Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-10-03

know much II anything about the tax
regulations of their own State as regards
securities, and nothing whatever about
those Of other States. People seldom
make inquiries when they purchase bonds,
only to be penalized after the assessor has
found out about their investment. So it
may be stated as an absolute essential of
sound investment: don't put yourself in
position where your income will be taken
away from you. Find out beforehand
what the laws are and the practice is.
Of course every good citizen wants to
pay reasonable sum to support the gov
eminent, but the trouble is that taxation
as whole in this country has become
confused tumble of inequalities. exemp-
tons, evasions, and conflicts. There is
no fairness or equality about it. Thou
sands of persons who ought to pay large
taxes pay none at all, and the poor widow
with a tiny cottage or single bond pays
exorbitantly. What is known as the gen.
eral property tax, upon which the whole
structure of taxation rests, has practically
broken down under pressure of modern
conditions. The new Federal Income
Act with all it's faults, points the way to
fairness and simplicity, and SO great an
authority as Professor E. r. A: Seligman
of Columbia University urges that the in
come tax be introduced for State and local
purposes as well, abolshing, of course, the
old general property tax.
Tax Laws, Vary in Different States
cages in the hands of the investor is
perhaps the most complicated and uneven
branch of the whole subject of taxation
Here are a few general facts taken from
a perfect vast wilderness on the subject,
facts of tangible assistance, trust, to
the individual investor. Savings bank
deposits and insurance policies are under
pretty nearly all circumstances free from
taxation in the hands of the holder. This
fact renders these apparently low interest
yielding investments much more desirable
in comparison with bonds and mortgages,
and stocks in many cases, than they APP
pear to be on the surface or are generally
given credit for.
In several States, notably New York
and New Jersey, nearly all stocks are free
from State and local taxation. Stocks
also are not taxed under the Federal In
come Act, unless the income is very large
one. In other States, notably Massachu-
sets, only stocks of domestic corporations
are exempt.
Under the Federal Income Law, all
State and municipal bonds are exempt; in
many States the bonds of the State itself
and of its municipalities are free from tax.
while the bonds of other States and out
side cities and towns are heavily taxed.
In still other States, even the obligations
of the State itself are levied upon.
But in general a State is inclined to ex-
empt not only its own obligations, but
bonds and stocks of number of its do
nestle corporations. Law and practice
in this respect differ tremendously, but
usually an investor can obtain tax-exempt
securities by applying to dealer in his
State. In still other jurisdictions there
are laws that exempt bonds from all taxa
ton, either permanently or for period of
years, by paying small recording fee. In
New York, for example, by paying "a of
per cent. on certain classes of bonds, the i.
owner does not have to pay anything
more for five years.
Then, there are States that do not tax