Show Huge Reductions on Incomes In Excess of Ten Thousand Table Given For Big Amounts Cut on Million Would Woula l Be 6 This is the second of a series by George Britt Washington correspondent correspondent corre corre- for fop The Telegram and N JEA NEA Service explaining the provisions provisions provisions pro pro- I visions of the time new law Clip and I save for reference in in making up your tax report The first article dealing deiling with small incomes ap appe appeared ap- ap pe red Sunday Editor By GEORGE BRITT W WASHINGTON March 8 Toe ine Average citizen is In a purely theoretical theoretical theo theo- field when he gets to discussing discussing discussing dis dis- dis- dis cussing the the surtax features of the new income tax law law- The surtax applies only to net incomes of more than It puts the pa payer er into a moneyed aris- aris The man who pays I it in inmany inmany many cases employs a lawyer or other professional specialist to figure figure fig fib ure out the amount for him But Buthe the he magnetic effect of money upon human luman attention and the fervid dc- dc bate ate upon the subject in both house and senate make the surtax a mater matter matter mat mat- ter er of pertinent general interest Working out the surtax for a given income is rather a complicated complicated complicated process s. s It is far more comprehensible corn com to glance at a table presented herewith which Indicates Indi ca cates caes es the varying amounts of or PaYment payment payment pay pay- ment corresponding to representative tive incomes income MAXIMUM RATE CUT CUT The old law lawS with its maximum rate of 40 40 per cent for Incomes more than was cut to a maximum of 20 per cent surtax on all incomes more than Only persons in the United States paid last year at the maximum maximum maximum maxi maxi- mum rate While the new law cuts the tax of the married man with Income in inCome income In- In come from 2250 to it likewIse likewise like like- wise cuts the tax on from to The little littleman littleman littleman man saves 1687 the big man On the other hand the small taxpayer taxpayer taxpayer tax tax- payer receives a cut to abour about one- one fourth of his Ills former tax the big taxpayer finds his reduction less than one Under the wartime tax ax law the tb dollar million income had to pay The surtax is imposed in addition addition addition addi addi- tion to the normal tax which the citizen en must pay in common with his lis less prosperous neighbor For lor incomes from to the the- surtax is 1 per cent for all an abo above e For net incomes of ex- ex the surtax payment Is Upon incomes from flom 14 f- f the rate is an additional 2 per cent on that above And I so it up to the maximum of Df surtax for net incomes of with 20 per cent ad additional ad- ad for all above that amount The senate materially reduced the he figuers as passed by the house for or incomes income between and The house bill made no reduction In surtax whatever for Cor Incomes up to o This feature feature- was denoun denounced ed vigorously ly by Representative Rep nep- Henry T. T Rainey and the he senate changes meet some of the objections TAX EXEMPT SECURITIES Opponents of the bill were particularly particularly par par- critical of the reduction of the surtax maximum to 20 per percent percent percent cent and its Us to all In Incomes incomes In- In comes above The answering answering answering answer answer- ing argument Is that the present figure will produce revenue than would a larger rate This argument Is based upon the present tendency of capital to In Invest Invest Invest In- In vest in tax exempt securities When the total normal tax and surtax is less than 25 per cent as asunder asunder asunder under the new new law it Is more profitable profitable prof pro to invest in Industrial se- se curi curl at 6 per cent than in tax exempt exempt ex ex- empt municipal bonds bond at 4 41 2 2 1 per pel cent It Is accordingly that mone money will wilt be coaxed again Within reach of taxation and in industry industry in- in will be benefited by n ne no investments Torno Tomorrow Tomorrow Co Corporations |