Evening star., 1924-12-13
Overlapping Taxes Threaten
Estates, Roger Bnbson Says
Financier Points to Inconsistencies and
Dangers of Inheritance Ta1 System
as 1t NO,v Stands.

securities are taxed upon different
schedules. The location of the prop
erty in either case has much to do
with the tax that must be paid.
Next, the inheritance taxes OF other
Stats may become due and payable.
Certain States. for instance. levy a
tax on the inheritance Of the securi-
ties OF all corporations formed within
that State. An Ohio corporation, for
instance, may be represented in the
securities making up part OF the
estate OF q citizen OF New York Cn.
der these circumstances, Ohio collects
q tax from ths heir who receives
those particular securities. II a cor
poration IL organized under charters
in three or four different states, as
In the case Of some OF our railroads.
1t is possible that the same securities
might be subject to three or four
State inheritance taxes.
Laws In Other States.
Some States even tax the securities
Of foreign corporation willed TO q
foreign heir IL the transfer ofilce OF
the corporation Is within the state.
Others levy taxes on te transfer OF
securities Of any corporation doing
business within the States. no matter
where 1t Is organised, where the
securities are held or where the heir
resides. Securities held In a safety
deposit vault in certain States are
subject to taxes by the State for that
reason alone.
To illustrate the difficulty arising
from this overlapping OF taxes we
might take a block OF railroad stock
on which the Federal estate tax
must be paid because Ii is a part or
the original estate. This stock in be-
ing transferred to an heir might De
subject to a tax in the State or res
idence. to a tax in the several states
in which the railroad waS incorpor-
ated. to a tax In the State where legal
transfer offlce Of the corporation was
located, to the State in which q SAFE
ty deposit vault holding the security
was located and to possible taxes by
other States in which the railroad
might do business.
System Obviously Unfair.
The unfairness of this system is OBJ
vious. One security may bear one or
two taxes another may be subject to
six or more individual levies One
heirs share may be taxed lightly
another's, due to the form in which
the property exists. may suffer heav-
lily.
A Massachusetts estate Of approx
tax Of $691,000. OF 23 per cent Of the
entire estate. These taxes were paid
to the Federal Government and eight
cen different States. A large Illinois
estate. amounting to approximately
23,0o0.000, was left to a daughter and
two sons, but the will provided spe-
ciically that the two sons should pay
all taxes. Their shares In the estate
amounted to s1,S00,000 and $4,000, 600
respectively, the residue Of the estate
going to the daughter. but the taxes
on the estate came to S6,400.0o9. This
left the two sons about $4,000, 900 In
debt. Certainly If the deceased had
known what his taxes were he would
not have included this provision in
his will, as he did not intend to ham
dicap> his boys with such a tremen-
dous debt.
Incomes Greatly Hampered.
Nor is the small estate entirely free
from these dangers. Federal tax ap-
plies to estates of only $4,000 or
more. but the individual State taxes
may apply to very small Inheritance.
Not only do these collective taxes
often represents an exorbitant burden
on the estate itself. but In the ma
jority of cases they also tend to cut
down certain shares more than others,
an entirely different proportion than
that intended by the deceased. Be
cause We never personally pay our
own inheritance taxes many men be-
lieve that they have provided ade-
quately for their families, and as a
matter of fact this complicated sys-
TEN and the overlapping of several
individual taxes may cut the portion
received by heirs SO that the inheri-
tance no longer represents the COM
petence intended.
Urges Fairer TaxRtion.
While we are r., sing taxes this
situation shoulG oe gone into, and II
the American Bankers Association,
the Investment Bankers or some
other public-spirited group of busi-
ness men would codify uniform and
fair system of Inheritance taxation,
1t Is probable that the individual State
could be brought to adopt 1t and the
widows, orphans and dependent heirs
would be greatly benefited.
In the meantime II is every mans
duty to his family to check his own
estate periodically to know what his
tax will be and to make such changes
in his property as may be necessary
to eliminate unreasonable and un-
necessary overlapping of Inheritance
taxes.