New-York tribune., 1916-02-14

tax on a dividend capital stock basis
Is complicated and unscienuhc. IN that
~ fails 20 establish an accurate meas
urc Of the corporations ability 20 pay,
and that net earnings tax Is not only
more desirable from a taxation stand
point. hut from that of revenue pro-
ductlvity as we'll
Shows Five Ways 10 Dodge Taxes.
There arc no less than five ways un-
der tho New York tax law. the report
says. through which corporations may
escape their fair share of the tax bur
den Some of these means may be lI-
legal. 10 says. hu' the methods whereby
the larger part Of corporate person
aNty escapes its fair sh re may he
called illegal ON this subject the re-
port says:
"1hc corporation way escape part OF
its personal property taxation by tax
iuC advantage of that feature Of the
New YORK. tax law which permits cor
pCiation 20 select as its principal place
o. business any locality IN the state.
This locality may he where II transactS
at important part Of it's business. or II
may be "a little. obscure place. far re
rtSs. Owing to another peculiar feat
urc Of the New York law which makes
tho situs Of all personal property for
purposes Of taxation the principal place
o. business the corporation may limit
tho power Of taxing its personally 20
the one small locality which it selects
as the legal principal place of business.
II may have large stocks Of goods IN
the principal cities of the state and
crioy fire protection. police protccton'
etc. without contributing one cent TO
th, maintenance OF the government Of
those cities. lt.may have large amounts
o. tangible personal property located IN
cities where the cost OF government Is
very high. and by transferring its prin-
Ciral place of business 10 some little.
obscure town where the expenses OF
government are very low n may escape
with very low rate OF taxation. More
than that. IL may. and very often does.
escape without paying any personal
property tax IN any place.
In our investigation Of the assess
ment Of the personal property OF sew
eral hundred corporations, we found q
number Of cases IN which corporations
claimed particular towns rs princlpai
places of business. while the tax officers
were ignorant of the act an had never
assessed them
Increases Might Hurt Business.
One Of the most important reasons
why the general property tax cannot
be relied upon for additional revenue,
the report says, lies in the fact that
any considerable increase would
threaten 10 disturb business conditions.
"In this connection the report con
tinueS. "the real estate situation ~
New York City and other localities Is
already such as TO cause apprehension.
This statement should not be misun-
derstood Much confusion has leen IN
jected into the discussion by the eN-
aggerated claims Of the real estate
men. on the one hand, and OF group
Of radical social refOrmerS. on the
other IL should be noted that moth
inc but confusion can result from talk
ing Of real estate in the aggregate.
I'm some localities certain sections OF
the real estate field are IN a very pros
porous condition aid any reasonable
increase IN the tax rate wOu be taken
care of by the normal increase IN the
value of property. In such cases. com
prising possibly one-third OF the entire
state. il is foolish 20 speak Of the un-
Utalai4t DAl Atu o. ANN tN44N4"- i-Ni'
ertv tax This condition represents
important parts Of the City Of New
York
"On the other hand, there are large
sections of the City of New York, a,
well as parts of the state AZ large.
where an increase IN the tax rate
might constitute nothing short Of con
Gscation. Indeed. the present hlgh
rates upon real estate have already,
through the reduction Of net income,
actually destroyed capital value. In
proof Of this fact We have abundant
evidence. In a large lumber OF cases
the value OF the real estate has not
increased a. the tax rates increased.
Indeed. in many cases. while The tax
rates have increased. the actual value
Of the property has decreased. And.
moreover. this has taken place during
q period when the tax officers have
been pushing the assessed value near
or and nearer 20 the market value.
They have. in fact. actually pushed
the assessed value beyond the market
value in some cases. The cases pre-
sentcd as sworn testimony al the New
York City hearings Of the JOINT leels-
1ative committee serve to illustrate
how inequitably the present general
property rate bears upon real estate.
The committee SAYS that It's lnvest-
cation was not for the purpose OF find
ing additional revenue for the state.
but 10 produce a greater equalization.
II asks for an extension Of time fot
,,oo, - fur.her investigation bV tho