Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1913-11-06

tax unless he has the income warranting it's payment. The
only material objection to the federal income tax has been that
it invaded a field of taxation already occupied in one way
or another by the States and opened the door to still further
reprisals and in time might seriously interfere with the sources
of income of our individual commonwealth.
The income tax having been made one of the features OF
the Underwood tariff act, residents of Vermont in common
with those of other States are beginning to inquire relative to
the operation of the tax. They want to know whether the
law applies to them, and if so, when and how.
A host of people will be relieved to know that nobody hav-
ing an annual income Of $4,000 or less will pay a tax thereon
to Uncle Sam. If the person making the return is married, the
law exempts $4,000 income from the federal income tax, but if
both husband and wife have separate incomes exceeding
$4,000 only one of them can claim the matrmon exemp-
ton.
This provision puts a bounty on matrimony or a tax upon
celibacy, according as one looks at the proposition.
In order to secure a basis for the laying of this tax it is
provided that all items of income from any source enjoyed by
citizens of the United States or aliens residing in this coun-
try shall be added together, but from this sum are to be de-
Quoted numerous items.
This basis of income taxation will not include income in
the shape of interest on bonds or other obligations of the
United States or any of it's possessions, or of any State or any
political subdivision thereof, or the value Of property acquired
during the year by gift, bequest, devise or descent, though
income from such gifts or requests will be included, or the
proceeds of life insurance policies paid upon the death of the
insured, or the repayments made to holders of life insurance,
endowment or annuity contracts, upon the surrender of such
contracts.
An individuals personal taxable income will be ascertain
ed by deducting from his gross income all necessary expenses
actually paid in carrying on any business, but not including
personal, living or family expenses; all interest paid on indebt-
edness; all taxes paid, national, State, county, school and num-
icipal, but not assessments for local benefits; all losses incur
red in trade, or arising from fire, storm, shipwreck, and not
compensated by insurance or otherwise; worthless debts
charged off during the year; reasonable allowance for depre-
citation of property, arising from its employment; all divi-
dends received from stock of corporate concerns and all other
amounts received from the earnings of a corporation or Joint
stock company which is taxable upon its net income under this
act; any income the income tax upon which has been paid or
withheld for payment at its source, as prescribed by the in
come tax law; in the case of any person, not living with a
wife or husband, $4,000; in the case of a man and his wife
living together, $4,000; in the case of President Wilson and
judges of the United States who were in office at the date of
the enactment Of the law; and in the case of all officers of any
State or political division thereof their annual compensations.
The individual pays an income tax on the income which
remains after making these deductions. It can be seen there
fore, that, whatever else it may do, the federal income tax law
is likely to make Americans a nation of bookkeepers.
The exemption of the stock of corporations is granted on
the ground that al. corporations must pay to the federal gov
eminent a tax of l per cent. per annum upon their net earn
ings, and if holders of stock were also taxed, there would be
double taxation. To secure this exemption the stakeholder
must file a proper affidavit with the internal revenue COM
missioner.
1t is provided, however, that if the income from such
stock exceeds $4,000 a year, then the holder must pay an
additional tax which increases with the increase in income.
1t is figured for illustration that Mr.. Rockefeller would pay
an income tax of about 6 per cent annually.
Probably few individuals in Vermont will be personally in
terested in this super-tax on income of above $40, 900 on stocks.
The normal income tax which will be paid upon the net
income left after making the various deductions named
from the net sources stated is l per cent per annum, the year
ending December 81, but for the present year of 1913 only
five-sixths of the year will be included, the administration
having begun in March.
1t is also provided that on or before the first day Of
March, 1914, and the first day of March in each year there
after a true and accurate return under oath or affirmation
shall be made to the internal revenue officer by each person
of lawful age, having a net personal income of So, 200 or over
coming under the provisions of this act, with various excep-
tons.
All assessments are to be paid on or before the first day
OF June in each year.
One of the striking provisions of the law is that certain
persons or organizations having control of the income of other
parties are required to withhold the amount of the income tax
thereon and turn the same over to the government of the
United States, this is called Withholding his tax at the source
of income.
Any corporation, joint stock company or association MAX
ing a fraudulent return is liable to a penalty Of not exceeding
$4,000 and the offending persons are liable to a heavy pen
atty of fine or Imprisonment or both.
The tax collector is required to give a receipt to each in
dividual taxpayer, and is not allowed to divulge any informa-
ton regarding amounts involved.
The provisions dealing with the payment of an income
tax by the individual direct are comparatively simple but the
requirements of organizations or other bodies, especially with