The daily banner. (Cambridge, Md.) 1897-2008, 1919-03-05
How the Income Taxi
Effects Rich and Poor

! Niieti etSSSio bul ctludlly W ell
known in the United States-again
to pay their income taxes. John NJ.
Will forward to the Collector of In
ternal Revenue a check for S7O3.-
O30. His net income for 1918 was
S1,OOO,000. Smithkins will pass the
Collector $50. His net income was
$1,000. Both are eminently respec-
table married men.
This is an illustration of the in
come tax provisions of the new reve-
nue. bill. The income tax is no
longer rich mans tax" is a truth
full, but not a new, saying. Smith
k1ns, however, after contributing his
just quota to the Government, will
have left a considerably larger por-
tion of his income than Goldbonds.
The levy touches the pocketbook
OF every person of moderate means in
the United States, but is so gradu-
ated that the Goldbonds and the
Smlthkins each pay according to
their income. Last year there were
filed up to June 80, 2,319,929 re-
turns of income of less than $4,000.
The tax assessed on these incomes
was $22,395, 5,262.4O. The number of
returns filed of incomes of more than
$4,000 was 665, 5,523, the tax on which
was $592,613,241.12. Speaking for
themselves, these figures offer con-
vincing proof OF the equitable dis
tribution of the tax burden
The estimated revenue to be col
lected under the new revenue bill is
$6,000,000,000. Returns are requir-
ed on Or before March Is of every
single person whose net income was
1000 or more and of every married
person whose net income was $4,000
or more. The tax is assessed on net
| income in excess of these amounts.
In making out his income tax re-
| turn, John NJ. Goldbonds will de-
| duct first his personal exemption of
$4,000 allowed married man On
the first $4,000 of his remaining in
come of $99S,000 he will pay a nor
NAL tax of per cent, or $24O. On
his income in excess of his exemption
and first $4,000 of income, he will
pay a normal tax or - per cent, or
$119,380.
In addition he is required to pay
surtax beginning at 1 per cent. on
the amount of his income between
$4,000 and $4,000, and increasing by
steps of l per cent. fer each $4,000
of his income up to and including 4S
per cent. on net income in excess of
$98,000 and not over 100000. From
this point the rates are as follows:
81 per cent. of his net income in
excess of 100000 and not. over
LS150. 600; Sc per -cent.-on-net ineamea
in excess of $150,000. and not over
$500, 900; go pei cent. on net income
in excess of 100000 and not over
100000; 63 per cent. on net in
come in excess of 100000 and not
over 100000, and ga per cent. on
the amount of his net income be-
tween $5OO,0OO and s1,OOO,oOO.
John NJ. pays normal tax of S119
$40 and a surtax of $5S3,51O. Smith
kins doesn't have to bother about the
intricacies of the surtax which ap-
plies only to income in excess of$5,-
900. Deducting his, exemption of
$4,000, he pays c per cent. on $500.
1t is assumed that neither Smith
kins nor Goldbonds have dependents,
other than a wife. The new revenue
bill allows an additional exemption, of
5000 for each person dependent up
on the taxpayer for chief support, il
such person is under eighteen years
of age or incapable of self-support.
At their option Goldbonds and
Smithkins may pay their tax in full
at the time of filing their returns,o ,on
or before March 18th, or in four in
stallments, on or before March L 5th,
on or before June 18th, on or before
September 18th and on or before De-
cember 18th. The penalty for fail
ure to make a return on time is a
fine of not more than $1,000, and an
additional assessment of 25 per cent.
of the amount due. For 'willfully
refusing" to make a return the pen
atty is fine OF not more than $1O,-
900 or imprisonment for not more
| than one year, or both. A similar
penalty is provided for making
false or fraudulent return, together
with an added assessment of so per
cent. of the amount due.
The Commissioner of Internal
Revenue, Daniel G. Roper however, is
giving himself no uneasiness concern
ing the failure OF Goldbonds or Smith
| kins to file their return and pay the
tax on time.
! Experience has proved that the
great majority of the American peo-
pie pay their taxes cheerfully and
willingly" said Commissioner Roper.
"Of course, we have the delinquent
and to him, in justice to those who
fully comply with the law, no consld-
Grafton can be given. The Bureau
has at it's command innumerabie
sources of information that will dis
close tax liability. When the tax
dodger is discovered-as he will be
he will be made to pay the full
penalties of the law"
Forms for filing income tax re-
turns may be obtained at offices OF
Collectors of Internal Revenue. Tax
payers whose net income for 1918
was less than $4,000 should ask for
Form 1O4O-A. Those whose net in
cona MaS mora than S6 0Q0 ElOuld