Washington telegraph., 1925-09-04
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 prlzed
assets CT our states, il 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 nan
by the community property system
I, IT, Roscberry, Vice President Sc
curity Trust and Savings Bank, Los
Angeles. author of the article, says
that a recent amendment to the tax
law enables future residents OF the
state to take advantage OF 1t. Ret
erepce is made 10 former article oy
Assistant Secretary Of the Treasury
Dewey. yoicing the need for death tax
reform and citing hypothetical case
invoicing California inheritance taxes
which might have been levied in 1920
Since that time the laws have been
changed. Mr.. Rose berry declares, so
that the figures then given do not
correctly represent the present situa-
ton He says:
Ever since its admission Califor'
mia has had the community property
system Eight other states have 4
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 65 per cent OF all property in the
state is community property Such
property in California enjoys the mos:
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 q
similar property system) Including
states boasting 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's law expressly provides
that upon the death of either 80, oand
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. thi1
immunity from state inheritance
taxes likewise now extends to com
munity property of nonresident mar
ried persons. who hereafter take W
their legal residence in the state
This puts community property in a
more favorable position regarding
death taxes than exists in any othe.
state In the Union. with the possible
exception OF the other community
property states. This extension OF the
property in the state coming under
this definition. which means that ap
proxima.ely so per cent Of all prop
erty probated In California will enjoy
the lightest death taxes in America
"To illustrate, the following exam
pie of man survived by a wife and
two minor children is computed. the
estate consisting OF community prop
erty' all left by will to the wife and
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
state which has no inheritance tax.
such az 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 or California would
even be more striking.
Estate OF 100000 Total Tax
California ...................... None
Non Inheritance tax state. $500
Advantage in favor Of Call
''' ~ Estate of $500 900
CALIFORNIA yOa
Eo-tnheritance-tax state ...... 5000
Advantage in favor OF Cali
fofntA Observation-Disclosures. z.OS5
Estate OF 900 900
California ................. b,T7y
Non In herita nce-t tax state. 5000
Advantage In favor OF Cali
Estate OF $4,000. 900
California .....,............... 1.249,155
Eon-inheritance-ta state....... e.J43. 500
Advantage In favor OF Call
fornia ..................... 1894, ,345
"If the two children were adults,
the California tax would be increased