Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1913-10-03
..................,425, 900 $50, 29S, 900

President Wilson. the federal judges of
the Supreme and inferior courts now hold
ing office. and employees "Of state or any
political subdivision thereof" are the only
persons specifically exempted from the tax
by the new law. The President and judges
now in Office were made exempt to escape
any questions of the constitutionality of
the law, and their successors in office will
be compelled to pay the tax.
The general public is expected to give
close study to the new law in the next
few months, as the first burden of the
tax payment rests with the individual citi-
zen, and his failure to report his income is
punishable by fine. II is admitted that
when the first returns are made many tax
able persons probably will escape payment,
but with each year the governments lists
of persons with taxable incomes will be
made more nearly complete.
Two primary methods of collecting the
tax are contained in the law One is the
individual return made by the citizen {;
the other the returns by corporations and
other employers who pay their employees
taxes "at the source" Under the law,
as it will be signed by President Wilson
next week. very large company employ
ing labor will be compelled to report any
regular salaries it pays in excess of the
$4,000 figures, and will pay the taxes for
its employees and deduct the tax from their
pay envelopes.
This payment at the source" will apply
to salaries. rents, interest, royalties, part
nership profits and some other sources of
income. and persons receiving such in
comes must be prepared to show that the
money has paid its tax at its source.
In figuring up his net income for the
taxpayer the American business man, after
deducting $4,000 for himself OF "a 900 if
married, will have the right to claim the
following additional exemptions
Necessary expenses of carrying on bust
ness, not including personal, living or fami-
ly expenses.
Interest paid out on Indebtedness.
National, State, county, school or munich
pal taxes paid within the year
Trade losses. or storm or fire losses. not
covered by insurance.
Worthless debts charged off during the
year.
A reasonable allowance for the deprecia-
ton of property.
Dividends from companies whose income
has already been taxed.
Interest from State, municipal or govern
ment bonds.
1t is clear provision Of the law, how
ever that the taxable person must make
return TO the internal revenue collector
for his entire met income" and exemp-
ton claimed under the law must be sub
mitted to the federal officers for them
to determine upon their reasonableness or
legality.
The amount OF the income tax as finally
agreed upon follows: From$3, 900 to $50. :
900. one per cent from $4,000 to $780,
900, two per cent; $4,000 to $4,000
three per cent; SIS 900 to 100000. -four
per cent; 100000 to $250,OOO. five per
cent $3.50 900 to$5OO. 900, six per cent
above $500, 900. seven per cent
A single man with an income Of $25, 900
for example. would pay one per cent on
SIT 900 and two per cent on $4,000, d
total tax Of $270. If married. the first
tax of one per cent would apply to only
SIG, 900 Of the income.