The Press., 1898-08-04
THE TAXATION OF MILLION
AIRES.

Among the Millionaire suburban resi-
dents of New York whose residence prop
erty was greatly increased last year In
assessment for taxes was William Rookie
feller, who carried his case to the courts.
A referee was appointed to take evidence
in the matter, and he has reported to the
court that the assessment should ,sbe
$343, ,775, instead of SO, 1886, 900, which the
local assessors had placed upon it. The
property was located in North Tarrytown,
and it was shown in the testimony that
the assessor who increased the valuation
by over 600 per cent. above the referees
valuation was plasterer by trade who
had declared after his election that he
would put the taxes on the rich and drive
them out of town. Probably the court
will confirm the referees valuation.
1t does not appear exactly what Mr.
Rockefeller had invested in the property
He Is said to have paid $15O,000 for it..
The old house was torn down and a new
one built, and altogether he is supposed
to have expended million dollars, per-
haps, on the estate, though we depend on
the newspapers for the figures, the refer
ee's report apparently not touching on
this point in the case. This raises an In
teresting question, whether the invest
ment can properly be considered in deter
mining the taxable value of a piece of
property. The Rockefeller property was
evidently overvalued by the assessors
about 100 per cent. or more, even when
the cost to the owner Is made basis of
reckoning, and criminal malice has clear
ly been proved against them in case. But
II expenditure by the owner Is to be con-
sidered, the referees valuation would be
as far below the proper valuation as that
of the assessors was above assuming
that the property has cost Mr.. Rockefel-
Ter million dollars.
Opinions may be said to differ in re-
spect to the basis of assessment In excep-
tional cases OF a very rich mans very ex-
pensive home, but it is obviously the case
that the "fair market value" basis may
sometimes be unfair. Such properties,
In the extreme instances, may be said to
have no market value. 1t requires buy
ers and sellers to establish market, and
the possible buyers in such an instance
are so few and SO widely scattered as to
be hardly worth the counting. 1t has
been predicted that the next quarter of a
century will produce Millionaire in the
United States, standing far above all
about him In material possessions. II
this Millionaire should build suburban
home commensurate with his wealth, ex-
pending thereon, say, $50, 900, how
should it be assessed for taxation? At a
fair market value2 But it has no such
value, properly speaking, in country of
some few ordinary millionaires, and where
the many possess only a bare living in
come. II it were assessed at about what
1t might bring at forced sale, the tax val
uation would have to be reduced to mil
lion dollars or less, and the Millionaire
would go untaxed on the bulk of the
wealth he had Withdrawn from produc-
tion and was lavishing upon himself. A
fairer valuation would appear to be fig
ure approximating what the market value
might be If many billionaires existed to
form something of a market for such
property, and this would require that the
actual amount expended on the billion
| aires residence be taken into account.
The case of the Millionaire Is measur-
ably apposite to the present situation.
Striking inequalities In wealth present a
problem in the taxation OF non-productive
property which cannot reasonably and
fairly be solved by clfnging strictly to
the market value basis of valuation for
as we ascend the scale Of individual pos
sessions the market for such property
grows smaller and smaller until point
Is reached where no market can be said
to exist Then 1t is that the fair market
value standard of tax valuation may JUST
| II be abandoned. Springfield Republican.