The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1932-01-14

responsible for the huge inroads
now being made by the treasury in
1928, 1929 or 1880.
The following example shows
how this works out:
In 1929, A died, leaving $4,000
shares Of National City bank stock
valued at $500 share, total Of
$15,0O0,000. The federal tax fixed
when the return was fled, accord
ing to law, one year later, was
based on the stocks 1929 value.
The tax fixed was slightly above
s2,O00,OOO. When the stock dropped
to below $40 a share the estate
value crumbled to around $1,000, 900.
The government tax amounted to
100 per cent of the residue, al
though it represented but 20 per
cent of the value at the time Of AS
death.
The government tax is graduated
from 1 per cent on incomes OF
$4,000 above the exemption to y
per cent on incomes of $4,000, 900
or over. Of the sums collected un-
der federal law about 80 per cent
is credited to those states having in
heritance taxes, thus avoiding dou-
BILE taxation to that extent.
In making its payment to the gov
eminent the estate is permitted to
deduct the tax paid the state in
event this sum does not exceed gu
per cent of the total levied by the
government. Thus while Uncle Sam
becomes the chief beneficiary OF
MANY estates, due to drops in value
of security assets, much OF his col
lections actually accrue to the
states.
Newspaper files in recent months
carry many instances illustrating
how the value of estates has
dropped since the federal estate tax
was slapped on them in 1929. "A
recent checkup of the estate OF
Percy r. Pyne, financier and phil
anthropist, of Bernardsville, N. u
disclosed that seven of the common
stocks among the assets had
dropped from $S,S86,157 on August
% 1929, to $2,767, 900 in December
last wear. A report on score OF
stocks carried in the estate OF
Thomas Fortune Ryan showed
shrinkage of $4,000, 900. In another
instance, name not given, an estate
valued at 100000 in 1929, carried
ali its assets in the common STOCK
of a CORPORATION selling at around
SGT. On the date when the tax was
demanded the estate had slumped
in value to 100000. AS the govern
ment tax, levied in 1929, was $780,
90 but 100000 was left for the heirs
Another estate where the attor-
news asked the treasury for relief,
started out with $30,000,000 in 1929
Today the estate is worth $12 ,oO0,-
600. The federal tax, based on 1923
value, is around 100000. Attor-
orneys for the estate are seeking
modification of the tax on the
ground it calls for far more money
than was the intent of congress
when the law was passed. If this
tax is paid the executor instead of
paying 20 per cent of the residue
of the estate, actually would pay
so per cent.
Just how many heirs of estates
have been driven into bankruptcy
by the drop in security prices and
the governments demand for taxes
based on pre-cash security prices,
has not been divulged by the trea-
sury department. 1t is admitted,
however, that in one case an estate
has been unable to pay its tax and
that in many others time extensions
have been given to aid executors.
At least so estates, some running
into many millions have been so
depleted by falling security values
that collection of the government
tax now would put them on the
verge of bankruptcy. In many cases
extensions have been granted.