Evening star., 1934-10-11
GOTHAM WEALTHY
FLEEING TAX LAW
Properties Are Listed for
Sale and Dealers Fore
cast Hard Times.
Copyright. 1894. by the North American
Newspaper Alliance. Inc)

4
NEW YORK, October IL (N.A.NA.).
Wealthy citizens in New York City
are making plans to take up residence
elsewhere, because of the new tax laws
recently signed by Mayor La Guardia,
| according to prominent real estate
| brokers. Lawrence B. Gilman of the
real estate firm of PeaSe 81 Gilman,
Inc, said that Several people have
already asked me to put their houses
and apartments up for SALE"
| Moreover, E. W. Forest, executive
vice president of the Forty-second
Street Property Owners & Merchants
Association, predicts that If the new
income and business taxes are en-
forced, New York City will be filled
with empty stores.
IF they persist in these nuisance
taxes we will have deserted stores and
many toilet signs" Mr.. Forest said.
I'VE will have to rent these stores on
| a percentage rather than a rental basis
and accept undesirable tenants. We
are going to see an exodus of our most
reputable firms into the suburbs
Already many leading stores have
opened branches out of town and
those branches are paying a better
percentage on investment than the
main stores in New York City"
Business Groups Indignant.
Similar Indignation Is voiced by
other business associations. L. D.
Garrett, president of the National
Property Owners League. Inc, declared
that the new taxes will be trouble
some and ineffective"
The Chamber of Commerce Of the
State Of New York. at its last meet
ing, october 4, went on record as fol-
lows:
"A tax on gross receipts is generally
considered a capital levy, because in
many instances it would be paid out
of capital 1t would have the effect
of a pyramided sales tax and bring
about an advance in prices and a re-
duction in purchasing power. At the
same time it would tend to drive busi-
ness from the city; also. unemploy
ment would be increased and the tax
would thus tend to defeat its own
purpose"
1t is difficult to find a prominent
citizen in New York City who will say
good word for the new tax program
! Joseph p Day. well-known real estate
broker, who maintains an industrial
department, says the taxes will tend
to drive industries away. Richard w.
Lawrence, chairman of the Committee
on Taxation of the New York State
Chamber of Commerce, who heads
business that finances the sales Of
long list Of industries, shares this
belief.
In a recent radio address Percy H
! Johnston, president of the Chemical
Bank g. Trust Co., speaking on be-
half of the Merchants Association Of
| New York, declared the burden of
Federal, State and local taxes is
blight on our economic life. He point
ed out that the New York State budget
rose 470 per cent from 1913 to 1894.
or from s4900O,O00 to $3.50 900 900;
the State debt rose 37O per cent, or
from sos, 100000 to s5O8 900, 900. In
! the same time New York City's budget
rose 223 per cent, from 1892 ,000, 600
to $6l9000,000. and its debt 1875 per
cent, from $827,0O0, 900 to $l,s74,-
600, 900.
State and City Debts.
"The State and city debts are In
! effect a contingent underlying first
mortgage to the extent of IL per cent
on every piece of privately owned real
estate" The said.
Mr.. Johnston said the Merchants
Association ~
oulden OF city government upon rent
payers. 1t found that 81, months
rent in the year went to pay the
taxes on the property rented, and, of
course, in the last analysis, came out
OF the pocket of the tenant. Hotels.
he said, pay IA different taxes, manv
OF them whether they are making a
profit or not.
Herman Herwood, OF the firm of
Herwood & Herwood, certified public
accountants, said: There is no ques-
tlon that IN many instances this tax
Will be onerouS and burdenSome. In
the case Of merchants operating at a
loss, all payments made will neces-
Sarlly come out of capital. The appli-
cation of this tax can best be illus
trated by a hypothetical case: The
K Corporation for 1884 did a volume
of business Of $5, 10000 1t sustained
net loss of $4,000. Despite this
loss, it would be compelled to paw a
tax OF s4,985 to the City of New York.
in addition to State franchise taxes
and the Federal capital stock tax"
The New York City gross receipts
tax, effective September 90. subjects
trades, businesses, professions, ETC.. to
a tax of one-tenth of l per cent of
their gross receipts for 1894, in ex-
cess of $4,000, for the privilege of
conducting their business in New
York City. Under the city income
tax IS per cent of the income tax
due and paid to the United States
Government for the year ending De-
cember 81. 1884, must be paid to
the City of New York
Triple Income Tax.
According to good authority there
is no other city in the United States
where citizens are required to pay
Federal State and city income taxes,
and no other city has a gross busi-
ness tax. A few cities have a sales
tax.
Peter Grimm, chairman of the
H