The Evening Missourian. [volume] (Columbia, Mo.) 1917-1920, 1918-01-22
INCOME TAX TACKS

The income tax mvoIves many
| fine questions and men are now en-
tering the new profession of "ta,
| advisers" If a man is single an,
receives less than $4,000, or if h
is married and receives not more thai
$4,000 or $1,000 the income tax is no
very complex.
But if he is paying aIimony, the
| law will not allow him to list il as
necessary expense" And the wom-
an receiving the alimony does not
pay taxes on it because it is classed
as a gift
Income represents gains or addi-
moneys received in return for, or in
exchange for. wealth already owned
in different form. If a man re-
ceiyes 500 in payment of note
which he has held as security for
money loaned. such payment is not
income; he was worth the value of
the note before receiving payment
But if he receives s6 extra as inter-
est on the S100 loan the Sc is income
because it is what his investment
earned for him.
Corporations pay per cent upon
their entire net income regardless of
amount of such income; of this 4 per
cent is war tax and 2 per cent ordi-
nary tax. Corporations organized in
this country are taxed upon their in
come received from all sources. Cor
porations organized in foreign coun-
tries, but doing business in this
country are taxed upon the net in
come received from sources in this
country.
Income tax is assessed on the
basis of sworn statement of income,
known as a return, made by all cor
porations and by individuals receiv-
ing a net income that makes them
liable to income tax.
William KixMiller and Arnold
Baar, both of whom hold Phi. B. and
J. ID. degrees, have written a 1917
War Tax Guide" which contains and
interprets the federal laws covering
the income tax, stamp tax, profits
tax. business tax, estate tax and cor
poratiOn tax. They describe their
book as being "Codified, Indexed, Ex-
planned and Illustrated"
The return is made according to
the status of the taxpayer December
81, 1917. If a man was married De-
cember 80, he is a head of a family, !
and is entitled to exemption from in
come tax if he received less than
$4,000 net income during 1917.
According to single judgment of |
the United States Supreme Court, |
over forty years ago, and |
It WIS a divided judgment, THE Fed |
eral Government has no right under |
the Constitution to tax any employe |
Df a sovereign state or political sub |
division thereof" Therefore all state
employees from governor down to any
)ne who draws salary from a city, |
.ownship or village is exempt from |
he income tax
County employees, city policemen,
state tax collectors, public school
eachers and others are exempt from
.axation upon the salary received
rom the state or political subdi-
'isions, but are taxed upon incomes
received from other sources, accord
ng to the interpretations of KixMiller
md Baar.
The value of gifts and bequests
re not included in the income of in
but the income from such
gifts or bequests are included. If a
nan inherits farm he does not pay
ncome tax on the value of the farm,
ut any rent or other income received
rom that farm is subject to the tax.
a corporation pays the salary of a
nan. who was killed in its plant, to
lis widow, such salary is considered
gift and does not constitute income.