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Show NEW INCOME TAX STARTS AT $4,000 Elaborate Provision for Graduated Gradu-ated Payment System in New Tariff Bill. Washington, D. C. Included In the Democratic tariff revision bill is an Income tax section, which would require re-quire every resident of the United States who earns more than $4,000 a year to pay a tax of 1 per cent, on his earnings in excess of the exemption. exemp-tion. This would not compel the man who earns only $4,000 to pay a tax, but It would demand that one who earned $4,100, for example, pay into the government treasury an annual tax of 1 per cent, on $100, or $1. The bill also would provide higher rates of taxation for persons with larger incomes, adding a surtax of 1 per cent, additional on earnings in excess ex-cess of $20,000.; 2 per cent, additional on earnings in excess of $50,000, and 3 per cent, additional on earnings in excess ex-cess of $100,000. How Surtax Would Be Imposed. Under the surtax provisions the man who earns $20,000 would pay to the government each year at the rate of 1 per cent, on $16,000 ($4,000 exempt), or $160. If he earns $30,000 he would pay 1 per cent, on $16,000, and 2 per cent, on $10,000, making his annual tax $360. The person with a $50,000 income would pay 1 per cent, on $16,- 000 and 2 per cent, on $30,000 a total tax of $760. The man with an income of $100,000 would be required to pay 1 per cent, on $16,000, 2 per cent, on $30,000, and 3 per cent, on $50,000, which would be $1,500, bringing his total income tax to $2,260. Anyone with a net income of a million would pay this $2,260 on his first $100,000 and in addition he would pay 4 per cent, on $900,000, which would bring his total tax to $38,260. This bill also would re-enact the present corporation tax law, imposing a 1 per cent, tax on the earnings of corporations, stock companies, insurance insur-ance companies and the like, but it would exempt partnerships. This is a flat tax, there being no graduated scale as the earnings increase. The few changes from the present corporation corpo-ration tax act, concern chiefly the time of making returns and the time for collection. The bill includes under its provisions provi-sions the property and earnings in this country of persons who live abroad. May Bring In $100,000,000. It is estimated by members of the ways and means committee that approximately ap-proximately $100,000,000 In revenue may be derived from this new tax, including in-cluding the corporation tax, that amount making up for the deficit In revenues to be derived from Imports by virtue of the greatly reduced tariff and the transfer to the free list of articles that are classed as necessaries necessa-ries of living. Incomes of taxable persons shall include gains, pro.lts and income derived de-rived from salaries, wages or compensation com-pensation for personal service of whatever kind and In whatever form paid, or from professions, vocations, business, trade, commerce or sales or dealings in property, also from interest, inter-est, rent, dividends, securities, including includ-ing Income from property, income from but not the value of property acquired by bequest, devise or descent, de-scent, and also proceeds of life insurance insur-ance policies paid upon death of persons per-sons insured. Provision Made for Deductions. The bill allows as deductions in computing net Income all necessary expenses actually Incurred in carrying on any business, not including personal per-sonal living or family expenses, interest inter-est accrued and payable within the year by a taxable person on Indebtedness; Indebted-ness; 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 by insurance in-surance or otherwise; debts actually ascertained as worthless and charged off; also reasonable allowance for wear and tear on property; but no deduction de-duction will be allowed for expense of restoration or Improvements made to Increase property value. It excepts also, in computing net Income, In-come, amounts received as dividends upon the stock of any corporation, Joint stock company, association or insurance company which is taxable upon its net income under the corporation cor-poration tax provision of the bill. The bill excludes the compensation of the president the United States during his term, that of judges of the Supreme and inferior courts of the United States, and compensation of all officers and employes of a state or any political subdivision thereof. System of Collection Framed. It establishes a system of collection of the tax at its source, requiring all persons, firms, copartnerships, companies, com-panies, corporations, joint stock companies, com-panies, associations or insurance companies, com-panies, and all trustees, executors, administrators, ad-ministrators, receivers, etc., and officers offi-cers and employes of the United States havLp- the control or disposal of salaries, wages, interest and other profits and income of another person to withhold and pay to the collector of internal revenue the amount of income in-come tax due from such person. All such persons or firms are made personally per-sonally liable for such tax. Persons or corporations liable to make return on incomes who fail to do so at a specified time, are made liable to a fine not exceeding $500 and the penalty for false or fraudulent returns re-turns is fixed at $1,000 or imprisonment imprison-ment not exceeding one year, or both. "In formulating this additional impost," im-post," said Chairman Underwood in his report, "the' attempt has been made to provile not only a source of revenue, but also a means of redressing redress-ing in some measure the unequal tax burdens which result from the practice prac-tice of basing the federal income entirely en-tirely upon customs and internal revenue reve-nue duties. This is a system of taxation tax-ation which Inevitably throws the burden bur-den of supporting the government upon up-on the shoulders of the consumers. It correspondingly exempts the men of larger income, whose consumption of the ordinary necessaries of life is subject to tariff taxation in a far less aggregate degree than Is that of smaller small-er income earners, who expend the greater proportion of their resources for the ordinary necessaries of life." Underwood Defends Plan. Speaking of the principle of taxation taxa-tion laid down and the graduated system sys-tem proposed, Mr. Underwood declared: de-clared: "The progressive principle already has been sustained by the Supreme court of the United States in the inheritance in-heritance tax cases and there can be no doubt that the same principle applies ap-plies to the income tax included in this bill and will be fulLy upheld should it ever be called into question. Owing to defects in personal property taxation, the larger incomes in the United States have for many years been able to escape with less than their share of the general burden of taxation, and this Inequity will be, It is believed, in part overcome by the plan proposed." The bill provides that all taxable persons shall be notified of the amount for which they are liable under the law on or before the 1st day of June of each year and assessments must be paid on or before June 30. For delay in making payments and ten days after aft-er notice, there shall be added the sum of 5 per cent, of the amount of tax unpaid and interest at the rate of 1 per cent, a month from the time the tax fell due. The corporation tax provision, it is directed, shall be computed upon income in-come for the year ending December 31, 1913, and for each calendar year thereafter. It is provided, however, that corporations may designate the last day of any month as the day of the closing of the fiscal year and may have the tax computed on the basis of net Income ending on its designated day. All labor, agricultural, horticultural, horti-cultural, fraternal, religious and mutual mu-tual benefit societies are made exempt from the tax. Some Job. "A good wife is the safety deposit of her husband's conscience; the hook on which he hangs his mistakes and follies; the custodian of hi.s digestion; di-gestion; the living advertisement of his income; his steering gear on the straight and narrow path, and his passport into heaven, at the end," says a good-looking woman who so far has refused to be any man's "passport." |