The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1913-09-19
TAX FROM INCOMES
WILL PILE UP DUCATS
Government to Grab Off Large
Sum BY Assessment
HOW IT WILL hit The RICH
Federal Law to Levy Toll On Salaries
OF Three Thousand Dollars
And More
HOW IT WILL HIT The RICH

When the new federal income tax
becomes effective residents of Wis
consin with large incomes will be
forced to pay as high as Is per
cent of their income in taxes. The
maximum state income tax in Wis
consln is 6 per cent, affecting all
incomes over $4,000, while the max
imum federal tax, affecting all in
comes over 100000 is per cent.
Just how the federal income tax
The total of the Wisconsin tax for
1912 was SO, 472,SS0, and with more
wealthy men like James ]. Hill and
F. f. Weyerhaeuser of St. Paul,
milling and numbering men of Min
neapolis and mining men of Duluth,
the aggregate incomes to be taxed
in Minnesota it is expected, will be
larger than in Wisconsin. On the
other hand the exemptions are larg-
err in the federal tax and the tax
on moderate incomes is smaller
Revenue Will Be $1oo,ooO,Ooo.
The estimated revenue to be de-
rived by the federal government
from the collection of the income
tax in the new tariff bill is $780,
100000, according to Cordell Hull of
Tennessee, author of the income tax
provision. This makes an average
of $2,000,000 for each state, but it
is probable that state with large CT
ties like New York, Pennsylvania
and Illinois will pay a larger pro-
portion for their population than
other states. The Wisconsin tax
commission found larger proper
ton of taxable incomes in the big
cities like Milwaukee and Superior
than in the rest of the state.
The federal income tax exempts
all individuals whose net incomes
are below $4,000, giving an addi-
tional $1,000 exemption for married
men and $500 each for each of the
first two children. In the Wiscon.
sin law the individual exemption is
only $500, with, $500 additional for a
man with a wife and 5000 for each
child under Is years, no matter how
many there be. Individuals also are
allowed certain deductions, such as
ordinary and necessary expenses in
carrying on the business, occupation
or profession, allowance for depreci-
alton of the property from which the
income is derived, losses not com.
pensated by insurance, dividends or
income from investments otherwise
taxed under the income tax law.
The Wisconsin Rate.
Both the Wisconsin and the feder-
al laws start with 1 per cent rate,
but the Wisconsin tax rate is more
rapidly progressive. After the ex-
emption is deducted, the rate is
per cent on the first $1,000, IL per
cent on the second $1,000, ~ per
cent on the third $1,000, IL per
cent on the fourth $1,000. per
cent on the fifth $1,000 and u per
cent more on each additional $1,000
up to 5k per cent on the twelfth
$1,000. On the excess above $4,000
, the tax is per cent.
In the federal law, as now before,
the conference committee, the nor
NAL tax is 1 per cent, with an add.
tional l per cent on incomes from
$4,000 to $4,000, per cent on in
comes from $4,000 to $4,000. 8 per
cent on incomes from $4,000 to $780,
900, a per cent on incomes from
100000 to $25O,OOO, per cent on
incomes from S25O,OO0 to 100000
and 6 per cent on all incomes in ex-
cess of 100000.
The Corporations Are Taxed.
The federal law imposes the nor
NAL 1 per cent tax on corporations.
The Wisconsin tax on corporations
runs from ! to 6 per cent, depend
ing on the earning power. The 1
per cent tax is levied where the
earnings are 1 per cent or less of
the assessed valuation of the plant
and the per cent tax on profits of
II per cent or more of the assessed
valuation.
The collection of the federal in
come TAX Will De maze Dy the COM
missioner of internal revenue and
Representative Hull estimates it
will not exceed / per cent of the tax
The expense of collecting the Wis
consin income tax for the first year
was $94,832, according to a report of
the Wisconsin tax commission to
the legislature last April. From this
should be deducted $4,000 saved by
abolishing the office of supervisor
of assessments, the report says.
Even if this is done, the cost will
be higher than per cent, for, al
though the tax aggregated $3,432, $50,
the commissions report shows that
of this $1,432,700 was offset by per-
sonal property tax receipts. a deduc-
ton being made when the income
is from property which has already
been taxed. AT the date of the re-
port only $1,62S,917 had been paid
Continued on Page Two.