Good-by to California

On Jan. 1 Californians will owe their State the first tax bills under their new income tax law passed last June. As passed its schedule ranged from 1% to 15% which meant that any citizen with an income of $1,000,000 a year would have to pay the State $140,575. The law also presumed that six months residence within the State was tantamount to citizenship. By last week it was time for anyone who contemplated howling about this levy to get it off his chest. One who did so was Publisher William Randolph Hearst, whose California properties include a 50,000-acre estate at Wyntoon, a 270,000-acre estate at San Simeon. According to FORTUNE, Mr. Hearst's income is not $1,000,000 but around $4,000,000, and the idea of passing over a $580,000 income tax check to California was extremely repugnant to the master of $220,000,000 worth of newspapers, magazines, radio stations, cinema companies, real estate, gold mines, silver mines, cattle, chicle and forest.

"Heaven knows I do not want to leave California," wrote Publisher Hearst to Daily Variety of Hollywood, which had predicted his permanent departure from the State a month ago. "No one does, least of all a native son whose father was a pioneer; but it is utterly impossible for me to remain here and occupy a place like San Simeon on account of the Federal and State tax laws. . . .

"I find that over 80% of my income will go in taxes--in fact, it may be nearer 90%. . . ."

No rich man in the U. S. is better equipped to bark up the tax tree than Publisher Hearst. Within 24 hours he had released a statement amplifying his tax grievances to the Associated Press, in which Mr. Hearst owns 19 memberships. "New York," he explained, "is my legal and voting residence, and has been for over 36 years. I simply cannot afford to be a resident of California as well as New York. . . . Perhaps I am honored by special attention in the taxation program of the Federal Government on account of my political attitude, but I do not think so. I believe the Government should be given due credit for robbing everybody with the utmost impartiality. . . . The methods of the tax collector are largely those of the gangster and gunman. You cannot argue with the tax collector any more than with any other racketeer. The Treasury Department holds a gun to your head and you either come across or get taken for a ride. . . ."

First result of Mr. Hearst's tax blast were cordial invitations from Mayor Charles D. White of Atlantic City, President William A. Eastman of the Seattle Real Estate Board, Governor Dave Sholtz of Florida,* to come and live in their in-come-tax-free communities. Second result was an indignant clamor from Californians of high & low degree against Mr. Hearst s publicizing their income tax. State Assemblyman Ford A. Chatters, author of the new law, claimed that the State's Community Property Law would enable a man to split his taxable income with his wife and thus avoid high brackets, so that a income of $200,000 in California would actually pay $10,000 less State and Federal taxes than it would in Florida in Federal taxes alone. This possibility, however would be of no help to Mr. Hearst because Mrs. Hearst does not make even a pretense of living in California.

With two floors of his Ritz Towers in Manhattan made ready to receive Mr. Hearst this week, some observers suspected that the real reason he was leaving California was that his mansions and estates there were proving too great a drain on his pocketbook.

*WPAdministrator Harry Hopkins, asked last week about Florida's demand for Federal funds to relieve destitute transients, cracked back: "If Governor Sholtz didn't boost the climate so much, he wouldn't have a transient problem."

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