The Madisonian. (Richmond, Ky.) 1913-1914, 1913-10-07
MANY WILL PAY INCOME TAX
Estimates That 100000 Persons Are
Affected, and That $e2,2ss, 600 VIII
Be Raised.
INCOME TAX SCHEDULE.

Washington.-Accor to esti-
mates completed by the treasury ex-
perts, 425, 900 American citizens must
keep such accurate account of their
incomes this year that they will be
able to report to the income tax col
lector next spring exactly how much
they owe the government under the
new income tax law.
So far as the taxable American is
concerned. the income tax law Is now
practically In force against him. While
bodied will not be signed until next
week, the first returns do not have to
be made to the internal revenue col
lectors before March 1, 1914. But when
the returns are made they will COW
er the income Of citizens from March
/, 1918, to December 81, and the FIRST
payment OF tax will be for money re-
ceived during this period.
Every single person (citizen or for
eign resident) whose annual income
exceeds $4,000, and every married per
son with an income above $4,000, Is
expected to report his or her re-
ceipts. in detail to the government
agents March 1 OF each year.
To Produce $s2 ,ooo, 600.
The estimate completed indicates
| that the income tax will produce $780,
10000 from the 425,00O persons taxed.
To this will be added the $35, 000,0
or more produced by the present cor
poration tax, which is continued as
part of the law.
President Wilson, the federal judges
of the Supreme court now holding of
] fee 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 Ques-
tons of the constitutionality OF the
! law, and their successors in Office will
be compelled to pay the tax.
First Burden Is on Citizen.
The general public is expected to
| give close study to the new law in
the next few months, as the first bur
den of the tax payment rests with the
individual citizen, and his failure to
report his income Is punishable by a
| fine.
1t is admitted that when first re
turns are made many taxable persons
probably will escape payments, but
with each year the governments lists
| of persons with taxable incomes will
be made more nearly complete.
Methods of Collecting Tax
Two primary methods OF collecting
the tax are contained in the law. One
is that 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 bt
signed by President Wilson next week
every large company employing labor
will be compelled to report any regu
lar salaries it pays in excess of thu
$4,000 figures, and win pay the taxes
for its employees and deduct the tai
from their pay envelopes
This payment at the source viii
apply to salaries, rents, interests, roy
alties, partnership profits and SOM
other sources of income, and person.
receiving such incomes must be pre-
pared to show that the money ha
paid its tax at Its source.
In figuring up his net income 70
the taxpayer, the American bushes
man. after deducting $4,000 for him
self, or $4,000, IL married, will hav
the right to claim the following add
tional exemptions:
Necessary expense Of carrying o.
business, not including personal, Twin
or family expenses.
Interest paid out of Indebtedness.
National, state. county, school o
municipal taxes paid within the yeal
Trade losses, or storm or fir
losses, not covered by insurance.
Worthless debts charged off dnrin
the year.
A reasonable allowance for the d.
probation of property.
Dividends from companies whose il
comes have already been taxed.