The Washington herald., 1913-11-15
Capital Financiers Hear Re-
port on Intricacies Of
New Law.
SUGGESTIONS ARE MADE
Committee Points Out Features for
Consideration Of Treasury
Officials.

mittee appointed a month ago to study
and report on the income tax law.
The members wer4 not surprised that
the committee consj sting of NJ. D. Rosen-
berg, George E FHeming, and H. II. Nc
Kee, even after long study, admitted
that they approached the subject with
- hesitation. ana admitted. even when pre-
senting deductions, that "the language
is complex. and in many instances in
voIved and ambiguous
This is exactly what bankers and bust
ness men all oyer the country have been
complaining of, and even the men in the
Internal Revenue ONCE have frequently
admitted that they give it up"
This committee had the advice and
assistance of Charles ]. Bell, William d.
hoover, B. F. Saul, John Poole, Corcoran
Them, and w. D. Flather.
Work Is Praiseworthy.
One thing is certain. that the work of
this committee as evidenced by pam
phlet of fourteen pages, is the best COM
pendum on the income tax so far pro-
duced The report will be a text book
until Gomething better is produced.
The committee recommended that all
members Of the association, bankers,
banks, and trust companies, collecting
coupons, checks, bills of exchange, &c.
apply to the Internal Revenue Commis-
sioner for a license for collections Of
foreign items, as there is a penalty Of
$500 or Imprisonment for collection Of
these items by a nonlcensed bank or
trust company, or banker.
One of the questions that have been
most puZzling is settled in this para
graph: "In this connection il may be
noted that income derived by a corpora
ton from dividends on stock Of another
corporation is not exempt from taxation
This is double taxation for the corpora
ton has paid tax and the holding COM
pany also must pay, and there is no re-
lief as il seems to have been the inten-
ton of Congress to have both corpora
tions pay an income tax on net earnings
from which said dividends were paid"
Covering that part OF the income tax
law relating to the tax on incomes other
than interest on bonds, the report says:
1T would appear that two considera-
tions should determine the course to be
followed by members of this association
with respect TO that provision of the law.
!. Is the amount to be paid a fixed or
determinable gain, profit or income to the
payee? 2. Does tbs amount to be paid
exceed 5000 for any taxable year, The
normal tax OF l per cent will not be de-
Quoted by an Incorporated bank or trust
company. /. When the amount to be paid
Is a dividend on its capital stock. 2
When the amount to be paid is the in
terest on a deposit or certificate of de-
posIt. 3. When the amount to be paid is
a commission or a fee for a special
service rendered. and not an annual
salary. 4. When the amount to be paid is
less than 5000 for any taxable year.
5. When the amount TO be paid during
the months of November and December,
1918. is less than 5000. The normal tax
OF l per cent will be deducted by an in
corporated bank or trust company. !.
When the amount to be paid is a fixed
determinable annual gain. profit or in
come to the payee, and 2. When the
amount to be paid exceeds 5000 for any
taxable year. provided, however, that the
payee has not filed with the debtor a
certificate of exemption allowed under
paragraph c. section ?, of the law.
IF said certificate Of exemption be filed
with the debtor. then the normal tax OF
] per cent must be deducted from the
amount that the payment exceeds the ex-
emption claimed"
suggestions of Committee.
The following criticisms are made by
the committee in a spirit of helpfulness:
Regulations should be issued by the
Internal Revenue Bureau defining the
duties of banks. bankers, trust COM
panies. and individuals that act as trus-
tees for others.
Some of the items which might be
eliminated are as follows:
Il The duplication on the certificates
Of the names and addresses of the
claimants
80 The amount and denomination of
the bonds from which coupons are de-
tached. The tax is on the income, not on
the principal If it is desired to know
the amount of the bonds that infcrma-
tion can be obtained from the certificate.
as the description and the amount OF the
coupons are set forth therein.
''SS. The numbers of the bonds from
which the coupons are detached AS a
certificate in some form is required for
all coupons, the necessity for having the
numbers of the bonds set forth is doubt
full"
Many Questions Asked,
President Saul presided at the meeting.
The report was read by Chairman Rosen-
berg.
resolution was introduced by H. II.
Mckee embodying the criticisms, and
asking that the department see to it that
they are remedied and adopted.
questions were then pr0pounded by
members to the committee, and very
generally answered. Still the perpIexing
problems in certain sections was re-
sponsible for some tough propositions.
The greatest discussion was caused by
this problem. Husband and wife, both
having income, husband claiming an ex-
emption OF 1900 and paying a tax on
$500 in excess. Wife then presents a.
bunch of coupons, her personal property
Is she entitled to full pay or does the
normal tax have to be deducted by
banker, or If taken for collection at the
source?
One banker declared that the Internal
Revenue Bureau head ruled that husband
and wife had but one deduction of 81 900,
and that anything in excess of that
amount, IN joint income, would have to
pay normal tax.
H. H. Mckee, of the committee urged
that as every adult person was entitled
to 5000 exemption, the wife would NOT
have to pay unless income exceeded
1900. That the deduction was intended
to be one OF 1000 for husband and wife
living together.
A ruling on this point is requested by
the Internal Revenue Bureau, as it is
1ne that is always coming up
The concensus Of opinion at the meet
ing was that the law had been ably
explained in as far as possible by the
committee.
TRYMURIKE EYE REMEDVI
For Red, Weak, wstery Eyes and
aRAhUlA ATEn EYElIna