New-York tribune., 1910-12-26
FEARS EXODUS OF RICH
state Controller Favors Change
of Inheritance Tax Law.
CAN. BE EASILY EvADED
Change of Domicile Circumvents
Statute, Says Mr.. Williams
Returns Not Satisfactory.


men Of wealth may circumvent the recent
~ enacted amendments TO the inheritance
-. law is pointed out by State Controller
rlsrl Williams in hts Forthcoming ahhuai
,eport to the Legislature These amend
.,xr,s cree.es a proeressive rate of tax
~he,, ,he individual rate OF transfer ex-
,eeds certain stated sums. with view to
Increasing the revenues of the state by
taxing those who were believed TO be most
Able 20 bear the burden.
Certain otjections 10 the Law are raised
hv the Controller, who recommends tnat
TIE Legislature give serious consideration
to the effec, Of the present transfer TAX
law on the general interests Of the state
The net receipts from the tax on trans
sers of decedents' estates during the last
fiscal year were ss,12.77s5 81. an increase OF
ri ,5aYn& over the tax collected the pre-
cedins year This increase. the Controller
eays is not attributable to the amend
roents OF 1850 to the tax law, but 70 me
fact that during the year six estates OF un-
ususl magnitude yielded an aggregate TAX
~ 81 COS 400 The increase was consequent
IL no. uniform throughout the state. Al
Though The number of estates appraised IN
New York County increased 3e-5 per cent,
she increase in revenue from that county
was only 15.4 per cent. The greatest IN
crease II, revenue was in Kings County.
where the net receipts were 81 per cent
more than the previous year This may be
accounted for by the fact that in seven
estates an aggregate tax Of s233,6ls 81 was
paid.
Controller Williams calls attention TO the
fact that the number Of estates appraised
s.nder the provisions OF the new progress
I've inheritance tax law has been so small
What he has caused the tax to be calcu-
Hated at the new rate on all estates on
(which tlle tax has been paid during the
EAST fiscal year IN the fifteen counties in
which the tax IS paid directly to the Con-
trcllers Office. The results show that had
she tax been SO levied it would have
amounted TO approximately S,e25.oeo OF
which $3.50 90 would have been net gain
This amount however. includes seven es-
.stes which actually paid tax agsregat-
sur sIeasgn, which tax at the new rates
would have amounted 10 s6,1A.o9-
Returns Should Have Doubled
Theoretically the Controller says, the re-
surrs from the transfer tax would have
been more than doubled, but In practice
Ne believes no such increase in revenue
would have been obtained. Continuing,
she Controller says:
I base this belief upon the ease With
can be done by a mere change OF domicile-
TO 2 man Of wealth having two or more
residences situated in different states, as 1s
-7ot infreo,entlv the case, the selection of
. home dcrnicile. is largely a matter OF
sentiment. To him . change OF aonliclie
snvalves little more than mental act, d
termination to abandon one residence as
his home and 70 establish II in another II
occasions little or no change IN ms 1hooe Oh
living. ..s ,,,s
,seferrnined 10 have his fortune descend un-
hi he
his dcmicile from TINS state 10 another TO
.sH ali his property situated outside the
state If he desires 10 go further ana 10
place his New York property IN q IKE pc DO
IN snotf1er state ana tc transfer his prop
er1v TO it in payment for ITS stock
Exodus Has Already Begun.
After giving an analysis of the figures
already referred to, showing the tendency
70 e1ade pay ing the tax, the report says:
do not believe that ! am voicing false
FEARS wnen predict mat a,,58 Slcn eitizens gSerIi
Eii i;deDce D Is not lacking that the exodus
las already begun. Although the returns
5-rorn THO transfer tax for next year 1t'aS
show an increase feel certain that uh-
5-ss the law is greatly modified tile re-
7urns five years hence viii De less man nan
4b,.7- were under the old rates Nor VII
80 loss OF revenue from such an exodus
10 confined 30 11e transfer tax alone rue
1euurns from the tax on personal property
ti,int the legislature should consi1er
Well before continuing poilcS winch
men NJ no have n large interest in the ma 5e-
rial deyelopmeis 81 our state ana Eico
srn generous contributors 10 the support
uf its charitable and educational mSHtn-
tioIls
: second objection which may be urged
against the present law Is the InJusuce
Witch il does oUr domestic corporations
-;,ie is not theory but a condition In
stances hare lately been brought TO my at
IA
snyes-r1ent in New York through banking
S,nS.s y t,CI. bv reason OF their connec-
lions vvo,,Id under normal conditions have
Invested il in the stocks of domestic cor
Dorations. has by reason of the hardship
~ this law been diverted from tie natural
course and invested in the stocks of cor
7sora+jons domiciled other states. No
which a continuance Of the present policy
must have upon the coTpoatlors donllcllSo
here .
-,orafeti under the banking law OF the
state 10 care for the properly OF Its cltzens
- ~ me exactions of this law / there
fore recommend that the Legislature give
-ser;o,ts consideration TO the effect of the
1,reeent transfer tax law upon the gen
oral interests OF the stare
tJroes More Economical Collection.
Alihou-il the cost Of collecting the in
7.e~i12nce lax has decreased from .055 last
Ear % 42z this year. the Controller be-
.li..yes thai the cost OF collection is entirely
,iisproDortionate 10 the cost Of collecting
sdter taxes. lie reyerts TO his suggestion
O.. last vear made 10 the Legislature. TO
,ffect 4 more economical collection of the
Tx 4 change in methods suggested,
IN, Controller believes. would effect saw
80. Of not less than S150 COO a year. and
7neir further consideration is recommended.
i-.hs =, Iper cent Of the cost of collecting the
transfer tax consists of attorneys fees,
szsvs the report, the greatest opportunity
Tor economy exists IN this item
Controller Williams recommends an
amendment to the statute TO provide for
-he appointment by the Controller Of sal
:ried transfer tax appraisers for each Of
IL. fort~-six counties in which the County
Treasurer now performs this service, and
,bat such positions be classified by the
civil Service Commission competitive.
He also recommends that the Controller
he authorized TO engage such additional en-
,,loves in the transfer tax bureau and to
r,-oride such equipment as shall be neces-
sary 10 enable him TO collect and preserve
information concerning the value Of real
estate and personal property. make proper
Investigations for tie discovery Of property
subject to the transfer tax, and to estab-
liSh in the transfer tax bureau the neces-
and that ~