The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-01-19
FAT INCOMES WILL Be TAXED,
The Internal Revenue Bill
Completed.
1t Provides for Two Per Cent Tax
on Incomes.
Individual Incomes of Less Than $4,000
Exempted-A1I Corporation Incomes
Taxable-How the Tax Is to
Be Collected.



WASHINGTON, Jan. 1S.-The full text
OF the internal revenue bill, including
the income tax, has been agreed upon
by the Democratic members OF the
ways and means committee. 1t is prob
able the measure will be submitted to
the house tomorrow. AS yet the details
OF the income tax have not been made
public. The Associated Press is able,
however, to give very complete sum-
mary OF the essential features of the
tax. as it will be submitted to the house.
The bill provides for an income tax to
60 into effect January l, 1895, and the
first collection on incomes to be made
July l, 1896. All classes OF incomes aye
included IN the measure, and the uni
form rate OF 2 per cent tax on incomes
over $4,000 is fixed, and it is made OBJ
ligatory on ell persons receiving indlvid-
ual incomes over $500 to make returns
to the local collector OF internal
revenue. These returns are gone over by
the revenue collector and the tax list
made up of those whose incomes exceed
$4,000. No tax is levied on those max
ing $500 and under $4,000, but the COM
mittee deemed it expedient to leave
margin of $500 below the exemption
point. In case person having an in
come over $4,000 fails to make q return,
1t becomes the duty OF the revenue as
SCISSOR to make inquiry as to the amount
of the persons income. II the exam
ination discloses an income above $4,000,
the income ia subject to twice the ordi-
nary tax, and the party failing to make
return is deemed guilty OF a criminal
ofense and made subject to a fine and
imprisonment.
The main purpose in framing the
above provisions have been to avoid an
inquisitorial operation of the law. The
committee believe 1t will do away with
the necessity of having assessors prying
into the private business of people, I'M
less the latter have taxable income
and Try to evade the law. 1t is esti-
mated that not more than 5000 per-
sons will be subject to this tax, 30 that
the great majority of the citizens will
not have to make returns.
Provision is also made by which no
information can be made public as to
the details of the income reported by
citizens. Any public or private per-
sons who divulge any part of the in
formation concerning incomes is made
subject to criminal prosecution, with a
heavy fine and penalty.
Particular provision is made for the
collection of income tax due on salaries,
not only of officials but on salaries of
individuals received from business firms,
corporations, etc. The individual re-
ceiying the salary does not pay the tax,
but it is made the duty of every govern
ment, state, county and municipal dis
burning officer to retain per cent OF ell
salaries over the taxable amount This
per ceiitt will be taken out OF the sal
aries in bulk at the last payment of the
salary for the year.
The tax upon corporations includes
every phase of corporate stock. This
tax is general and without the $4,000 ex-
emption allowed individual incomes !;
provided that in including the tax on
corporate stock the corporation shall
pay the tax and deduct the amount from
the dividends of the stakeholder. 1t
is made the duty OF each corporation to
take per cent of each annual corporate
income from the amount Get apart for
the stockholders, and pay the total to
the internal revenue collector in the To-
cality. Severe penalties are provided
for failure to make q proper reduction
from the dividends of stockholders, or
for failure TO make return to the rev.
enue collector.
The entire business of levying and
collecting the tax is placed in charge of
the deputy commissioner of internal
revenue. Different revenue districts are
also provided with deputy collectors
who will especially manage the collec-
ton of the income tax
The measure, as finally agreed upon,
is detailed elaboration of the plan for
an income tax proposed some months
ago by Hall of Missouri.