Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1913-05-17


anfly dssliiaSlsnea by the aesx nsGI
The Income tax Jaw VIII ia do Re
specter Of persons or corporations oT
Of the promises that corporations have
made to persons.
Many issues Of bonds, such as the
United States Steel corporations secu-
rites have stamped across their faces
In bold letters. mot subject to taxa
ton" And the purchaser is assured
that he will always receive the net
price as quoted by TIE broker.
All this wilslse changed when the
income tax bin becomes law. All bonds
will be subjected to taxation except
those issued by the states. counties and
municipalities.
It is estimated that the individual
who will feel this section most keenIy
il Andrew Carnegie. who holds more
than S2O0,0o0,0o0 Steel bonds. which
heretofore have been exempt from tax.
alton
Members of the Vanderbilt family,
who hold large blocks of stocks OF the
New York Central and its allied and
subsidiary companies, Will be heavily
hit
Representative Hun. who wrote the
blu. said that the committee could not
respect the promises made to one set of
investors by corporations and that the
interest on all bonds must be charged
at the same rate that is charged against
other sources Of revenue.
Therefore when Carnegie receives his
interest next year he will find that IN
Gle Sam has clipped OF a substantial
portion OF ,his, .sn0ntaxable" ineome MT
the same ratio thaf he has charged
John Smith and John Brown on their
salaries or the incomes on their sala-
ries or the incomes on their real estate
holdings.
Committees Theory.
The Committee in preparing the bin
worked Oh AM generally accepted the.
DRY that direct tax is usually dis
tasteful to those assessed, and for chat
reason as much rs possible the tax
viii be COLLECTED at the source.
The greater proportion of incomes
which will fall under the new system
will come from corporations, and there
fore the snew Law will put IL squarely
up to the officers of corporations to de-
duct from the interest paid stockhold.
ers the amount which they owe the
government u
Here Is an example of the manner in
which the holdings in corporations will
be assessed and taxed; At the~end Of
the fiscal year the officers of all cor
porations will present to the internal
revenue collector a statement showing
the names of stock and bond holders
Ind the amount held in each name.
Attached TO this win be schedule
showing the earnings of the corpora
zion and the interest that has accrued
10 each stakeholder
In every case where the interest pay
hbld TO stock or bond holder amounts
to more than 1000 and less than, $20,-
. eoQs they treasuret of the corporation
/ viii deduct per cent and mail tothe
treasury department check for|lthe
Ahfolhft.i ! MI kfA
In the cases of the larger stocl1hold-
ers, where. they are GABLE to the tax Of
an additional 4 2 or per cent, the
same course will. be followed When
the check reaches the stakeholder he
viii find that his fiscal arrangements
have been attended to and that he has
beep charged with the interest he owes
indie Sam in much the same way'that
he might have been charged with a
special assessment of one sort or an
other af d
The officers of every corporati0nwill
collect the full amount and turn ii
over to the government and viii make
no deductions for the first $4,000,
which is exempted. except In the dases
where they are specifically requested
to do so by the individual.
Exceptions Not Allowed.
For example, if an individual had In.
terest in the amount of $4,000 coming
from two corporations he would have
a total Of $4,000 In reality, but only
S18.O0Ogof this amount would be taxa
BILE. The officers of the corporations
are not allowed by the law to make
any exception except when specifically
notified to do so by the owner Of the
stock. ksfAs ftAf
When the individual affected notifies
the corporation he is also required by
law to notify the collector Of internal
revenue SO that the original $4,000 may
be exempted for him.
In order TO Offset abuses that might
arise under this system the collector
nc infnrnnI rnrnniia will kanIn a nnln.