El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-12

the income tax provided for in
the Underwood bill promises to be
much simpler in its make up and mora
easily operated than the machinery of
collecting similar taxes in anv Other
CO untry- Especially will il be- far in
advance of the English methods Of
collecting income taxes. There one de-
-ail has been added, here another and
elsewhere still another, until IL re-
sembles house that has been built 4
II cm at time. No Englishman would
write an Income tax law like the pres
ent one IL the books were clean and
yet nothing short of wiping off the
slate would permit much Improvement. I
Refunds Eliminated.
The proposed American law does
away with Attachments and refunds ana
a half dozen other cum bersOfme fea-
tues Of the English law. John Bull
has his subjects pay their fun taxes, in
usuy instances, and then under a svs-
TEN Of refunds, pays some of the tax
back again For instance, here is a
man whose income does not exceed the
usual exemption who is a stOckhOldcr
in . corpora ton. The corporation must
pay his tax on his income from it.
whether that income is large enough
TO be taxed or not. If it is not large
eTCugh he can have il refunded to him
afteTWard. This is but one Of the many
unsatisfactory features Of the admin
istrative phases Of the English income
tax law.
The proposed law here does not in
tend thar the government shall collect
any tax upon exempted incomes.
whether these incomes arise wholly or
in part from investments or not. Con-
sequenuy. man who owns stock in
corporation, but whose income is not
above $4,000, needs only to notify the
corporation that he claims an exemp-
ton + T the income he derives from il.
and IL his statements are true he viii
have no further worry. His English
Hr=e.A
Of red tape to get back taxes which
ought never to have been assessed
against him
lew Exemption May be Claimed.
The reader who has had assessments
made against his stock and has seen
them paid out of the earnings. has ex-
perienced just about what will take
place under the income tax law. Every
corporation in the country will be re-
CURED 10 furnish the internal revenue
bureau with a list Of its stockholders.
IT'S bOndhOlderS, and others deriving an
income OF more than $4,000 from Il.
They viii be required to pay income
tax upon the income received from
them by every such stock or bond
holder, who does not file a claim II
exemption. Therefore, the only way To
escape the tax is TO serve notice upon
the person authorized to pay il for you
that your entire income is not enough
TO exceed the exemption. If a man is
stOckhOlder in a half dozen companies
ne can claim exemption in those from
which his totaf income does not eX-
coed $4,000. Or. if he has an income Ct
$1,000 from each OF three companies,
and an income of $4,000 from a fourth
corporation, he can claim his full ex-
emption from the one corporation and
allow the three TO pay the tax in full
and the fourth only on the $1,000 above
the exemption.
Card Index OF the L. s.
The internal revenue bureau viii
have a most elaborate checking system
by which IL can trace up most of the
people subject. TO income taxation. /
First, it viii have a national card in |
CeX or all the people who enjoy an
nual incomes in excess Of $4,000 This
will be built I'D from many sources. /
In the first place there viii be the list
OF income receivers from all corpora
lions. Joint stock companies. and 9TH
ers who must advise the government
as to the names and addresses Of all
those enjoying taxable incomes This
VIII give clue to perhaps tWO-thirds
OF the people likely to have taxable in
comes Then there are the people who
are large realty owners As their
deeds are on record. and their property
listed upon the text books Of the cities
and counties in which the property is
located, the internal revenue collectors
ca ncheck them up They can also as
certain who collects the rents. who
handles the interests accounts. and
who looks after the other affairs Of
holders Wherever possible these pe0-
pie Will be asked to remit the income
tax directly to the internal revenue
collector. and they will be under a
heavy penalty to make such returns
as viii keep the treasury department
advised as to the people with whom
they deal who are liable to income
taxation. and as to the amounts Il
their incomes derived through sources
Of which they have legal knowledge
VIII Determine Profits
The determ1natOn of the trainers or
the proposed law viii tend to make It
difficult for rich men to escape their
taxes since most of their holdings are
In such shape that the treasury de-
partment can keep tab upon them and
check up the income returns OF an in
oivtdual with the returns from these
other sources Where the two sets OF
returns agree there viii be no further
trouble, but the man whose individual
return is lower than the returns made
for him will have a rather unpleasant
chance to explain
In this respect the law undoubtedly
viii prove an aid in determining just
what are the profits OF big corpora
lions and wealthy individuals. Just as
the interstate commerce commission 1
has compelled the railroads to keep
records that show exactly what are the
profits Of their operations. and as the
corporation tax law requires corpora
tons TO show their actual incomes. 30
will the individual have to give in his
income. This probably will prove OF
much value for statistical purposes
Careful Check Is Planned.
There viii be no undue inquistiorial
proceedings in the collection Of the in
come tax, If the present policy with
reference to the corporation tax is
continued. The corporations are given
to understand that if they come for
ward and try to meet the law they have
nothing to fear from its operation. but
that If they try TO get around il there
will be an investigation that Will in
vestigate.
The returns OF every corporation.
stock company. and individual sub
jet to the tax will be carefully
checked up, one feature with another,
and also with other information in
hand and If there is no evidence Il
any tax lodging. wilful or unintention-
al, that will about end the matter.
But if it be found that the person
making the return has failed to list
the items Of his income in reasonable
accord with experience. he may be
asked why. For instance. here is a
man who reports a net income Of S12.-
600 a year as a merchant. He is re-
quired to give his gross income. and
also his expenses OF conducting the
buRiness- If the returns show a net
income very much higher than might
frns