Putnam patriot., 1913-04-18
NEW INCOME TAX
 STARTS AT $4,000
Elaborate Provision for Gradu- ,ated Payment System in
 New Tariff Bill.

| Democratic tdr1n revision Dlll iB dn income tax section, which would re- quire every resident of the United States who earns more than 1000 year to pay B tax of l per cent. on his earnings in excess of the exemp- tion. This would not compel the man who earns only s4,000 to pay tax, but it would demand that one who earned $4.10o, for example, pay into the government treasury an annual tax of 1 per cent. on s100, or s1. The bill also would provide higher rates of taxation for persons with larger incomes, adding surtax of 1 per cent additional on earnings In ex- cess of S20,000; 2 per cent. additional on earnings in excess of S50,000, and per cent. additional on earnings in ex- cess of S100,000
 How Surtax Would Be Imposed. Under the surtax provisions the man who earns $20,000 would pay to the government each year at the rate of 1 per cent on $16, 900 (s4.000 exempt). or S160. If he earns $30,000 he would pay l per cent on $16,000, and 2 per cent. on $10,000, making his annual tax $S60 The person with s50,000 income would pay 1 per cent. on s16.- 900 and per cent on $30 ,000-a total tax of $760. The man with an income of $1e0, 900 would be required to pay 1 per cent. on $16,000, ? per cent. ron f3e,000, and 8 per cent. on s50,000. which would be s$1.500, bringing his total income tax to $2,260. Anyone with sa net income of a million would pay this $2,260 on his first S1OO, 900 and in addition he would pay 1 per cent on $90000 which would bring his total tax to s3s.26o.
 This bill also would re-enact the present corporation tax law, imposing 1 per cent. tax on the earnings of corporations, stock companies, insur- ance companies and the like, but 1t would exempt partnerships. This Is hat tax, there being no graduated scale as the earnings increase. The few changes from the present conpo- ration tax act, concern chiefly the time of making returns and the time for collection.
 The bill includes under its provi- SFOHs t0t pfOpeily dnN III luik country of persons who live abroad.
 May Bring In s1oo,ooo,oOo.
 It is estimated by members of the ways and means committee that ap- proximately s100,000,000 in revenue may be derived from this new tax, in- cluding the corporation tax, that amount making up for the deficit in revenues to be derived from imports by virtue of the greatly reduced tarif and the transfer to the free list of articles that are classed as neeessa- ries of living
 Incomes of taxable persons shall include gains. profits and income de- rived from salaries wages or com pensation for personal service of whatever kind and in whatever form paid, or from professions, vacations, business trade, commerce or sales or dealings in property, also from inter est rent, dividends, securities, inelud- ing income from property, income from but not the value of property acquired by bequest, devise or de- scent, and also proceeds of life insur- ance policies paid upon death of per sons insured.
 Provision Made for Deductions.
 The bill allows as deductions in computing net income all necessary expenses actually incurred in carrying on any business. not including per sonal living or family expenses, inter- est accrued and payable within the year by a taxable person on indebted ness; all national, state, county, school and municipal taxes, not in- .cluding local benefit taxes; losses !u- cured in trade or from fires. storms or shipwreck not compensated by in- surance or otherwise; debts actually ascertained as worthless and charged of: also reasonable allowance for wear and tear on property; but no de- duction will be allowed for expense of restoration or improvements made to increase property value.
 It excepts also, in computing net in- come, amounts received as dividends upon the stock of any corporation, joint stock company. association or insurance company which is taxable upon It's net Income under the cor> poration tax provision of the bill.
 The bill excludes the compensation of the president of the United States during his term. that of judges of the Supreme and inferior courts of the United States, and compensation of all officers and employees of state or any political subdivision thereof.
 System of Collection Framed.
 It estab ablishes a system of collection of the tax at its source. requiring all persons. firms, copartnerships, com