The Monmouth inquirer., 1925-09-10
EASING THE BURDEN
OF STATE TAXATION
Banker Points out Benefits d
Community Properly Sys
tenn in Some States

Favorable aspects on t4 aynpSh
are now among the most highly priced
assets Of our states, il Is pointed ont
in the American Bankers Association
Journal in connection with an article
on how California, which has never
had a state income tax. cuts state
and Federal death taxes nearly IN hall
by the community property" system.
L. II. R~oseberry, Vice President Sc
curity Trust and Savings Bank. Los
Angeles, author OF the article, says
that a recent amendment 10 the tax
law enables future residents Of the
state to take advantage Of It Ref
erence is made to a former article by.
Assistant Secretary Of the Treasury
Dewey, voicing the need for death tax
reform and citing a hypothetical case
Involving California inheritance <
which might have been levied IN 1870.
Since that time the laws have been
changed, Mr.. Roseberry declares, %
that the figures then given do not
correctly represent the present s1ruA-
ton. He says:
ever since its admission Cahfor-
mia has had the Community property
system. Eight other states have q
similar system. Community proper.
ty' is property accumulated by mar
ried persons during their marriage,
except that which Is acquired by gi[
beouest or Inheritance. Approximate
" 65 per cent Of all property IN the
state is community property Such
property in California enjoys the most
favorable position in regard to death
taxes, both state and Federal, OF any
state in the Union excepting poSSa-
bly, the eight other states having q
similar property system) intending
states boasting Of no inheritance tax
whatever. The California 'cOmmunt-
ty property system is recognized for
the purpose of levying Federal estate
taxes. and only one-half Of It B now 80
taxed, while In Florida the whole eS-
tate of a decedent is subject to the
Federal levy.
How the Law Works
~"California's law expressly provides
that upon the death Of either husband
or wife, t~estate, only one-half OF their
net community property shall be
subject to inheritance taxes. The
same exemption applies upon the
death Of the husband, interstate, while
the whole net community property Is
totally exempt from all state inher-
itance taxation upon the death Of the
wife i~ntestate. The Federal estate
tax law now follows precisely the Cal
ifornia law in this respect.
"As the result of an amendment
made to the California inheritance
tax law by the 1925 Legislature, thiS
immunity from state inheritance
taxes likewise now extends to com
munity property Of nonresident mar
ried persons, who hereafter take up
their legal residence in the state.
This puts community property in .
more favorable position regarding
death taxes than exists in any other
state In the Union, with the possible
exception of the other community
property states. This extension Of the
exemption will add 10 per cent TO
property In the state coming under
this definition, which means that ap-
proximately 80 per cent Of all prop
erty probated in California will enjoy
the lightest death taxes In America
'sTo illustrate. the following exam
pie of a man survived by a wife and
two minor children is computed, the
estate consisting of community prop
erty' all left by win to the wife and
children. OneJhaif Of such property
would go under the law to the wife
without any death taxes, and the
other half only would be subject to
both state inheritance and Federal
estate taxes.
"As a subject OF comparison. take
a state which has no inheritance tax,
such as Florida. II the comparison
were made with the states which i'm
pose inheritance taxes but do not have
the community property system. the
advantage in favor of California would
aver be more striking.
Estate Of 100000 Total YAK
California Mons
Observation-Disclosures state...... SSos
Advantage in favor OF Cali
Estate OF $zU3suQ
No-inheritance-tax state. s...... 1890
Advantage in favor or CaHN
fornia xWS5
Estate Of 100000
CaIf1OruI& OTIS
acknowledgements stafe....... 13.00o
Advantage in favor Of Cali
lorna Estate 81 sic.oOOoco -
California 1.14S.1b0
Observation-Disclosures gtate.....s. &.b4S 500
Advantage in favor Of Cali
fornfa As6S4s14o
IF the two children were adults,
the California tax would be increased
only $3.50 in each 8
Another New Amendment
Another feature OF the recent
amendment to the California inherit
ance ak law Is a section fixing the
inheritance taxes on stock In Califor~
mia corporations owned by nOn-resi
dents at a fiat sum of 2 per cent on