The Democrat. (Scotland Neck, Halifax Co., N.C.) 1884-1896, 1894-12-06
The income Tax.
Youths $ Companion.

Youths Companion.
The revenue Of the national govern
ment is to be increased by the proceeds
OF tax upon incomes. The new tariff
bill imposes this tax upon the incomes
that accrue during the present calendar
year, including 1899 But unless the
law is extended no tax Will be levied on
incomes received during the year 1900,
or thereafter.
The tax IS two per cent and it Is to
fall on all personal incomes exceeding
four thousand dollars That i. to say,
the man whose income is five thousand
dollars VIII pay tax OF twenty dollars
the receiver of an income of ten thou
sand dollars Will pay one hundred and
twenty dollars.
A tax of two per cent. is laid also on
the net profits of all corporations organ
lied for business or profit There is for
them no exemption of four thousand
dollars or any other sum ; but no tax
is to be paid by charitable educational
or religious corporations, building loan
associations, mutual insurance cOmpa-
nies, or saving banks which give all
their profits to depositors.
Every person having an income of at
least three thousand five hundred dol
lars is required to make a return an
nually to the collector of internal rev.
enue. Every corporation, whatever its
income, is req uired to make a return.
The collector may, even if return is
made under oath, refuse to accept it as
true.
IN that case he himself fixes the
amount of income, and adds fifty per
|
cent to the tax If he thinks the return
is wilfully and fraudulently false, he
adds one hundred per cent. The col
lector's opinion determines how much
the tax shall be, unless the person or
corporation taxed can secure a reversal
of his Judgment from the Commission
er of internal Revenue.
The provisions relating to the method
OF ascertaining net income are numer-
Gus, and we can mention but few of
them. A person may deduct from his
gross income his necessary business ex-
penses, all taxes paid, interest paid on
debts, and that part of his income which
comes from corporations that have paid
the tax. Only one sum of four thous-
and dollars may be deducted from the
incomes of all the members of family.
Corporations may make correspond
ing deductions except Of the four
thousand dollar exemption but appar-
emily they may not make from their
gross income an allowance of the sums
needed TO make even the ordinary re-
pairs of buildings and machinery.
All persons residing in the United
States, whether citizens Or not, and all
citizens residing abroad, are liable to
the tax For both individuals and cor
porations the tax is payable on the first
of July in each year if not then paid
Il penalty of five per cent is added also
interest at one per cent. a month as
long as it is unpaid.
Under this law man whose savings
say five hundred dOllare-are invest
ed in a corporation virtually pays tax,
if the corporation earns any profit,
whether it pays MIN a dividend or not
On the other hand the man whose say
ings are twenty-five thousand dollars,
which he has lent on mortgages at ten
per cent, pays no tax, unless his whole
income, including the interest received,
exceeds the sum of four thousand dol
lars.
The law was not subjected to a final
critical examination before it was
passed Consequently there are in it
many provisions that should be, and
probably will be, changed.
It May do as Much for you.