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Show Interest from state, municipal or government bonds. Must be Entire "Net Income." It Is a clear provision of the law, however, that tbe taxable person must make a return to tbe Interna! revenue collector for his entire "net Income," and exemptlona claimed under the law must be submitted to the federal officers offi-cers for them to determine upon their reasonableness or legality. Tbe amount of tbe Income tax, as finally agreed upon, follows: From $3,000 to 120,000, 1 per cent; from 120.000 to 150.000, 2 per cent.; from 150,000 to 170,000, I per cent.; from 175.000 to $100,000, 4 percent; $100,000 to $250,000. 6 per cent,; $250,-ooo $250,-ooo to $500,000, 6 per cent.; above $500,000, 7 per cent A single man with an Income of $25,000, for example, weuld pay 1 per cent on $17,000 and 2 per cent on $500, a total tax of $270. If married, the first tax of 1 per cent, would apply to only $16,000 of the Income. Ready to Answer Questions. Tbe treasury department is preparing prepar-ing for a flood of questions about the new income tax, realizing that this feature of the tariff bill about to become be-come law strikes more intimately at the tax paying citizen than do the Indirect taxes collected through tbe customs duties. Itepresentative Cordell Hull of Ten nessee, who drew tbe Income tax provision pro-vision of tbe tariff bill w hich will soon become law, made public a detailed explanation of the tax plan as It will touch the Individual citizen. "Tbe treaaury regulations soon to be prepared will make clear to every taxpayer the requirements of the law and Its application to income derived from tbe varloua kinds of business," Mr. Hull said. "Any person who keeps familiar with his business affairs, during dur-ing the year should have no difficulty In executing his tax return. How Tax Is Divided. "The Income tax Is divided Into tw phases, tbe 'normal' tax of one per cent, on the whole Income above $3,000, and the additional tax that begins be-gins with an extra one per cent above $20,000 and la graduated to six per cent above $500,000. Wherever the Income tax Is paid 'at tbe source' by a corporation for Ita employee or In similar simi-lar cases, only the one per cent nor-mal nor-mal tax Is so paid. "The individual has to psy any a-dltlonai a-dltlonai tax himself. The provisions of the law requiring the tax to be withheld at tbe aource does not take effect until November 1, 1913. "For the first year the citizen will make return to the local Internal revenue reve-nue collector before March 1, 1914 as to his earnings from March 1, 1913, to the end of thla year. Tbe collector will notify him June 1 how much he owes and tbe tax must be paid by June 30. After next year the tax will apply on tbe full calendar year. "If tbe Income of a person Is under $3,000, or If tbe tax upon same Is withheld for payment at the source, or If the same Is to be paid elsewhere In the United States, affidavit may b made to such fact and thereupon na return will be required. Covers Incomes of All Citizens. "The tax covers all Incomes of cltl zens of tbe Vnlted States, w betber Urine; Ur-ine; here or abroad; those of foreign ers living In tbe United States, and the net incomes from property owned or business carried on In the United States by persons living abroad. "The net Income includes all In-corns In-corns from salaries or any compensation compensa-tion for personal services; incomes from trades, professions, business, or commerce; from sales or dealings In personal property or real estate; from Interest, rent, dividends from securities; securi-ties; for all business carried on for gain. "Bequests w ill not be considered Income, In-come, nor will life Insurance paid to a beneficiary or returned to tbe Insured In-sured person aa a 'paid up' or 'surrendered 'sur-rendered policy' be taxable. Interest on such property will be Included as Income, however. "Tbe amount that may be deducted from a total Income Includes the cost of carrying on business, actual losses, depreciation allowances, and tax ex empt or tax paid money: Living expenses ex-penses cannot be deducted, nor can money spent for permanent Improvements Improve-ments to property. Forms to Be Ready Soon. "The form that la to be (tiled out by the taxpayer will be drawn up soon by tbe commissioner of Internal revenue. The taxpayer will have to give bis gross revenue and then specify speci-fy and claim the deductions to which be feels entitled. "Unless a man's Income tax Is 'paid at tbe source' be must bunt up a tax blank, fill It out. and see that It finds Its way to the proper federal official in hia district before March 1. 