The Yale expositor., 1913-04-10

revenues to be derived from imports
by virtue of the greatly reduced tariff
and the transfer TO the free list Of
articles that are classed as necessa-
ries of living.
Incomes OF taxable persons shall
include gains, profits and income de-
rived from salaries, wages or com
pensation for personal service OF
whatever kind and in whatever form
paid, or from professions, vocations,
business, trade. commerce or sales or
4 dealings In property, also from inter
est, rent. dividends, securities. inciud-
ing income from property. income
from but not the value OF property
acquired by beausst, devise or de-
scent, and also proceeds OF life insar-
ancs policies paid upon death Of per
sons insured.
| Provision Made for Deductions.
The bill allows as deductions in
computing net income all necessary
! expenses actually incurred in carrying
on any business, not including per-
sonal living or family expenses, inter
| est accrued and payable within the
| year by taxable person OIL indebted
ness; all national. state. county
school and municipal taxes, not In
Guiding local benefit taxes; losses in
CURED In trade OF from nres, storms
or shipwreck not compensated by In
surance or otherwise: debts actually
ascertained as worthless and charged
| on; also reasonable allowance for
wear and tear on property: but no de-
duction will be allowed for expense
| OF restoration or improvements made
TO increase property value.
1t excerpts also, in computing net in
come, amounts received as dividends
upon the stock OF any corporation,
| joint stock company, association or
insurance company which is taxable
upon its net income under the cor.
porstion tax provision OF the bill.
The bill excludes the compensation
OF the president OF the United States
during his term, that OF judges of the
Supreme and inferior courts OF the
United States. and compensation OF
all officers and employees OF a state or
any political subdivision thereof.
System Of Collection Framed.
Il establishes a system OF collection
Of the tax at It's source, requiring all
persons, firms, copartnerships, com
panies, corporations, joint stock COM
panies, associations or insurance COM
| panies, and all trustees, executors, ad-
mlnistrators. receivers. etc, and oni-
| GERS and employees OF the United
| States having the control or disposal
OF salaries, wages, interest and other
profits and income OF another person
to withhold and pay to the collector
OF internal revenue the amount OF In
come tax due from such person. All
such persons or firms are made per-
sonally liable for such tax.
Persons or corporations liable to
make return on incomes who fail to
do SO at q specified time, are made
liable to a fine not exceeding $500 and
the penalty for false or fraudulent re-
turns is fixed at $1,000 or imprison-
ment not exceeding one year, or both.
In formulating this additional i'm
post" said Chairman Underwood In
his report, the attempt has been
made to provide not only a source OF
revenue, but also 4 means or redress
ing in some measure the unequal tar
burdens which result from the prac-
tice OF basins the federal income en-
tirely upon customs and internal reye-
nue. duties. This Is system OF tax
| alton which inevitably throws the bur-
den OF supporting the government up
on the shoulders OF the consumers.
II correspondingly exempts the men
OF larger income. whose consumption
OF the ordinary necessaries OF life is
subject to tariff taxation in far less
aggregate degree than is that OF small
er income earners, who expend the
greater proportion OF their resources
for the ordinary necessaries OF life"
Underwood Defends Plan.
Speaking OF the principle of taxa
tion laid down and the graduated sys-
TEN proposed, Mr.. Underwood de-
clared:
The progressive principle already
has been sustained by the Supreme
court OF the United States in the in
heritance tax cases and there can be
no doubt that the same principle az
plies to the income tax included IL
this bill and will be fully upheld
should 1t ever be called into question.
Owing TO defects in personal property
taxation. the larger incomes in the
United States have for many years
been able to escape with less than
their share OF the general burden OF
taxation, and this inequity will be, It
is believed, in part overcome by the
plan proposed"
The bill provides that all taxable
persons shall be notified OF the amount
for which they are liable under the
law on or before the 1st day of June
OF each year and assessments must be
paid on or before June 30. For delay
in making payments and ten days aft
er notice, there shall be added the
sum OF 5 per cent. OF the amount OF
tax unpaid and interest at the rate OF
4 NOR aapt n month from the time the