Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1925-09-17
EASING THE BURDEN
OF STATE TAXATION
Banker Points Out Benefits OF
Community Property SyS-
tenn in Some States.

Favorable aspects of tax systems
are now among the most highly priced
assets OF our states, it is pointed out
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 half
by the community property" system.
L. H Roseberry, Vice President Sc.
curity Trust and Savings Bank. Los
Angeles, author Of the article, says
that recent amendment to the tax
law enables future residents OF the
state to take advantage Of 1t. 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 taxes
which might have been levied in 1920.
Since that time the laws have been
changed, Mr.. Roseberry declares, so
that the figures then given do not
correctly represent the present situa-
ton. He says:
Ever since it's admission Califor-
MIA has had the community property
system. Eight other state have
similar system Community proper.
ty' is property accumulated by mar.
ried persons during their marriage,
except that which is acquired by gift,
bequest or Inheritance Approximate
ly IS 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 posi-
bly, the eight other states having
similar property system) including
states Boosting of no inheritance tax
whatever The California 'communi
ty property system is recognized for
the purpose of levying Federal estate
taxes, and only one-half of 1t is now so
taxed, while in Florida the whole es
tate of a decedent is subject to the
Federal levy.
How the Law Works
CALIFORNIA; law expressly provides
that upon the death Of either husband
or wife, testate, only one-half OF their
net community property shall be
subject to Inheritance taxes The
same exemption applies upon the
death of the husband, intestate. while
the whole net community property is
totally exempt from all state inner
itance taxation upon the death of the
wife intestate. 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.
Red persons, who hereafter take up
their legal residence In the state
This puts community property in a
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 Is 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
@To illustrate. the following exam.
pie Of a man survived by wife and
two minor children is computed. the
estate consisting of community prop
a. h~v ryfH ~ hA rv{Ro ~
children. One-half 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
Q state which has no inheritance tax,
such as Florida II the comparison
were made with the states which Inn.
pose inheritance taxes but do not have
the community property system the
advantage in favor Of California would
even be more striking.
Estate Of 100000 Total rax
California .,......... ....... None
Non inheritance tax state. -. $500
Advantage in favor Of Cali
fornia ....,.-... .........~..... 500
Estate OF 100000
California ..................... SOb
No-inheritance-tax state. 5000
Advantage in favor Of Cali
''A estate Of 100000 ''O'0
California -. -. SITS
Non -Inheritance-tax state $4,000
fornia -. 1870
California ............... 24S, 1855
Non inheritance tax state 2.543. 500
Advantage In favor OF Call
toInla ............ ..,...a...... ,z94, S4F
eff the two children were adults,
the California tax would be increased
only $3.50 in each case
Another New Amendment
Another feature of the recent
amendment to the California inherit
ance tax law is a section fixing the
inheritance taxes on stock in Califor
mia corporations owned by non-resi
dents at fat sum of 2 per cent on
their actual value When considered
in conjunction with the ruling that no
inheritance taxes can be levied upon
d.,