Middlebury register. (Middlebury, Vt.) 1886-1937, 1913-10-31
THE NEW FEDERAL INCOME TAX
AND HOW IT OPERATES.
[From the Burlington Free Press. !

The income tax in general is rightly
regarded as the most equitable form of
taxation possible, for the individual
pays no tax unless he has the income
warranting its payment. The only
material objection to the federal income
tax has been that it invaded a field of
taxation already occupied in one way or
another by the States and opened the
door to still further reprisals and in
time might seriously interfere with the
sources of income of our individual
commonwealth.
The income tax having been made
one of the features of the Underwood
tariff act, residents of Vermont in COM
mon with those of other States are
beginning to inquire relative to the
operation of the tax. They want to
know whether the law applies to them,
and if so, when and how.
A host of people will be relieved to
know that nobody having AN annual
income of So, 600 or less will pay tax
thereon to Uncle Sam. If the person
making the return is married, the law
eXempts 81, 900 income from the federal
income tax, but if both husband and
wife have separate incomes exceeding
$1,000 only one of them can claim the
matrimonial exemption.
This provision puts bounty on matri-
mony or tax upon celbacy, according
as one looks at the proposition.
In order to secure basis for the lay
ing of this tax it is provided that all
items of income from any source en-
joyed by citizens of the United States
or aliens residing in this country shall
be added together, but from this sum
are to be deducted numerous items.
This basis of income taxation will not
include income in the shape of interest
on bonds or other obligations of the
United States or any of its possessions,
or of any State or any political sub
division thereof, or the value of prop
erty acquired during the year by gift,
bequest, devise or descent, though in
come from such gifts or requests will
be included, or the proceeds of life
insurance policies paid upon the death
of the insured, or the repayments made
to holders of life insurance, endow-
ment or annuity contracts, upon the
surrender of such contracts.
An individuals personal taxable in
come will be ascertained by deducting
from his gross income all necessary ex-
penses actually paid in carrying on any
business, but not including personal,
living or family expenses; all interest
paid on indebtedness; all taxes paid,
national, State. county, school and
municipal, but not assessments for local
benefits; all losses incurred in trade, or
arising from fire, storm, shipwreck,
and not compensated by insurance or
otherwise; worthless debts charged off
during the year, reasonable allowance
for depreciation of property, arising
from its employment; all dividends re-
ceived from stock or corporate concerns
and all other amounts received from the
earnings of a corporation or joint stock
company which is taxable upon its net
income under this act; any income the
income tax upon which has been paid or
withheld for payment at its source, as
prescribed by the income tax law; in
the case of any person, not living with
a wife or husband, $1,000; in the case of
a man and his wife living together,
81, 900; in the case of President Wilson
and judges of the United States who
were in office at the date of the enact
ment of the law; and in the case of all
officers of any State or political division
thereof their annual compensations.
The individual pays an income tax on
the income which remains after making
these deductions 1t can be seen there
fore, that, whatever else it may do,