The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1917-11-08


cest of the invested capital for the
taxable year. (Note the words lin
vested capital for the taxable year,
for 1t was that phrase which set The
lawyers by the ears.)
% per cent of the amount of net in
come in excess. of Is per cent, and not
in excess of 20 per cent of such capt.
tai.
35 per cent of the amount of net in
come in excess of 20 per cent, and not
in excess of 25 per cent of such capital
As per cent of the amount of the net
In come in excess of IS per cent, and
not in excess of % per cent of such
capital.
| 60 per cent of the amount of net in
come in excess of 33 per cent of such
capital.
Deductions.
| Deductions allowed included Cd an
amount equal to the same percentage
of the invested capital for the taxable
year which the average amount of the
annual net income of the trade or
business during the pre-war period,
was of the invested capital for the
pre-war peIiod-but not less than Z
per cent or more than per cent of
the invested capital for the taxable
year-and ca $4,000, (The pre- war
period refers to the years 1911, 1912
and 1879.
In brief, a corporation is allowed in
addition to a flat exemption of $4,000,
an exemption of the same percentage
earned in war year on it's invested
1871. 1912 and 1913 on it's invested
capital then, proved that the amount
of exemption is not less than Z per
cent or more than 8 per cent of the
invested capital in the war year.
Invested Capital"
In the case of corporation the term
Invested capital is defined as %
Actual cash paid in, ca The actual
value of tangible property paid in 9TH
er than cash, 60 Paid in or earned
surplus and undivided profits used and
employed in the business exclusive of
undivided profits during the taxable
year.
The bill goes into the matter of
patents trade marks, good will, copy
rights, etc. and how their value shall
be determined, but there are so many
different angles and possible view
points to take in connection with them
and the subject of the Interpretation
of invested capital, that doubtless If
every lawyer who ever came out of
Philadelphia should express an opin-
ion there would be some points upon
which they all would disagree.
| So much for the bare outlines of the
Income and excess profits tax as they
apply to corporations. Now, let us
endeavor to fit the new taxes to an
Imaginary corporation in order to see
how they work out.
Method Of Figuring Excess Profits Ia,
Which Has Been Most Gen.
orally Accepted.
Pre- war
Period Year 1917
Capital stock ..$1O,0OO,OOO 100000
Net earrings -. 100000 100000,
% earned on cap. 1919 4O%
Deductions allowed .........$ 3O0t
1917 capital during taxable
| year ............ ......... 4,5O0,0o'
Total deductions ..,.......$ 4,503, 00C
Excess profits tax rate (a) 20% OF
the amount of the net income in ex-
cess of the deduction (see above) and
not in excess of 1910 per cent of the
invested capital for the taxable year.
Excess
Prof. tax
1879 of capital $7,5O0,0OO
Deductions allowed 4,503,00O
Taxable under (a) 2,997,999
Tax of 205 ... $780, 400 $599,40(
Rate CD 25% of the amount of net
income in excess of 1870 and not In
excess of 20%o of such capital.
l20% of capital $40 100000
1915 of capital 49,. 100000
Taxable under b 100000
00f
Rate (c) $50 of the amount of the
net income in excess of 20% per CEN
and not in excess of $50 of such cap
ital.
$50 of capital ....$12,500,00O
I20% of capital 80. 100000
Taxable under 2,500,0O0
Tax Of $50 -. $4,000 $S75,oo'
Rate (d) 45% of the amount of the
net income in excess Of 25% and moi
in excess of 1870 of such capital.
1870 of capital ..$16,50O,OO0
25%o of capital .. 12,500,0O0
! Taxable under
! (d) .... go. 100000
Tax of 45%.... 100000 $1,80O,00(