South Bend news-times. (South Bend, Ind.) 1913-1938, 1920-01-02
NEW RATES WILL
SAVE TWO BILLION
Democratic PrOviSO Lowers
Income Tax Despite
6. o. P. Delay.

Special 20 The News T lines
WASHINGTON. Jan. Although
congress has shown q Discrimination
20 take up revenue legislation ia the
near future. as urged by Prest VIII
son. there will soon be reduction.
nevertheless. i'm the amount Of fed
sral taxes paid by the person Of av-
erege income With the arrival OF
the year 1920 lower schedules will
become effective because Of spe-
ctfic proviso in the current law
passed by the last democratic con-
gress-that the heavy war taxes Of
1919. insofar as they relate 20 the
man OF moderate income. shal not
be applied in 1920 In consequence.
The income tax bill OF probably IS
per cent OF federal taxpayers will be
materially cut next year.
when the present revenue law
was before the senate finance com
mittee. after it passage by the
house. IL became apparent the war
was nearing an end and the armis-
tice was signed before final action
on the bill. The senate committee
at that time was In control of the
democrats. Il was proposed by re-
publican members of the committee
that the same schedule Of rates be
made 20 apply in 1920 as in 1919.
The republicans said adjustments
FOR the year 1890 might be made
later.
Democratic members Of the com
mittec finally united and forced
through a proviso that lower taxes
should go into effect at the begin
ming of 1920. They insisted that
congress should settle the question
for at least two years and give the
taxpayer the benefit Of the end of
the war and a partial lifting OF the
burdens Of taxation.
Two Billions Saved.
If this action had not been taken
the higher rates Of the period imme-
diately following the war would
have extended into 1920 and cost the
taZpaycrs OF the United States APP
prOximately two billion dollars addi-
tional. The senate voted for a grad
ing down Of the war schedules and
The house accepted the proviso
The notifications for 1920 are
mainly OF assistance 20 the man with
the modest income. These modifi
cations reduce by one third the nor
NAL tax on incomes. but leave the
surfaces. which apply TO tho wealthy
the same as heretofore. Even with
out further legislation, therefore
the average taxpayer VIII have a
substantial reduction in his tax bill
The tax 20 be collected on the first
$4,000 above the Exemption viii
hereafter be only four per cent in
stead OF six per cent. II is estimated
that IS per cent OF income tax pay
ers are subject only 20 the normal
tax: the surfaces applying To the
smaller percentage OF bic incomes
There VIII be other reductions in
the nations tax bill due TO the in
sistence OF democrats Of the senate
more than a year a go that war bur
dens be removed as rapidly as pos
sible and that the war revenue bill
should include lower taxes for 1920.
Already there has been put into
effect the reduction IN the war taz
on first class postage This war tax
which amounts 20 one cent on each
letter. was lifted last July and the
twO-cent stamp restored
With the present congress mat
tentive to "a number of reconstruc-
zion measures. the wisdom OF the
democratic leaders in demanding q
settlement OF the tax question for
1920 Is now demonstrated Withou;
specific provision ia the war revenue
oirl for a lowering OF the tax rates
OH Jan. I. 1920. the rates for the
present year would remain in effect
since there has been no move in the
SiXty-siXth congress TO take up rev.
enue legisIations.
Various revenue proposals have
been made, including the repeal OF
the luxury taxes. but with the sen
ate absorbed I'm a siX-monthS debate
on the peace treaty and the leaders
OF the two houses holding divergent
views regarding such matters as
revenue and the tariff. nothing has
been accomplished.