New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-11-15

- IN 1910 10 NlZ IN 1918; Niagara rails
from So TO S2l. and in Buffalo from
Sll to ST.. In the matter of net in
debtedness the increase has been not
able in all but three cases
Consider the situation in Now York
City, for instance. According to the
testimony Of Mayor Mitchell. even II
we assume that the cost Of govern
ment can be kept at It's present level,
the city will have to raise exclusive
Of the state direct tax. for the pur-
poses OF interest on serial bonds, re-
demption Of serial bonds and the quota
of public improvements. ard (begin-
ming with 1879 interest on subway
bonds, the following amounts which
are additional 10 its present budget Of
almost S200000,000: In 1917, s10,187,-
600; 1918. s1e,4OO,OOO; 1919. s34.719,-
600. and 1920. S34, 1884, 900
"The testimony of the experts in
many lines of trade and commerce all
pointed Enthusiastically to the fact that
this great and increasing burden has
been largely borne by one class OF in
dividuals-to wit. the real estate own
ers and their tenants. Whenever the
real estate owner is able TO shift the
tax TO the tenant, il means that the
largest burden is borne by the poor,
who are least able 20 pay the taxes.
Burden Too Great for Real Estate.
IF, on the other hand, the owner Of
real estate is unable to shift the tax,
the new burden amounts TO decrease
In his income, and therefore to fall
in the capital value of the real estate.
At the New York hearings two impor-
tant facts were brought out: %
hat al utot -, l,11 aan
not bear any increased burden without
destroying capital value; (2) that the
investments of insurance companies.
savings banks, etc, having large part
of the savings of the poorer classes
invested in real estate mortgages,
might be seriously impaired by any
considerable decrease in the value Of
real estate
"All witnesses have united in con-
demning the present personal property
tax In its application TO both individ
uals and corporations as unequal, un-
Just and in large part uncollectible."
IL is then stated that three substi
tutes have been suggested:
The first of these provides for an in
come tax upon every person residing
within the state for his entire income
from all sources except those located
without the state. The net income OF
corporations is 10 be determined prac-
tically as II is under the Federal in
come tax. The only exemptions will be
the salaries Of United States officials
end interest upon Federal, New York
state and municipal bonds. The ex-
emption to an individual is 81 800, TO q
husband and wife living together ST.
700, for each child 800, but with
maximum exemption of $4,000.
Would Hold Employers for Tax.
The rate for corporations shall be 2
per cent upon their net incomes. For
individuals the rate varies from one
half of | per cent to per cent, the
latter applying on all incomes of more
than $4,000. The tax on salaries paid
10 non-residents shall be withheld at
the source. and every employer shall
be held for the tax.
Arguments for the income tax are
that its rates are low, its yield is large,
1t is q good business tax, il has already
met with success in Wisconsin and
other states and II is the fairest tax
because IT taxes each according TO his
ability 10 pay.
The second substitute IL the CLASH
fed personal property tax, an extern
sion of the system of classified prop
erty tax. II is now already applied to
banks, trust companies and mortgages;
the next step is to extend il TO those
intanglbles comprised In stocks, bonds
and debentures, but not 10 moneys and
credits. The present plan contemplates
the gradual extension of the classified
property tax at some future date to all
other forms of personal property not
included by this act and not specifically
exempted.
Arguments for tho classified per
senal property tax arc that its rate Is
adjusted to the class to which it
applies, and It has been tried in six
plan only extends principle already
adopted, it has many advantages from
a legal point of view and is good
revenue producer.
Arguments Of Opponents.
Those opposed to the plan argue that
II will require listing system, that
II no allowance is made for indebted
ness, it is an unjust tax, that the
whole system of modern times does
not estimate tax paying ability in
terms of property, that the low rate
will not reach large salaries or profess
sional men, and that the low rate will
not yield the necessary income.
The third suggested substitute for
the personal property tax is the pre-
sumptive income tax, tax on the
abilities of those who profit from the
opportunities of New York State. Such
ability tax would be composed of
three parts: A habitation tax, an
occupation tax, and salaries tax
The habitation tax is to be levied
upon individuals occupying houses or
apartments for residential purposes. It
exempSs all rentals below $50 month
and above that Is sharply graduated
The occupation tax is a fat tax of
seven per cent of the annual rental of
premises occupied for business or for
securing a livelihood.
The third part of the project is the
tax on all salaries paid or received in
the state, except salaries paid by the
Federal government. The exemption
in all cases is $4,000, and above that
is graded from one 10 five per cent.
The ability tax would be exceedingly
easy TO administer and the revenue
would be very large. In the city of
New York alone, at the rates sug-
gested, the revenue would be from
twenty to twenty-five millions year.