The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1917-10-18

5 200 to S 100000. Al
S 100000 to S 100000. As
I 5 100000 to S 100000. ...........5O
S 100000 to 5 100000 ...........54
S 100000 to $1,OO0,O00 ......,.......59
100000 to $1,5O0,OO0. IS
81, 500, 900 to 100000. Sc
100000 and over 81
Excess Profits Tax.
The excess profits tax will impress
every one who has to make return
under it as an example of barbaric
frightfulness. 1t is unlike any tax
ever imposed in any civilized country.
By next March all American asylums
will be full of people who lost their
minds trying to calculate what they
owed Uncle Sam under this terrible
tax. Lawsuits to determine its appli-.
cation will still be going when our
great grandchildren are dead and bur-
led.
Who Must Pay.
Every corporation with net in
come exceeding $4,000 and every part
nership or individual with net in
come derived from the operation of
any kind of business which exceeds
$4,000 for the present year is liable to
pay tax on the amount of it's excess
profits. This includes everybody that
buys or sells anything, all Kinds of
q ice inn Ind limo
commercial travellers, unless they are
on fixed salary without commissions
1t hits farmers, doctors, lawyers, store
keepers, authors, real estate men, con-
tractors, and. in fact, everybody that
works who is not on a fixed wage or
salary and has an income big enough
to come within the scope of the law.
What Are Excess Profits.
Excess profits as nov defined bear
practically no relation to the amount
earned before the war. If you want
your business, take the amount by
which it's net income for 1917 exceeds
s per cent on the capital invested, and
subtract $4,000 from this if you are OPP
Grating partnership or individual
business, and $4,000 if you are organ
lied as a corporation. For example,
suppose your capital is 100000 and
your net income is $4,000. Eight per
cent is $4,000, to which you add $4,000
for a corporation and $4,000 for an in
dividual or partnership, leaving the
excess profits $4,000 for corporation
and $4,000 for an individual or part
nership business.
If you want to know exactly, you
will have to do some real figuring.
Here's how you go about it:
First, determine the net income of
your business for each of the years
1911, 1912 and 1918, by subtracting
from the gross amount Of business
done in each of these years the proper
deductions for expenses, interest,
taxes and depreciation, substantially
as described for income taxes, except
that you can not deduct gifts and
charitable donations. Average these
and see what percentage they are OF
the actual capital invested in the busi-
ness during the same three years. If
they average less than 7 per cent, you
will be allowed the full per cent; but
| if they average more than per cent
YOU will be allowed only per cent
Only if they fall between, and 3 per
cent do you take the actual average.
For example with 100000 of actual
capital, if the average net income Is
$4,000. that would stand as 81 per cent,
but If the average was only $4,000 you
would be allowed per cent, while of
the average was $4,000 you would be
allowed only per cent. So you VIII
see that while you have to go through
all this rigmarole in making your re-
turn for all practical purposes you
might as we'll take an average of per
cent and let it go at that
After you have got this pre-War rate
of profit determined, you apply that
per centage to your present capltal,
add $4,000 to it for individual or part
nership business and $4,000 for a cor
poration, and subtract the result from
vour net income for the year 1917. This
gives you the amount of your excess
nrotits on which you will be taxed.
For professions and all kinds OF
business and trades in which only
nominal capital is employed, it is OBJ
vious that this plan can not apply. SO