Evening star., 1924-12-30
NEW Gift TAX LAW
TOPENAL|zE RITTER
Manufacturer Must Pay
Heavily for Giving Away
Stock to Employees.
BY ROBERT It. SMALL.

The Internal Revenue Bureau OF
the Treasury Department is about to
have it's first real experience with
the new gift tax law passed by the last
Congress as a sort of twin brother
TO the inheritance tax.
The burden of paying on what you
give away is about TO fail upon
William Mclean Ritter OF this city.
who has determined 10 p2ss a'oag
TO several score Of his associates,
relatives and employees Il block OF
stock in the lumber company said
10 be worth In the neighborhood of
$4,000, 900.
IF Mr.. Ritter had to pay the Gov
ernment rate on a straight gift Of
that amount the tax would be
S6S0,00o. But, fortunately for the
generous manufacturer. his gift Is
divided into something like 125 parts
and no tax at all need be paid on
gift of $500 to any one person.
This exemption. however, applied
20 I25 persons would coEer only sG2,-
500 of the total of $4,000 The
law also eNempts the donor from
taxes on gifts tot2Iing So. .6oe. After
that sum. though, the tax rates be-
gin to mount rspidi-. tar scale be
Ing the same as that provided In the
Inheritance tax law. Presumably the
gift tax was passed 10 avoid the
possibility Of rich man giving away
all his worldly goods before he dies,
thus permitting hts heirs TO escape
the Inheritance levy. But whereas
the heirs would have to pay under
the inheritance tax, the donor has to
pay under the gift law.
Total Tax Doubtful.
Government experts said today
% y1-o. - .ef1 S,,es
what the tax against Mr.. Ritter will
be. The terms and conditions OF his
gift, as we'll as the exact value OF
the securities will all have to be
thoroughly studied before a decision
is reached. For instance. the par
value OF the shares to be distributed
Is said to be $3.50, 900, but Columbus
bankers have estimated the real value
as nearer $4,000 900, although, the
stock is not on the market and there
Is no actual means of figuring the
precise worth
The placing OF the shares in the
hands of trustees TO be named by the
benehciaries Of the gift ia another
ct-"vmstance which must DE consid-
efeh in reaching an equitable and
jLst Government tax on the Ritter
gIfe Mr.. Ritter says that tnasnluch
as ce entire transaction has been
hanoled by his Columbus, Ohio. law
yers, he is unable himself to give the
details other than to say he has
wanted tho gift to go 10 his employees
in the most direct possible manner
consistent with the greatest good.
The Ritter gift to his employees Is
one OF the largest of that character
on record and. as stated, is the first
to come within the purview Of the
new statute. The Government gift
tax is rather a heavy one and its ef-
feet upon benefactions to private in
divfduals will be studied with a great
deal of interest.
Beginning at l per cent. the tax
rises rapidly until at $1,000 600 It
amounts to IL per cent. At $500, 900
1T has reached Is per cent. and for
gifts between $4,000, 900 and 1000, 900
1t is fixed at 81 per cent Between
S3.o0o.000 and $4,000, 900 the percent
age of the levy is "a
The law specifically taxes all prop
erty transferred by gift whether
directly or indirectly, but II exempts
all gifts to the United States, TO any
State or Territory, or for charitable.
fraternal or educational purposes
The phraseology of the law actually
IS for Exclusively public purposes"
Therefore, the great recent gifts of
millions by George Eastman of Ro-
chester, and James B. Duke of North
Carolina do not come within the
scope of the gift law. both being Of
an educational and public character.
In an endeavor directly to play
benefactor to the man who helped him
build his enterprise. Mr.. Ritter has
placed himself in the tolls of the
federal toll collector. And nobody as
yet knows what the exact cost will
be.
Copyright, 1924