This report is the first response to President Nixon's request to the Commission for an evaluation of the proposed replacement of school property taxes by a Federal value added tax. The report findings reveal that a federal program to bring tax relief is neither necessary nor desirable, and the Commission suggests that the States assume a greater share of public education financing to relieve intrastate disparities in public education finance. Additionally, the Commission urges property tax reform in lieu of property tax replacement through a Federal value added tax. (JF)