RREAL
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REAL    ESTATE

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B UILDERS













P) AND







Vol. CII.





NEW YORK, DECEMBER 21, 1918





No. 25





United Action Demanded at Tax Conference

Real Estate Organizations Asked to Back Up City Administration
In Effort to Secure Relief from Leífislature





SEVERAL proposals for the relief of real estate
were made at the public hearing of the Mayor's
» Committee on Taxation at the City Hall on Wed-
nesday and Thursday. The meeting was called by Na-
than Hirsch, chairman of the Mayor's Committee for the
purpose of bringing together all the different factions
of those interested in real estate in the attempt to se-
cure coordination of eft'ort before the legislature this
winter.

No action was taken as a result of the two days of
speech making but it was stated that Chairman Hirsch
will now appoint a committee representing all of the
real estate organizations to act with the city adminis-
tration in framing a bill for presentation to the legisla-
ture and in pushing it to a vote.

The most promising feature of the hearing was the
suggestion of Laurence McGuire, President of the U.
S. Realty and Investment Company and for four years
President of the Real Estate Board, that all realty in-
terests should get together back of any measure pro-
posed by the city administration, a proposal that re-
ceived hearty support by a large number of those in at-
tendance at the hearing. This suggestion followed the
statement by Comptroller Craig as to the attitude of
the administration, which coincides in many particulars
with that adopted by the Real Estate Board.

The Comptroller favors a personal property tax of
three-quarters of one per cent., with a listing systern.
for personal property and strong penalties for evasion
of the law. This tax is to be collected before the tax
rate on real estate is fixed, by which arrangement the
city would be assured of the funds necessary to meet
its obligations. The Real Estate Board has not taken
any definite action on the plan for the compulsory list-
ing of personal property other than that such listing
would follow as a matter of course the passing by the
legislature of the bill for the limitation of the tax on
realty and the fixing of a personal property tax of one
quarter of one per cent. that was the program of the
Board last year. It is reasonable to suppose as the
differences between the Comptroller's plan and the pro-
gram of the Real Estate Board are so slight that it
wiU not be an insurmountable difficulty for them to
unite on a bill that will bring about the desired result
if the legislature passes it.

The advocates of a state income tax instead of a
personal property tax have not as yet expressed them-
selves on the question of united action that involves giv-
ing up their belief that a personal property tax is un-
workable and that the only sure method of reducing the
burden of real estate is by providing for a state income
tax similar to the provisions of the Federal Income Tax
law.

Mayor Hylan presided at the hearing.

The ComptroUer said:

"Real estate interests  must take  this  situation as





you find it and provide enough money for the mandatory
requirements of the City Government plus interest and
amortization and redemption requirements. I say to
you that when you go to the legislature in an en-
deavor to limit your tax rate on real estate to 2 per
cent. or l^ per cent. or ^ of one per cent. you must
decide on one of two things: limitation of the City's
debt or abolishment of its necessary work. As a mat-
ter of fact, I do not believe there is any man in this
room or in the City of New York, for that matter, who
believes in doing that sort of thing. But that will be
the consequence of such an attempt, if successful.

"The objections to imposing an income tax are insur-
mountable, in my judgment. In the first place, the Fed-
eral impositĩon of income tax burden for war purposes
and for redemption purposes for bonds now outstanding
is using the income tax to the very limit; in other words,
it is now imposed to the limit of endurance and it is
the last tax that Congress is ever going to let up on.
In my judgment, all taxes, all imposts levied by Con-
gress by reason of the war and by reason of the ne-
cessities of the National Government will go before the
income tax. I do not believe you would have any chance
before the legislature in 1919 in any attempt to pass a
State or City Income Tax Law or any other Income
Tax Law that conflicts in the sHghtest degree with the
operation of the Federal Government's Income Tax
Law. It is a well understood principle of taxation,
wherever you have a Federal form of government, that
the wider fields of taxation are resorted to by wisely
framed Federal taxation methods. They are for the de-
fense of the realm."

The Comptroller called attention to the finding of the
MiIIs Committee, which proposed a State Income Tax,
and added:

"If you observe the provisions of that bill you will find
that it does not include a tax upon incomes of residents
of New York. The reason for the omission of this
provision was due to serious difficulties in enforcing a
tax on incomes in the State of New York derived from
sources outside of the State. It is claimed that there
is a Constitutional question involved. I have not ex-
amîned that Constitutional question and I express no
opinion regarding it. But the practical operation of
such a measure would be this. If a man, a bona fide
resident of the City of New York, had an income of
$10,000 a year $9,000 of which he derived from mines
in Utah or Arizona and $500 of which he derived from
a factory in New Jersey, you could collect a tax on his in-
come only on the basis of $500 a year; but a real estate
man who had a $10,000 a year income derived from real
estate in the City of New York would get it both ways
—he would pay a tax on his real estate and pay a tax
on his income as well. Therefore I think it is just as
well to look this gift horse in the face from the real
(Continued on page 712)