The daily banner. (Cambridge, Md.) 1897-2008, 1919-02-25

= net income of single persons in eX-
cess of $4,000 and per cent on the
net income CT married persons and
heads OF families in excess of 1000.
/ Taxpayers whose net income exceed
ed the amount of the exemptions pro
vided for by the Act Of 1916 were
taxed under both the 1916 and 1917
/ Acts.
4 This year the taxpayer has only
one Act TO consider. The normal
rate of tax under the new Act is 6
per cent. on the first $4,000 of net
income above the exemptions, and
II per cent. on the remaining net
income. This applies to citizens and
residents of the United States. In
leone from property in the United
States owned by nonresident aliens
is subject to the full normal tax of
II per cent. For 1919 and subse-
quent years the rates are fixed at
| and 8 per cent. respectively. The
surtaX rates have been changed,
ranging from l per cent. of the
amount of the next income between
$4,000 and $4,000 to IS per cent of
the amount by which the next income
exceeds $1,000,OO0.
| The single man with net income
for 1918 of $4,000 will pay this year
a tax of $50, the man with an income
of $4,000 will pay S12O, the $4,000
man will pay $3.50, and the $4,000
man will pay$240, all at the rate of
6 per cent. on his net income above
his personal exemption of $1,000.
! The single man with an income for
! 1918 of $4,000 will pay $3.50. He is
| taxed at the rate of per cent. on
his first $4,000 above the exemption
and at II per cent. on the remaining
$1,000, a total of $3.50. In addi-
| ton he pays a surtax of $40, one per
cent. of the amount of his income be-
tween $4,000 and $4,000.
The married man will pay $50, on
net income of $4,000 in excess of
his personal exemption, $50 ON a
$4,000 income, S12O on a $4,000 in
come, $3.50 on $4,000 income, and
$3.50 on a $4,000 income, which in
cludes his surtax of $40.
These figures are based on the
income of taxpayers without Deepen
dent, other than husband or wife
The taxpayer is allowed, ia addition
to his personal exemption. 5000 fer
each person dependent upon him Cor
CHIEF support, if such person is I'M
der eighteen years of age, or incapa-
BILE of self-support. Under the 1917
act the 5000 exemption was allowed
only for each dependent child of the
person making the return, Or, in the
case of a head of a family, for each
dependent child of the family. A
head of a family-one who supports
one or more persons closely connec-
ted with him by blood relationship,
h1lat1o nship by marriage, or by adop
bis return the taxpayer is res
CURED to state specifically each item
of gross income Gross income is
defined as gains, profits and income
derived from salaries, wages or COM
pensation for personal service or
whatever kind and in whatever form
paid, or from professions, vocations,
trade, business, commerce, or sales
or dealings in property, whether
real or personal, growing out of the
ownership or use of such property;
also from interest. rent, divldents,
securities, or the transaction of any
business carried on for gain or prof
it, or gains or profits. and income
derived from any source whatever"
Net income, upon which the tax
is assessed, is gross income less GER
tain deductions which are more lib
eral than under the preceding act.
They include the following items:
Expenses paid or incurred during
the taxable year in carrying on any
trade or business, including rentals
and a reasonable allowance for sal
aries.
Interest paid or accrued during
the year 1918 except on Indebtedness
incurred for the purchase of tax-ex-
empt securities, other than obliga-
lions issued by the United States at