The Dickinson press., 1913-04-26
LIMIT ON INCOME
TAX IS $4,000
Only Sums In Excess Of Thlt
Will Have to Pay.

viii Have to Pay.
WILL YIELD s1oo,ooo,ooo.
Levy Will Range From I Per Cent on
Salaries Between $4,000 and $4,000
to 8 Per Cent on Those Above $780,.
ooo-Thsre Are Penalties For Evad.
ing Payment.
The proposed income tax is expected
to yield an annual revenue Of 100000
600. Chairman Underwood makes the
following explanation Of the provisions
of the law:
In formulating this additional impost
the attempt has been made to provide
not only a source Of revenue, but also
q means Of redressing in some measure
the unequal tax burdens which result
from the practice Of basing the federal
income entirely upon customs and in
ternal revenue duties. This is a sys-
tenn Of taxation which inevitably
throws the burden Of supporting the
government upon the shoulders of the
consumers. 1t correspondingly exempts
thel men of large income, whose con-
sumption Of the ordinary necessaries
Of life is subject to tariff taxation in a
far less aggregate degree than is that
Of the smaller income earners, who ex-
pend the greater proportion of their re-
sources for the ordinary necessities Of
life. ,.sr
In pursuance Of these ideas it has
been determined to levy upon incomes
Of more than $4,000 annually a tax of
/ per cent to be imposed upon the ex-
cess Of such incomes above the $4,000
minimum. But in addition a surtax
upon the higher classes of income has
also been included. This surtax will
amount to l per cent extra upon the
excess Of incomes over $4,000 and not
over $4,000, and 2 per cent extra upon
the excess Of incomes over $4,000 and
not over 100000, and 8 per cent upon
the excess of incomes over 500, 900 an
nually. This application of the pro-
gressive principle in income taxation
is believed to he fully warranted by
the best theory on the subject and will
add materially to the yield %obtainable
from a nat rate Of taxation. The pro-
gressive principle has already been
sustained by the supreme court Of the
United States In the Inheritance tax
casesssand there can be no doubt that
the IsAine principle applies to the in
come tax included in H. r. 10 and will
be fully upheld should it yer be called
into question. Owing to defects in per-
sonal property taxation the larger in
comes m The United States have Tor
many years been able to escape with
less than their share of the general
burden of taxation, and this inequality
will be, It Is believed, in part over
come by the plan now proposed.
Definition Of Income.
The effort has been made to arrive
at an inclusive definition of income,
which is described as:
gains, profits and income derived from
salaries. wages Of compensation for per-
sonal service Of any kind and in what
ever form paid, professions. vacations.
businesses. sales or dealings in property.
whether real or personal, growing out Of
the use Of or interest in real or personal
property trade. commerce. interest. rent.
dividends. . premiums, securities or the
transactions OF any lawful business car
ried on for gain or profit
In the attempt to establish a reasons
BILE definition Of net income there has
been a careful enumeration Of all To-
gitimate deductions properly to be
+ made from the total amount received
by any individual and including taxes.
losses, interest on state and municipal
bonds and other items. While reel
acting the present corporation tax,
some Improvements Of detail have been
introduced, among them q change In
the fiscaEty year, for which report is to
be made. improvements that have long
been demanded in the interest Of good
business practice and easy collection OF
the tax leyed upon corporations.
The definite application Of tho in
come tax principle has been made pos
sible by the adoption by the requisite
number Of states Of the sixteenth
amendment to the constitution Of the
United States, granting to congress the
power to levy taxes upon incomes prac'
tically at,its discretion. ~
FEATURES OF THE NEW