Arizona republican., 1917-10-20

ItNtiut ll4i. IiioilN otNAAOiio OA W iAAOAA soO into effect in q few days. In order to give intelligent information about this all-important measure, The Republican has secured the following digest of the lengthy bill, through the courtesy of Congressman Carl Hayden:
 Individual Income Tax Normal Tax: The normal tax of per cent is doubled for citizens and residents of the United States and as to the additional per cent the per sonaI exemptions are $2000 and 5000 respectively for single and married persons with $200 additional exemption for each dependent child; this. eXemp- tion on account of dependent children is also allowed in connection with the exemptions of S3000 and S4000 for the existing normal tax. Returns of net in come are required of single persons who have Sl00O and married persons who have 5000.
 Additional Taxes: SurtaXeS addi tional to those already in existence, be- gin with 1 per cent on net incomes be- tween $5000 and s7500, increase by i per cent by steps fixed in existing law 10 3 per cent on $15,000- $20,000. by per cent from S20,000- s60 900, by per cent from $60,000 to S150000, are 25 per cert on Sl50.000- -$200,00 30 per cent on $2O0. 0.OO0-s -s25O,O0O 34 per cent on S25O000 to $30O,000, 37 per cent on $500 900 to $500 000, 40 per cent on $500. .OOO- -$75O.O00, A per cent on $780, 00O-$l .O0o.O0O, and 5o per cent on net income in excess of 1000 900.
 information at Source: For tie with holding at source now in effect infor mation at source will be substituted after January l, 1918, except as to in- come of nonresident aliens, and from bonds containing taX-free covenants. Returns would be required from all persons, firms and corporations mak- ing payment to another person or cor poration of any fixed or determinable gains, profits or income,-except divl- dends and receipts through brokers doing business on an eXchange,-of $500 or more a year. Returns are to be made of the fact of payment, giving name and address of recipient. Cor porations are to give information re- gardng all payment of dividends. Brokers doing business on exchanges are to give information regarding plO.- its and losses of customers.
 Alterations In Law: Changes made in the present law under which indl- Vidual income tax is collected include: nonresident aliens are not allowed personal exemptions from tax divi- dends received from earnings made be- fore March l, 1913, would not be taxed, provided distribution of dividends earned since March l, 1913, has been made. Dividends paid in 1917 or sub sequent years would be considered in come for the year in which received; they are to be deemed paid from the most recently accumulated surplus and taxed to the distributee at the rates in force for the years when accumulated. Interest and excess profits taxes and the interest upon money borrowed to invest in tax-free securities may nUt be deducted from net income, but in assessing income tax net income might be credited with war profits taxes as seSsed in the same calendar year. If partnership uses fiscal year differ ent from the year before and after January l, 1917, and the parts subjected to taxes at the rate of the different years. Gifts made within the year to charitable institutions might be de- ducted from net income ii not in eX- cess of Is per cent thereof, under regu . lations by the commissioner of in ternal revenue.
 Corporation Income Tax
 A new tax of per cent is imposed upon the net income of corporations making the combined existing and new taxes equal 6 per cent.
 Surplus Tax: Moreover a tax of 1( per cent is imposed upon the net in come which remains undistributed al the end of months after the calendar or fiscal year. with exemption how ever, for any amount actually invested and employed in the business or in vested in obligations of the U S is sued after September l, 1917. If tht secretary of the treasury found that al amount kept was not so employed ol was not reasonably necessary for the business, the tax would be 15 per cent
 Alterations In Law: Changes pro. posed in the law include: Income ma. be credited with dividends of othe taxable corporations, stock dividend received are to be considered incom al their cash value; dividends received from earnings made during 1917 an, subsequent years would be taxable d the rate in effect in the year whel earned. Dividends or surplus accrue prior to March l, 1913, would not b subject to tax under the bill and mgh be distributed without tax after dis tribution of profits accrued sine March l, 1913, has been made; incom taxes aud war profits taxes paid in tn year. and interest on indebtedness in cured to purchase taX-free obligation. may not be deducted; before the in come tax is computed War-profits taxe assessed for the same year may | deducted from the net income: incom of foreign governments and interest 0 their deposits in banks in U. S. is eH empt from taxation.
 All of the taxes mentioned above aI ply first to the calendar year of 1917
 War Profits Tax
 Graduated taxes are levied upon cui rent net profits obtained by individual partnerships, and corporations at
 rate in excess of the rate in the prt war period. The rates begin with per cent of the income in excess of u deduction allowed tsee below) and n, lin excess of 15 per cent on the investt capital for the taxable year. 25 per eel oI tne net income III excess of 15 p; cent and not in excess of 25 per cen .3 Der ceni on extras nf 20 per eel and not in excess of 25 per cent,
 pcI cent Ii exec ss CT -J pel cent al not in excess of p per cent, and 50 D cent on exces sof B per cent.
 Ascertainment of Tax: From tl earnings upon the invested capital du ing the taxable year there would
 deducted an amount equal to the sar percentage as the average earnin upon the invested capital during t pre-war period (1911, 1912, 1913,) not more than 9 per cent, with an a ditional allowance of 5000 in the ca of individuals or partnerships a
 5000 in the case of corporations. No resident aliens foreign partnerShi