Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1913-09-26
The NeW Federal Income Tax

Inc new FEDERAL income tax, comprising section 2
OF the tariff bill, which has passed both branches OF
congress, and is now in the hands of the conferee
committee, is but little understood by the people
generally. A federal income tax is not a new thing
In the United States, as such a law was in force
during the Civil war, on incomes Of every description.
1t was repealed, together with other war revenue
measures. In the early n.neties the Wilson-Gornan
tariff measure carried with it an income tax, but it
vas declared unconstitutional BY the United States
supreme court. At the time the Payne.Aldrich tariff
bill was pending, as a result of a compromise be-
tween the factions of the republican party, the ques-
ton OF an income tax amendment to the constitution
or the United States was submitted to the various
states OF the Union. A few months since, the requi-
site number of states had ratified the new amendment
and 1t became the organic law Of the land. TO pro-
vide for a deficiency in revenue, which will undoubt-
eddy result from a 20 per cent cut in the tariff, the
democrat majority in congress has enacted the, third
federal income tax. -asa S t-4
This measure, which has been agreed upon in its
various provisions by the committee Of conferees
provides that al incomes exceeding $1,000 will be
taxed l per cent. Incomes are defined as the net
profits from business, interest on money invested,
or salary received for services. In computing the
business income permanent investments, such as i'm.
provements. are not included III tie expense item.
Nor is the cost OF living of an individual Or any Of
his ordinary expenses exempt. Al taxes paid the
state, county, school or nation are a nong the exemp-
tions.
In addition 10 the per cent, there are various
other additional. rates, which, together Titi It, make
the following schedule:
From $4,000 to $4,000, / per cent.
From $4,000 to $4,000, . per cent.
From $4,000 to $500, 8 per cent.
From $4,000 to $780, 0O, 4 per cent.
From 100000 to $4,000, 5 per cent.
From $3.50, 900 to $5OO,0OO, 6 per cent, and ali
incomes above $500, oOO, 7 per cent.
This tax applies to the income from, but not the
value of property acquired by gift, bequest, devise or
descent. Neither is it applicable to proceeds of life
insurance policies paid to the insured or to his heirs
at death.
In addition to the $4,000 exemption, there is an
additional exemption of $1,000 to married persons
living with husband or wife, also $500 for each minor
child, living with and dependent upon the parent, but
the total exemption on account OF children shall not
exceed 1000. Such exemption to operate only in
cases Of one parent, where both parents have an
Independent income. So, under the law, a single
son with an income in excess of $4,000 will be
taxed; a cnarried person, but without children, will
have a $4,000 exemption and a married person with
two or more children, a $4,000 exemption.
In computing net income under this law, the
interest upon any obligations of a state, or any sub
division, and upon the obligations of the United
States possessions; also, the salary of the president
president of the United States for the term for which
he has been elected, and the judges OF the supreme
court and inferior courts Of the United States, now
in office, and the salaries of employees Of the state
or any political subdivision, excepting cases where
the salaries paid by the government of the United
States are exempt. This, Of course, exempts all
state officials, as well as county and city officials, but
federal officials other than the president and judges
of the supreme court for the present terms are not
exempt.
The first tax will be computed on the incomes
beginning March Isl, last, and running until the 31st
OF next December, inclusive. This is done in order
that the tax may be computed on March list each
year.
Hereafter, .on the LIST of March (Beginn1ng March
LIST, 1914) every person having an income OF $S,ooo
or more for the year which has Just preceded must
make a statement, under oath, to the collector OF
internal revenue for the district in which such person
resides. or has his principal place of business, setting
forth specifically the gross amount OF income from
all separate sources and his total income, deductng
the items Of expense allowable, and shall render 70
such Official q. return Of his net income. II the col
lector has reason to believe that the return Is not
correct. he shall serve notice on the person making