Evening journal., 1913-10-04
FEATURES or THE
INCOME TAX LAW
Minimum Exemption Is PIaCG1
at $4,000 Annually.
$1,000 MORE FOR FAMILIES

$4,000, Increasing Until the Max
mum Of Per Cent Is Reached on
the Excess Above $500, o,ooo-Penaltiss
Fer Failing to Make Reports.
The income tax feature of the new
tariff law. made possible by the adop.
don Of an amendment to the federal
constitution, marks a new feature in
tariff legislation. 1t is expected to
yield an annual revenue exceeding
S100.00o,000, which makes possible the
reduction Of tariff duties.
Under the terms Of the new law a
tax OF per cent will be levied on all
incomes In excess of $1,000 with GER
tain exemptions. The bill provides
that there shall be IAN additional tax
Of 1 per cent per annum upon the
amount by which the total net income
exceeds $4,000 and does not exceed
$4,000, and per cent per annum
upon the amount by which the total
net income exceeds $4,000 and does
not exceed $4,000, 3 per cent per an
mum upon the amount by wNich the
total net income exceeds $4,000 and
does not exceed 100000, 4 per cent
per annum upon the amount by which
the total net income exceeds 100000
and does not exceed S250,00O per
cent per annum upon the amount by
which the total net income exceeds
$3.50, 900 and does not exceed $500. 600
and s per cent per annum upon the
amount by which the total net income
exceeds $4,000"
individuals TO Make Returns.
Every person subject to the income
tax must make report Of his income
TO the collector Of internal revenue in
the district in which he lives or in
which his business is carried on.
In defining what shall be. considered
income for taxation, the bill says:
Subject only to such exemptions
and deductions as are hereinafter al
7 lowed, the net income of a taxable
person shall include gains, profits and
income derived from salaries, wages
or compensation for personal service
Of whatever kind and in whatever form
paid, or from professions. vocations,
businesses, trade, commerce or sales or
dealings in property, whether real or
personal, growing out OF the ownership
or use OF or interest in real or personal
property; also from interest. rent. divi-
! dends. securities or the transaction Of
any lawful business carried on for gain
or profit or gains or profits and income
derived from any source whatever, in
cluding the income from but not the
value of property acquired by gift, be-
quest, devise. or descent, provided that
the proceeds of life insurance policies
paid upon the death of the person in
sured or payments made by or credited
to the insured on life insurance, en-
dowment or annuity contracts upon
the return thereof to the insured at the
maturity Of the term mentioned in the
contract or upon surrender of the con-
tract shall not be included as income"
The provisions Of the bill for exemp-
tons as finally agreed on are:
There shall be deducted from the
amount of the net income of each Of
said persons, ascertained as provided
herein, the sum of $1,000 plus $1,000
I additional if the person making the re-
turn be a married man with a wife.
living with him and being herself not
taxable under the income tax law. or
plus the sum of $1,000 additional If the
J person making the return be a married
, woman with a husband living with her
and being himself not taxable under
I the income tax law. but in no event
, shall this additional exemption OF ST.
c 600 be deducted by both a husband
and wife,
C Foreign Residents TO Be Taxed
The bill contains provisions for the
taxation of the incomes of citizens re
siding in foreign countries on incomes
derived from property owned or bust
ness carried on in the United States.
c The bill also provides:
6 That If any person, corporation.
: Joint stock company association or in
q surance company liable to make the
e return or pay the tax aforesaid shall
{ refuse or neglect TO make return at
: the time or times hcreinbefore speci.
o fed in each year, such person shall be
q liable to a penalty of not less than $50
= nor more than $1,000. Any person or
C any officer of any corporation required
~ I DN law u HIM. c4Eu OF verify
any return who makes any false or
fraudulent return or statement with in.
tent to defeat or evade the assessment
required by this section to be made
Ok shall be guilty of a misdemeanor and
50 shall be fined not exceeding $1,000 OF
se be imprisoned not exceeding one year
e or both. at the discretion OF the court
NJ with the costs of prosecution"
&c The first tax is to be levied and coll
c lected on incomes from March /. 1918
" to Dec. 81, 1913 Thereafter the in
e come shall he computed for calendar
&c years ending with Dec 81.
&c The bill also provides that the In
come of states. territories or poitica
subdivisions shall not be taxed. anC
c there shall be no tax levied on incomes
derived by states and municipalities
ee from the operation of public utilities
but this does not exempt the corpora
&c ton operating the utilities from payinl
g tax on the portion OF the income due q
ee the municipality.