New-York tribune., 1922-01-17
100 Million
Taxes Seen in
Davenport Bill
Measure Offered at ALBANY
Said TO Propose Addition
al Burden on Capital 70
Be Paid State by May |
Meet Richmond Decision
SAKE Asserts Legislation Is
Effort 10 Validate Bark
Stock Levies for 192O.'2l

State Senator Frederick NJ. Daven-
port Aas introduced bill in the Leg
islaturc which, in tho Judgment of local
fnanclers, will collect. if it becomes a
law, $100.0o0,o00 before May /. 1929, in
addition 20 the existing state income
tax. The prox<;cd new law appears to
be aimed az the individual aud the pri-
vatc banker, doubtless on ethe theory
that such have escaped heretofore.
When printed copies of the bill were
read in the financial district yesterday
there was widespread astonishment
| that such 81 bill was sponsored by the
chairman OF the Senate Committee on
Taxation and Retrenchmcnt
In practical operation, if taxpayer
owns 100000 Of per cent bonds, he
pays state income tax Of about $50 u
year. Under the proposed Davenport
b,ll the same taxpayer would pay
$1,000 Tor each Of The years 1920 and
1921, all before The 1st day Of May
this year.
Additional Tax on Capital
Martin Sake, former president OF the
State Tan Board, said yesterday that
the proposed law would tax capital at
the rate of l per cent, wherever found.
III addition to present taxes.
There is an additional tax to that
imposed by the state upon Che income
OF such moneyed capital" said former
Senator SAKE. THE cause OF this dras-
Tic attempt TO single out moneyed capt.
tai and subject it TO double taxation is
the so-called City of Richmond deci-
sion in the Federal court, which de
clared taxes in the City of Richmond
bank TO be illegal because the same
We're at greater rate than that city
had levied upon other capital, which is
forbidden by the Federal law.
ITO overcome the effect of this de-
cision Senator Davenport is seek ne to
impose the | per cent state tax upon
moneyed capital, which is the rate the
tax law fixes upon state and national
bank shares. Senator Davenport's
amendments are designed to be cura-
tive statutes to square the New York
yaN law TO the Richmond decision.
However, they are contrary to the
policy OF the state adopted as part
Of the income tan law, whereby in
consideration Of the new system Of
taxing incomes the moneycd capital
from which incomes are derived are OK
cmpted.
Bank Stock Levy Suit Pending
"lhereforc the amendments wholly
subordinate the rights of the indiv;d-
ual citizen and private banker to the
frantic attempt to overcome the effect
OF the Richmond decision upon the as.
sessnent OF bank shares throuyhout
the state made for the years 1920 and
WI and desired to be made in the
future. 4 test case as to the legality
OF the 1921 bank share assessments in
Ncw w. York ~ is now pending
ne bank stock taxes for the wears
1920 and 1921 throughout the state
winch are attempted to be validated
ny the Davenport bill do not exceed for
both years S14,OU0o00. These are en-
t'rely local taxes, payable to the cities. /
towns and village about two-thirds /
Of which goes to the City of New York. /
Inc state VIII not be affected or lose |
dollar IN taxes If the bank stock
taxes for 1920 and 1921 are held 10 |
De illegal. 1his ATTEMPT to offset u
possible loss of $4,000, 900 of local |
.a%es, assuming that The moncyed cap
t,al aaa nn inc state amounts to $1,000 ,
ooo goo, which is a conservative cstj.
mate would result in the state recciv. !
ldS III Nhese two years alone Sl00 OOO..
oVo of additional taxes. Such a vast /
amount coming into the state treasury I
would only tend TO extravaganza and |
useless expenditure, which Governor
Miller Is seeking to curtail in his pol
cy OF economy and retrenchmcnt''