The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1913-04-18
LIMIT on INCOME
TAX IS $4,000.
Only Sums Ii Excess Of That
WlA Have to Pay
WILL YIELD OO,OOGOO0.

Levy VIII han9o from iNFNEsIeuN ou !
Salaries Between $4,000 and $4,000
70 8 Per Gent on Those Above sloo,-
ooc-Thsrs Are Penalties For EVad,
ing Payment.
The proposed income tax Is expected
TO yield an annual revenue Of 100000.
600. Chairman Underwood makes the
following explanation of the provisions
Of the law:
IN formulating this additional impost
the attempt has been made to provide
not only source OF revenue. but also
n mems OF redressing in some measure
the unequal tax burdens which result
from the practice OF basing the. federal
income entirely upon customs and IN
ternnl revenue duties. This Is a sys-
tenn of taxation which Inevitably
throws the burden OF supporting the
government upon the shoulders Of the
consumers. 1t correspondingly exempts
the men OF large income. whose con-
sumption Of the ordinary neeessaries
OF life is subject 10 tarirf taxation In
Eur less aggregate degree than is TINT
Of the smaller income earners, w no ex-
pend the greater proportion OF their re.
sources for the ordinary necessities OF
life.
In pursuance Of these ideas It has
been determined to levy upon incomes
Of more than $1,000 annually a Tux OF
/ per cent. to be imposed upon the ex.
cess OF such incomes above the $1,000
minimum. But In addition surtax
upon the higher classes OF income has
also been included. This surtax will
amount to per cent extra upon the
excess of incomes over $40. 600 and not
over $4,000 and o-per cent extra upon
the excess Of incomes over $4,000 and
not over 100000. and per cent upon
the excess OF incomes over 100000 an-
nually. This application OF the pro-
gressive principle in income taxation
is believed to be fully warranted by
the best theory on IeEsuhject and Will
add materially to the Yield obtainable
from fat rate OF taxation. The pro-
gresslEe principle has already been
sustained by the supreme court OF the
United States IN the inheritance tax
cases. and there can be no doubt that
the same principle applies to the In
come tax included In H. R. 10 and will
be fully upheld should 1t ever be called
into question. Owing to defects In per-
sonal property taxation the larger In
comes in the United States have for
AZ IN ~
less than their share of the general
burden Of taxation, and this Inequality
win be. It is believed. in part over
come by the plan now proposed.
Definition Of Income.
The effort has been made to arrive
at an inclusive definition Of income,
which is described as: ,s-....., as..
gains. profits and income derived from
salaries. wages OF compensation for per-
sonal service OF any kind and IN what
ever form paid. professions, vocations.
businesses. sales G dealings in property,
whether real or personal, growing out ot
the use Of or interest In real or personal
property, trade, commerce, interest, rent.
dividends premiums, securities or the
transactions Of any lawful business car
ried on for gain or proft 49,
In the attempt to establish reasona.
BILE definition of net income there has.
been a careful enumeration of all lie.
climate deductions properly to be
made from the total amount received
by any individual and including taxes.
losses. interest on state and municipal
bonds and other items. While re-en-
acting the present corporation tax,
some Improvements of detail have been
introduced. among them change In
the fiscal year. for which report is TO
be made, improvements that have long
been demanded in the interest of good
business practice and easy collection OF /.
the tax leved upon corporations.
The definite application Of the i'm
come tax principle has been made pos.
sible by the adoption by the requisite
number OF states of the sixteenth
amendment to the constitution OF Sthe
United States granting TO congress the
power to levy taxes upon incomes prac.
tcally at its discretion.