1914. "Firms, corporations, and tbe like having the handling of Interest, rents, salaries, or other portions of tbe income in-come of any citizen are compelled to deduct the tax for the Individual and pay It to the government Tbe Individual Indi-vidual then will receive a receipt showing be has paid his tax" MANY WILL PAY INCOME TAX Estimated That 450,000 Persons Are Affected, and That $82,298,000 Will Be Raised. INCOME TAX SCHEDULE. $3,000 to $20,000 1 per cent $20,000 to $50,000 2 per cent $50,000 to $75,000 3 per cent $75,000 to $100,000 4 per cent $100,000 to $250,000 6 per cent $250,000 to $500,000 6 per cent Mere than $500,000 7 per cent Washington. According to estimates esti-mates completed by the treasury experts, ex-perts, 425,000 American citizens must keep such accurate account of their Incomes this year that they will be able to report to tbe Income tax collector col-lector next spring exactly bow much they owe the government under the new Income tax law. So far as the taxable Amerlcaa Is concerned, the Income tax law la now practically In force against him. While the tariff law In which tbe law Is embodied em-bodied will not be signed until next week, the first returns do not have to be made to the Internal revenue collectors col-lectors before March 1, 1914. Hut when the returns are made they will cover cov-er tbe Income of citizens from March 1, 1913, to December 31, and the first payment of tax will be for money received re-ceived during thla period. Every single person (citizen or foreign for-eign resident) whose annual Income exceeds $3,000, and every married person per-son with an Income above $4,000, Is expected to report bis or her receipts re-ceipts In detail to tbe government agents March 1 of each year. To Produce $82,000,000. The estimate completed Indicates that the Income tax will produce $82,-298,000 $82,-298,000 from the 425,000 persons taxed. To thla will be added the $35,000,000 or more produced by the present corporation cor-poration tax, which la continued as part of the law. President Wilson, the federal Judges of the Supreme court now holding office of-fice and employes "of a state or any political subdivision thereof," are the only persons specifically exempted from the tax by the new law. The president and Judges now in office were made exempt to escape any questions ques-tions of the constitutionality of the i U, and their successors In office will be compelled to pay tbe tax. First Burden Is en Citizen. The general public la expected to give close study to the new law In tbe next few months, as tbe first burden bur-den of the tax payment rests with tbe Individual citizen, and bis failure to report S1s Income Is punishable by a fine. It la admitted that when first returns re-turns are made many taxable persons probably will escape payments, but with each year the government's lists of persons with taxable incomes will be made more nearly complete. Methods of Collecting Tax. Two primary methods of collecting the tax are contained In the law. One Is that the Individual return made by the citizen; the other the returns by corporations and other employers who pay their employes' taxes "at the source." Under tbe law as it will be signed by President llson next week, every large company employing labor will be compelled to report any regular regu-lar salaries It pays In excess of the $3,000 figures, and will pay the taxes for Its employes and deduct the tax from their pay envelopes. This "payment at the source" will apply to salaries, rents. Interests, royalties, roy-alties, partnership profits and aome other aources of income, and persons receiving such Incomes must be prepared pre-pared t show that tbe money has paid lta tax at Its source. In figuring np bis net Ificome for the taxpayer, tbe American business man, after deducting $1000 for himself, him-self, or $4,000, If married, will have the right to claim the following additional addi-tional exemptions: Necessary expense of carrying on business, not Including personal, living or family expenses. Interest paid out of Indebtedness. National, state, county, school or municipal taxes paid within tbe year. Trade lossea. or storm or fire losses, not covered by Insurance. Worthless debts charged off during tbe year. A reasonable allowance for the depreciation de-preciation of property. Dividends from compsnles whose Incomes In-comes have already been taxed. HOW THE NEW INCOME TAX WILL BE LEVIED AND WHAT REVENUE IT IS EXPECTED TO YIELD Incomes. Number. Totsl Ta. IJ.0OO te $5.000 128.0C0 $ 130.000 $5,000 to $10X00 171X00 5. 340X00 $10X00 te $15X00 63X00 4.24C.000 ItSXOO te $20,000 24.5C0 1.185.C03 S20.0O0tet23.COO , 10.500 2.100.C00 125X00 to S50XC0 2 LOCO 9.(60,000 $30,000 te S75.CC0 1.1 CO SJ32.C00 $75X00 to $100X00 2.400 4.774.CC0 $100. COO te $250X00 2.500 11.77S.0CO $250,000 te $50C.C00 553 MC5.5O0 $500,000 te $1,000X00 350 13.C53.COO $1X00,000 er above 100 9.301XW Total .....45X03 $32.:31.CCO |