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Show .1 I .COME TAX TO BE j MEAiNS OF REVENUE I New Measure Would Require Every Resident of the Nation Earning More Than $4,000 to T Pay a Tax of One Per Cent ML RE-ENACTS CORPORATION TAX Excludes the Compensation of the President and Judges of U. S. Courts Penalties For Failure to Make Return on Incomes in Specified Speci-fied Time Washington. April :. Included in lfl(jl lhe Democratic tariff revision bill in troduced In congress today is an in-iM in-iM come tax section which would re- quire every resident of the United 'H States who earns more than $4000 a jra -vear fo pay a tax of 1 per cent on his earnings in excess of the exemption. exemp-tion. This would not require the man vho earns only $4000 to pay a tax, ut it would demand that lhe individ-Bl individ-Bl who earned $4100, for example, uy into the government treasury an inual tax of 1 per cent on 8100, or The bill also would provide higher ates of taxation for persons with I irger incomes, adding a surtax of 1 n er cent additional on earnings in ex- ess of $20,000. 2 per cent additional IJl I a earnings In excess of $50,000. and per cent additional on earnings In tcess of $100,000. Rate of Per Cent. LI I Under the surtax provisions the ,( n who earns only $20,000 would pa the government each year at the i, "e of 1 per cent on $16,000 ($4000 l bmpti. or $16 If he earns $30,000 would pay 1 per cent on $16,000 J ill and 2 per cent on $10,000, thus aklng his annual tax $360. The person with a $50,000 income iulrl pay 1 per cent on $16,000 and per cent on $80,000, a total tax of 10 The man with an income of OO.OOo would be required lo pay 1 I ,icr cent on $16 000, 2 per cent on -no 000 and ?, per cent on $50,000 bringing his total income tax to $2260. The individual with a net income of a million would pay this j I $2260 on hi6 first $100,000. aud In ad dition he would pay 4 pr-r cent on $900,000. which would bring his total ! lax to $38,260 The bill also would re-enact the present corporation tax law Imposing a 1 per cent tax on the earnings of corporations stock companies, insur-,p insur-,p ance companies aud the like, but it would exempt partnerships This Is a ft flat tax. there bolne no graduated scale as the earnings increase The few changes from the present corporation cor-poration tax act concern chiefly the 311 ime of making returns and the time jn, for collection , Would Raise $100,000,000 Yearly, c The bill also includes tinder Its provisions the property and earnings In this country of persons who live I abroad it is estimated by members of the ways and means committee that ap- proximately $1o0. 000.000 In revenue r may be derived from this new tax, l. . nciudlng the corporation tax, thai imount making up for the deficit in r- evenues to be derived from Imports jy virtue of the greatly reduced tar-ff tar-ff rates and the transfer to the free list of articles that are classed as necessaries of living Incomes of taxable persons shall in- , :lude gains, profits and Income de lved from salaries, wages, or condensation cond-ensation for personal service of hatever kind and in whale, er form E'ald. or from professions, vocations, businesses, trade, commerce, or sales JKL )r dealings In property; also from in- WU eresl, rent, dividends, securities, in- wt .ludiug income from property incouif roin but not the value of property Icqulred by bequest, dev or decent de-cent and also proceeds of life in--urance policies paid upon death of persons Insured. Allows Reductions The bill allows as deductions in computing net income all necessary expenses actually incurred in carrying bn any bnusinesg, not including personal per-sonal llvinp or family expenses, lnter--: accrued aud payable within the year by a taxable person on Indebtedness Indebt-edness all national, state, county, school and municipal taxes, not including in-cluding local benefit taxes, losses incurred in-curred In trade or from fires, storms ( or shipwreck not compensated for by j insurance or otherwise; c!ebts actually actual-ly ascertained as worthless and charged charg-ed off; also reasonable allowance lor wear and tear on property. , but no deduction will be allowed for expense ex-pense of restoration or improvements made to increase property value It excepts also, In computing nel income amounts received as dividends divi-dends upon the stock of any corporation, corpo-ration, joint stock company, association associa-tion or insurance company which Is taxable upon its net income under the corporation tax provision of the bill Excludes Executive's Salary. The bill excludes the compensation compensa-tion of the president of the United States during his term, judges of the , supreme and Inferior courts of the I United States, and compensation of all officers and employes of a state or any political subdivision thereof. It establishes a system of collection collec-tion of the tax at its source, requiring requir-ing all persons, firms, co-partnerships, companies corporations, joint stock companies, associations or insurance companies and all trustees, execu-, execu-, tors, administrators, receivers, ect.. and officers and employes of the United Uni-ted States having the control or disposal dis-posal of salaries, wages interest and I other profits and Income of another person to withhold and pay to the collector of Internal revenue the amount of Income tax due from such person. All such persons or firms i are made personally liable for such tax. Persons or corporations liable to make returns on incomes, who fall lo I do so at a specified time, arc m tde I liable lo a fine not exceeding $500 and the penalty for false or fraudulent fraudu-lent returns Is fixed at $1000 or im- prisonment not exceeding one year, ' or both. Underwood's Statement. In formulating this addltonal impost," im-post," said chairman Underwood in his rcpon, the attempt lu been made to provide not only a source of revenue, reve-nue, but also a means of redressing in some measure the unequal tax : burdens which result from the prac-ti prac-ti e of basing lhe federal income entirely en-tirely upon customs and internal revenue rev-enue duties. This is a system of taxation tax-ation which iin.-vitabh throws thebur-J thebur-J den of supporting the government upon the shoulders of the consumers. It correspondingly exempts the men of larger income, whose consumption ' of the ordinary necessaries of life is llbject to tariff taxation In a far less i aggregate degree than Is that of the ! smaller income earners, who expend the greater proportion of their resources re-sources for the ordinary nccessnrieb of life." Notifying Taxable Persons The bill provides that all taxable 1 persons shall be notified of the ! amount for which they are liable under un-der the law on or before the first day I of June of each year and assessments be paid on or before June 3u For delay in making payment, and ten days after notice, there shall be added add-ed the sum of & per cent on the ' amount of tax unpaid and interest at i the rate of 1 per cent a month from the time the tax fell due The corporation tax provides, it Is i directed, shall be computed upon in-1 in-1 come for the year ending December 31, 1913, and for each calendar year thereafter. It Is provided, however. . that corporations may di-signac the last day of any monlb as thr day oi , the closing of the fiscal vear and may j have the lax computed on the basis I of net Income ending on Its designated designat-ed day. All labor, agricultural hor-' hor-' tlcultural. fraternal, religious and mutual mu-tual benefit societies are made exempt ex-empt from this proposed tax. , oo |