Bisbee daily review., 1917-10-28

at a rate in excess of the rate in the pre-war period. The rates begin witf 20 per cent of the income in excess of the deduction allowed (see below and not in excess of 15 per cent on the invested capital for the taxable year 25 per cent of the net income in ex cess of Is per cent and not in excess , of 25 per cent, 45 per cent on excess of 25 per cent and not in excess ol B per cent, and SO per cent on ex cess of B per cent
 Ascertainment of Tax: From the earnings upon the invested capital during the taxable year there would be deducted an amount equal to the same percentage as the average earn ings upon the invested capital during the pre-war period (1911, 1912, 1913) but not more than per cent, with an additional allowance of $6,000 in the case of individuals or partnerships and $3,000 in the case of corporations. Nonresident aliens, foreign partner ships and foreign corporations would not be allowed the exemption of s6,00O and $3,000 respectively. Where a cor. poration partnership or individual was not engaged in business during any year of the pre-war period there would be deduction of per cent on invest ed capital for the taxable year plus sS. 900 or S6,00O, as the case might be. Where current income is less than 2 per cent there would be no tax. If the secretary of the treasury finds that business was not conducted dur ing the pre-war period or that the rate of average income was low as com pared with similar businesses, the in come of representative business of the kind might be taken as a basis for assessing taxes.
 Net income in 1911 and 1912 would be ascertained according to the cor. poration tax law of 1909 and for 1913 according to the income taxes paid during the year and deducting amount received as dividends from other cor porations. Net incomes for the tax able year would be ascertained accord ing to the law of September, 1916. h. vested capital for the purposes of the tax would not include stocks or bonds, except obligations of the United States. nor money or other property borrowed. In the case of corporation it would include actual cash paid in, cash value of tangibles represented by shares of stock-if acquired prior to January l 1914, then as of their value at that date-but not to exceed par value, and surplus and undivided prof its used or employed in the business except those earned during the tax able year. Patents and copyrights paid for in stock might be included as invested capital, but not at figure to exceed their par value at the time of brands, franchises and other tangibles might be included if paid for in cash, at an amount not greater than the sum paid for them originally. When oSA0AAN0 AOl NO 4J1f represented by stock they might not represent more than 20 per cent of the invested capital. In the case of an individual invested capital would rep resent actual cash paid in. actual cash value of tangible property other than cash, cash value of patents. copyrights. good will, etc. as of the time ac- quired.
 If a business existent during the pre- war period has since been reorgan- ized, but is substantially a continual tion, it will use for arriving at deduc. tions the pre-war apital and earnings of the former business. In cases of reorganization, consolidation or Of changes of ownership since March 3, 1917. involving a transfer of less than 50 per cent of ownership it would be forbidden to transfer assets at value greater than would be allowed under the definitions in this title. except when actually paid for in cash. A business with no invested capital, or NANh NdPibdls nOulu pay O per cent of current earnings after a deduction of s3OOO if a domestic cor poration and s6O0O if a citizen, resi- dent or domestic partnership.
 The tax on manufacturers of mu- nitions as defined in section 3O1 of of act of September 8, 1916, would be reduced to 10 per cent. The 10 per cent tax would cease to be effective after January 1, 1918. The excess profits tax of March 3, 1917, is re- pealed.
 Porto Rico and Philippines.
 The provisions of the bill regarding income tax do not apply to Porto Rico or the Philippines but the legislatures of these islands are authorized to deal with their income tax laws.
 Beverages.
 Effective upon the enactment of the
 bill the following taxes are provided, additional as to articles already taxed: -on distilled spirits held in bond or by retailers in exces of 50 gallons, $1 10 per gallon-s2.10 if used for beverage purposes or in the manufacture of ar ticles intended for beverage purposes.