The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-13

Wr00D 0rpose.
A Raid on tho Prosperity 81 the
State.
There seems 10 b no end to the pro-
Dsaals Of politicians to diminish the
suUply Of capital or lessen its availa-
unity for the promotion Of prosperity
where the most attractive opportunities
for profitable enterprise are offered.
New York State threatens to add itself
b the list Of imbecile Commonwealth
which seem determined to persist in the
extfavagant increase Of public expendi-
ture supported by penalties upon pri-
vate capital seeking Judgment or en-
ployment within their borders The So
called McClelland bill at Albany for the
fevidon Of the Inheritance tax law de-
serves to be called. in 10 many words q
projected raid on the prosperity Of the
State.
It is a measure which has not re-
eeived the attention that 1t deserves,
and there Is danger that its menace
may be inflicted unless intelligent oppo-
xition to 1t is forcibly expressed. There
is always danger that the stupid IA
cility with which the taxing power is
directed against obviously accessible
forms Of property may conducc to the
real damage OF popular interests
through the default Of effective antae-
Onisn. A formidable army Of oppo-
nents mustered at Albany this week at
a hearing ON the McClelland bill. and
overwhelming arguments were pre-
scented against its passage, but 1t is
never safe 10 assume that legislators.
confronted with the temptation to tax.
will resist temptation under the pres
sure Of political considerations which
drive them to vote ever swelling appro-
prlations.
What appears to be the most difiicult
thing to beat into governmental minds
70 the mobility Of capital. As long as
a refuge is provided capital will tend
to retreat from any Jurisdiction where
The laws promise to place 1t at a dis
advantage. Society Is organized to-day
O basis Of private capital. despite the
pssvalence of propagand as derived from
socialistic concepts. and large and in
creadng supplies Of private capital are
necessary to the progressive prosperity
q every community. OF no community
can this he more truly said than Of New
York State. 1t is the most populous
and the wealthiest State in the Union
because It offers to private capital the
most attractive inducements for en-
ployment.
Capital Is modified here in greatest
amount because its profitable use has
been most certainly assured here. 1t
would be easy to change all that II the
state should embark on u public policy
which would compel the withdrawal Of
capital to other States or to other coun-
tries; and the same legislation would
operate to keep outside capital from
lowing IN, although imports of capital
may be Indispensable to the general
welfare,
All experience and all reason go to
show that the McClelland bill Is pre-
cisely the kind of legislative measure
which must produce II destructive eco
noniic effect. In order to understand
its significance a brief statement should
be made about the history Of inheri-
lance tax legislation In New York.
The first law went into effect In 1886.
Since then the population of the State
has increased ~ per cent. while the
expenditures of the State Government
have expanded 700 per cent. The in
heritancc tax has been made, by sue
cessive changes In the law, to yield the
largest single item Of revenue, the re-
turn from It increasing from 5000 in
1856 TO $12,OOO.OOO In 1912. Statutes
dealing with the inheritance tax have
been passed at the ratio OF about three
Q year. and resort to II has always
bcen the ready reliance OF politics
In junctures created by II! aavisasi
schemes Of governmental extravaganza
The McClelland bill proposes the third
sweeping change in the inheritance tax
/. isw In period Of five years. The first
90 made by tho act Of 1910, the 30
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