The Washington times., 1913-03-21
INCOME TAX LIMIT
MAY Be BUT $500
Democrats Plan to Reduce the
Exemption Figure, to Make
Up for Tariff Deficiency.
By THEODORE TILLER.

An income tax law which will reach
every person who makes more than
$500 annually is now in prospect TN
der the Democratic scheme of tariff
revision. There has been sort of
general understanding heretofore that
the fellow who made less than 5000
would be exempt, but the Government
probably will need the revenues, and
indications today are that the exemp-
ton will be put as low as $500.
Such a law would prove a jolt to all
the assistant secretaries in the vari-
Gus Government departments. to a few
bureau chiefs and Government clerks
and to the fellow on the street who has
been proud to boast in the past that
his income was up in the thousands" I"
Congressman Hull, the corporation
and income tax expert of the Ways
and Means Committee, is of'in a room
q by himself today. He is poIing
over a bunch of figures showing the
operation of the income tax in foreign
countries and Is endeavoring to find an
equitable rate which Congress may i'm
pose upon the high-salaried American
and the trust magnate.
While the actual rates in the income
tax bill will not be fixed until a state
ment is compiled showing the loss of
revenues under the contemplated tariff
man who draws down more than $500
per- Furthermore, Mr.. Hull's plan is
that the incomes shall be collected at
their source, and there is no avenue of
escape. Before another year rolls
round the internal revenue collector will
be abroad in the land levying tribute
upon nearly everybody who looks pros
porous.
Hull Is Framing Bill.
Congressman Hull has gone into COM
parative retirement When he emerges
he will have under his arm what prob
ably will be the income tax bill which
the States recently declared to be con-
etitutional, and which the Ways ind
Means Committee and Congress is ex-
pected to approve.
Under the Democratic plan for the re-
vision of the tariff. the income tax vii
be the lifeline for the sinking Treasury.
Cuts in the duties of every schedule
ordinarily would leave the country's
revenues in desperate straits. Now that
an income tax is constitutional, despite
that five-to-four decision of the Su-
preme Court against it number of
years ago. the task of Democratic tariff
revision Is much simplified.
The duties may be slashed on sugar,
lumber, steel, wool, cotton manufac-
lures, machine tools, agricultural imple-
mentS and farm t0OlS-dnd the income
tax and Mr.. Hull will rush to the res
cue. The fellow with the good salary
pays the freight. and the working man
who draws his weekly wages is eX-
pected to sit back for once in his life
and wear a satisfied expression.
The politicians claim that the working
man has been indirectly taxed for many,
many years. Here's an income tax bill
which will levy direct tribute upon the
man who holds position" instead Of
q "job."
Experts Figuring Rate.
The new income tax will absorb the
existing corporation tax Law, which now
produces nearly sS000o.ooO annually in
revenue. In the absence of definite
figures by experts of the ways and
Means Committee as to the inroads
upon the Treasury which will be newt
able under the Underwood tariff bill, II
IN now estimated that the income tax
must produce between SIS, 900 and
$150,0o0 900 annually.
The rate of tax will be fixed in ac-
cordance with the report of experts
who are now figuring out the estimated
revenues under the Underwood tariff
bill. II il is shown necessary, the rate
On so-called unearned incomes and DOR
mant fortunes will be higher, the Der1-
ccratic view being that the taxpayer
drawing the more modest income should