Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-04-08
Income Tax Reaches the $4,000
Limit and Cuts Deep in Big Ones.

| joint stock company assc citation or in
siirance company which is taxable up-
on its net income under the corporation
| provision OF tho bill.
The bill excludes the compensation
of The President of the United States
during his term, judges OF the Su-
preme and inferior courts of the
United States. and compensation of
ali officers and employees of a state or
any political subdivision thereof
1t establishes system of collec-
lion of the tax at its source requir-
ing all persons, firms, partnerships,
companies, corporations. joint stock
companies, associations or insurance
companies. and all trustees, execu-
tors, administrators, receivers, etc.
and officers and employees of. the
| United States having the control or
disposal of salaries, wages, interest
and other profits and iner m.r Of am
other peison,. to withhold anJtpay to
the collector of internal revetaue the
amount 'of income tax duo from such
person All. such persons or firms ale
made personally liable Tor snch tax.
Persons or corporations liable to
make return on incomes who fail to
do so at specified time, are made
liable To a fine not exceeding $500 and
the penalty for f;slse or fraudulent re-
turns is fixed at 5000 or imprisonpQnt
not exceeding one year, or BOTH.
In formulating this additQRaf i'm
post, said Chairman Underwood in
his report, ''the attempt has. been
made to provide not only source of
Tevenne, but also a means of redress
11n fay
burdens which result from the prac-
tice of basing the federal income en-
tirely upon customs and internal rev.
enue duties. This is 4 system of tax
alton which inevitably throws the
burden of supporting the government
upon the shoulders of the consumers.
II eorrespondingly exempts the men of
larger income whose consumption of
the ordinary necessaries of life is sub
ject to tariff taxation in far less ag
gregate degree than that of the small
er income earners, who cXpend the
greater proportion of their resources
for the ordinary necessaries of life,
Speaking of the principle of taxa
ton laid down and the graduated sys-
tenn 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 APP
plies to the income tax included in
this bill and will be fully upheld
should it ever he called into question.
Owing to defects in personal proper
~ taxation. the larger incomes in the
United States have for many years
Teen able 10 escape with less than
their share of the general burden OF
taxation and this ineauity will be, ii
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 I'M
der the law on or before the first day
of June of each year and assessments
be paid on or before June 30, For de-
lay in making payments, and ten
DAYS after notice, there shall be added
the sum of five per cent on the
amount of tax unpaid and interest at
the rate of one per cent. a month
from the time the tax fell due.
The corporation tax provision, II Is
directed. shall be computed upon IN
come for the year ending December
81. 1913, and for each calendar year
thereafter It is provided, however.
that corporations may designate the
last day of any months as the day OF
The closing of the fiscal year and may
then have the tax computed on thc
basis of net income ending on its des-
ignated day. All labor, agricultural,
horticultural, fraternal, religious and
mutual benefit societies are made ex-
empt from this proposed tax.