The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-07
'KlTCHIN PENALTIES
AND THEORIES GO
Revenue Measure Substan-
tally Taxes as Adopted
by Senate.
SUPER LEvIES APPROVED
Income Rates Set Along Scien-
tific Lines--HOuse Plan
Discarded.
SUPER LEvIES APPROVED
Special Eespofcb 10 THE SrS


WARRINGTON, Feb. 6.-The income
the corporation income taxes and war
excess profits taxes of the revenue bill
as 1t came from conference are sub
stantially the taxes adopted by the SEN
ate after throwing overheard many
theories and penalizing taxes written
into the measure at the dictation Of
Chairman Kitchin IN. c. of the House
Ways and Means Committee
In the individual income taxes and
supertaxes the rates adopted by the
Senate were untouched by the con-
ferees. The tax in the bill as It now
stands provides for a IL per cent. tax
| on net income for the calendar year
! 1918. with the provision that the rate
shall be per cent. on the first $4,000
| taxable income For succeeding years
the tax rate is fixed at S per cent OF
the net income. with the provision that
, upon the first $4,000 OF taxable income
the rate shall be 4 per cent. In the
House bill the rate was a fiat IL per
cent. with the 6 per cent. tax on the
| smaller incomes. but it would apply at
| that rate until the revenue bill is re-
pealed Or succeeded by another law.
Scientific Rates Made.
The entire schedule of surtaxes or
supertaxes on individual incomes drawn
UP BY the Ways and Means Committee
and approved by the House was thrown
out OF the bill by the conferees and the
Senate's more scientific rates suhsti-
tuted. The conferees made no changes
in the Senate schedules OF surtaxes on
| individual incomes. In the bill COM
pleted by the conferees this tax starts
at per cent. OF the amount by which
the net income exceeds 5000 and does
not exceed $4,000.
ON the amount OF net income between
$4,000 and $4,000 the tax In 2 per cent.
on the amount between $4,000 and slO.-
900 the rate is per cert and increased
| 600 the rate is per cent. and Increase
net income up to 100000.
Surtax rate on portions of net incomes
OF individuals exceeding 100000 and
not in excess OF fl50.000 Is fixed at So
per cent &: exceeding sl50.O0O and not
! exceeding 100000 the rate Is So per
cent: exceeding 100000 and not ex-
| ceeding 100000 the rate is so per cent ;
exceeding $500 900 and not exceeding
100000 the rate is 50 per cent ex-
ceeding 100000 and not exceeding
I.0oo.00o the rate Is 81 per cent. and
! on portions OF net incomes of individuals
In excess Of 100000 the rate is 65
per cent.
Another Senate amendment retained
In the bill is that providing for the
abatement Of the tax in the case Of
! bona fde sales OF oil or gas wells. mines
or any interest in them. This amend
ment provides that taxes imposed upon
income derived from such sources
where the principal value Of the prop
erty has been demonstrated by prospect
Ing or exploration and discovery work
1 done by the taxpayer shall not exceed
20 per cent Of the selling price OF the
property.
Federal Salary Tax.
The conferees put back into the bill
/ the House provision for specifically in
Guiding as liable TO the income tax
/ and surfaces the salaries of the Presi-
dent, the entire Judiciary OF the United
States and officers and employees oe
the United States and Of Territories and
| possessions The Senate members Of
| the Conference Committee, however. In
| sisted on striking from the bill the
! provision that the salaries and emolu-
! ments OF State Judges, officials and en-
| ployees should be specifically included
| az subject to the income tax and the
surlsNeS MS was done because the
Senate confe-ees insisted that this pro-
| vision WIS unconstitutional and that il
| would be ridiculous to include 1t in law.
Agreement was effected on the Senate
amendment striking from the bill the
! unconstitutional provision that income
from State, county and municipal bonds
| issued subsequent TO the passage Of the
revenue bill should be subject to the
Fedora! taxes imposed by the bill. An
| amendment was added by the conferees.
| however. that every person deriving in
come from such obligations should
! include an accounting OF the amount
held and that amount OF income derived
! from them in such form as the Com
missioner of Internal Revenue may de-
! termine.
Deductions permitted from gross in
dividual income in determining net in
come. upon which the income taxes and
supertaXes are levied. with the exception
thus stated, are practically as drawn by
the Ways and Means Committee and
approved by the House. The exception
| from the income tax and from the super
taxes for the war period extended to per-
sons in the military and naval service
of the country was allowed to remain in
the bill. The Senate amendment limit
ing the exemption to income received
from the Government during the war
period was retained by the conferees and
the House provision limiting this eX-
emption to taxes on amounts up TO $3.-
| 500, stricken out by the Senate, was re-
stored in conference.
Gross Income Deductions.