The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-08-20
THE INCOME TAX.
Synopsis of Provisions of the New
Democratic Measure.


The income tax provision in the tariff
bin begins to operate on Jan. 1, 1895. and
continues until Jan. l, 1900. The tax q per
cent? is to be levied on all incomes above
$1,000. 1t is TO be paid not only by all who
reside within the country, on income de.
rived from any source, but by citizens OF
the United States residing abroad. and by
all residents of foreign countries on in
comes derived from property situated In
the United States or from business car
RED on here the tax IS on sne nc6m Re G s
levied. Therefore the first tax Will be
levied on incomes received in 1894
There are two classes OF incomes recog-
niZed by the bill-the incomes of individ-
uals and the incomes of corporations. The
taxable income OF a corporation IS all It's
income above its operating expenses, in
Guiding the sum paid 70 shareholders. The
tax of per cent is paid by the corpora
tion Therefore that part of an individuals
income which is derived from dividens on
the shares of corporation that has paid
the tax is deducted, on its return, from
his own taxable income.
There are exemptions allowed by the bill
in computing an individuals income besides
the $1,000. They are as followS: The nee
essary expenses of conducting a business,
local taxes, losses in trade or from fires,
storms or shipwreck. not compensated for
by insurance or otherwise; worthless debts;
and income on which the tax has been paid
by corporations.
AS to corporations, charitable, religious
and educational corporations are exempted,
as are States, counties and municipalities,
building and loan associations, savings
banks having no stockholders, receiving
no more than 900 a year from any one
depositor, and dividing all the yearly prof
it's among the depositors except con-
tribution to a 10 per cent. surplus Mutual
companies, including insurance companies,
are all exempted.
Every person having an income of $500
must report it to the collector of internal
revenue for his district, or his deputy
Salaries received from corporations are re-
ported by the corporations to the collector
of the recipients district. The tax on the
salaries of officials of the United States is
to be deducted by the paymaster.
The collector may require a return to be
verified by an oath. The collector or his
deputy may increase the amount of income
reported If she has reason TO believe that
the same is underestimate" If there is
neglect or refusal to make a return, OF
If a return is fraudulent, the collector OF
his deputy shall himself make list by
examination of the person taxed, or other
evidence. A so per cent. penalty is TO be
charged for neglect or refusal and 100 pei
cent. penalty for fraud.
person may declare that he has not
$4,000 of income liable to be assessed OF
that he has paid his income tax elsewhere
If the collector or deputy is convinced that
the declaration is true he may grant ar
exemption. If a return is increased by the
collector or deputy the person taxed may
offer proof that the increase is unjust, but
the officer will not be obliged to take the
facts shown as conclusive and 1T is within
| his discretion to refuse relief. An appea
from his decision may be taken to the
Commissioner of Internal Revenue.
If corporation does not file its state
| ment fine of $1,000 is to be levied on il
o on the pe account Of income tax due until
| is paid
| The tax is payable on July 1 in eaci
| year. If it is not paid within ten days af
| charged together with interest at th
| rate of L per cent per month.