The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-06-25
FINANCE COMMITTEE
REPORTS income TAX
House Provision b Changed in Many
Respeets-Exempions Fixed
at 5000.
TEXT OF THE MEASURE GIVEN

Fixing the exemption under the pro-
posed income tax law at $s,Uu. instead or
$4.Uoo as 1t was in the Underwood Dill
as 1t passed the House. taxing the in
comes OF both husband and wire, ana
providing that obligors under contracts
that require certain interest rate free
from taxation, should not be compelled
to pay on the income thus passed over
TO the obiigee. the majority or the
Finance Committee of the Senate per-
fected the income tax provision OF the
measure yesterday and made pubic the
substance of the changes 1t has made.
The provision was almost entirely re-
written. In addition to the features here
tofore mentioned the law give an ex-
emption to the Individual tax payer OF
$500 on account OF each dependent child
and 1900 on account or dependent
husband or wife as the case may be.
But in the case where both the husband
and wife have income in excess OF 5000
neither shall receive exemptions on ac-
count Of dependent children.
The question raised by the Interborough
Company Of New York that II was COM
PEELED to turn over a certain percentage
OF its profits to the Goulds, and that this
return under the contract was to be free
from taxation, was met by the commit
tee in a way that IL believes will be sat-
isfactory to the marlborough. 1t does
not require the company to deduct the
tax. but simply to report the income
turned over to the obligee under its con-
tract.
An important feature< of the bill re-
quires that persons, firms, or corpora
tons, who are in the business OF collect
ing foreign payments by means Of cou-
pons, checks. or bills of exchange, must
take out license from the Commissioner
of Internal Revenue. and be governed
in their business by regulations pre-
scribed by the Secretary OF the Treas
ury.
The income tax feature Of the bill has
been made much clearer by the Senate.
even where the effects Of the provision
has not been changed. The Senate
adopted the House provision which d.
rected the withholding Of the tax at the
source.
The section OF the bill which fixes the
new exemption limit at 5000 and the
dependent wife or children has been
added to Section d of the bill
1t reads as follows:
That there shall be aeducted from the
amount Of the net income OF each OF said
persons, ascertained as provided as here
in, the sum of 5000, Plus the sum OF
81, 900 additional II the person making the
return be a married man with a wife
living. with and dependent upon him and
being herself not taxable under the in
come tax law, or plus the sum OF 1900
additional IL the person making the re-
turn be a married woman. with a husband
living. with and dependent upon her. and
being himself not taxable under the in
come tax law: but in no event shall this
additional exemption of 900 be deducted
by both a husband and a wife. II the
person making the return shall be mar
ried man or a married woman. there
shall be an additional exemption Of 500
for each minor child living with and de-
pendent upon the taxable parent: Pro-
vided, That the additional exemption or
exemptions for children shall operate only
in the case of one parent in the same
family. and that the total deduction on
account OF children shall apply to a
widow or a widower with a minor and
dependent child or children: Provided
further, That where both parents are
taxable under this act because OF having
more than 5000 of net income each, the
deduction on account OF children herein
before provided for. shall not apply to
either