax, however, is
leWed on the full value of
the estate which includes
whatever amount is needed
to pay the tax.
The advantages of lifetime
giving over bequests at death
great-
are more valuable,.
er the amount of wealth
ealth in-
volved. By splitting $1,000,-
000 worth of property be-
tween lifetime gifts and be-
quests at death, the heirs
will receive about 15 per cent
more than if the property
were passed entirely in the
estate at death. But splitting
property worth $5,000,000 be-
tween lifetime gifts and be-
quests at death will increase
the amount available to the
heirs by as much as 37 per
cent.
Estate and gift taxes
might be unified into a sin-
gle-transfer tax. Under this
unified transfer tax:
1. Lifetime gifts and trans-
fers at death would be added
together to determine the to-
tal wealth subject to trans-
fer taxation;
2. A single exemption and
a single rate schedule would
be made applicable to that
total;
3. The base of the gift tax
would be grossed up to in-
clude the amount of tax,
paral!el to the treatment for
estate taxes.
Charitable gifts under uni-
fied transfer tax would qual-
ify for an unlimited deduc-

tion whenever the gift is of
a type which qualifies for
the income tax charitable
contribution deduction.
Proposed Elimination
of Arrangements for
Generation Skipping

Treasury view of problem:
Present law encourages the
establishment of complex ar-
rangements under which
property is left in trust for
succeeding generations. The
objective of these arrange-
ments is to avoid estate tax
by skipping its application to
the succeeding generation in
the wealth-transfer-sequence.
Under even more elaborate
arrangements, trusts may be
established to provide in-
comes for children and then
for grandchildren, and so on,
with the trust property ulti-
mately going to great-grand
children, or beyond. Thus,
estate taxation can be
skipped for two or more en-
tire generations. The enjoy-
ment of the property by each
successive generation is not
skipped—it is only the estate
tax that is being skipped.

MILWAUKEE — Although
Freud's antagonism to reli-
gion is well documented in
his writing, he denies his own
thesis and advocates retain-
ing the religious doctrinal
system as the basis of edu-
cation and of man's com-
munal life, according to Dr.
Abraham N. Franzblau, re-
cipient of the first annual
Maimonides Award of Wis-
consin.
The award, established by
Mount Sinai Medical Center
and the Wisconsin Society
for Jewish Learning, is pre-
sented each year to a Jewish
physician who has also made
creative contributions to He-
braic and Jewish studies.
Dr. Franzblau of New
York, was honored at the
Jewish Center here.
A pioneer in modern psy-
chiatric methods, Dr. Franz-
blau founded the first chair
of pastoral psychiatry ever
established in 1937, at the
Hebrew Union College, Cin-
cinnati.
In his lecture entitled "Re-
ligion and Science—Their Ul-
timate Harmony," Dr. Franz-
blau noted that "in our day
the problem of the har-
monization of religion and

science, faith and reason, is
perhaps even greater than it
was in the time of Maimon-
ides . . . The anti-establish-
ment, anti-authority, anti-re-
ligion, drug-sodden "now"
culture threatens to drag
down with it much of the
adult value-system.
"In the face of such con-
flicts and dilemmas today,
one need not blush to seek a
harmonizing principle- . . .
Freud was deciated, like Mai-
monides before him, to the
development of the rational
intellect above all else," Dr.
Franzblau said.
He attributed to Maimon-
ides the introduction of a ra-
tional, scientific and critical
spirit into the realm of reli-
gion. "While harmonizing re-
ligion and science, faith and
reason, Maimonides pro-
claimed the indispensable
and indissoluble partnership
of both, and drew a clear
battle line against those who
would embrace either one
alone, without the other,"
Dr. Franzblau said.

We oppose despotism and
slavery, whether imposed by
state or individual. — Ber-
nard M. Baruch.

THE DETROIT JEWISH NEWS

18—Friday, Sept. 28, 1973

S incere

Wi3heJ for

Ile flew Year,

From

Al Steinberg

And

ART MORAN
PONTIAC

on Telegraph Road
Just North of 12 Mile Rd.

R
N

353-9000

W. 12 Mile,

-c

.......29300
Telegraph

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cn

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A substitute tax might be
imposed upon arrangements
accomplishing the avoidance
of transfer taxation for one
generation or more. This tax
would be imposed at the time
enjoyment of the transferred
wealth actually passes to
each succeeding generation.
The tax would not be appli-
cable to transfers whether
direct or in trust which have
heretofore become irrevoca-
ble.
Treasury estimates that
$15 billion a year falls com-
pletely outside of our income
tax system when appreciated
assets are transferred.
Our next column will ap-
pear in November and will
discuss how the Treasury
views the capital gains tax.

May IL peacelut 3pirit oi 1413

Jl oticlay remain wit4 you and your
l oved ones during Ae coming ear

MICHIGAN NATIONAL BANK

We Extend Our Best Wishes For a Year of
Abundance, Peace and Health
To All our Friends and Relatives

Mr. & Mrs. Max Fisher

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