The Leon reporter. (Leon, Iowa) 1887-1930, 1920-01-08
DEMOCRATIC PROVISO LOWERS
INCOME TAX.
New Rates Effective in 1920 Will
Save People Two Billions.

Washington d. C.-Although
Congress has shown a disincilnatlon
to take up revenue legislation in
the near future. as urge sao by h ha =
reduction, nevertheless, in the
amount OF federal taxes paid by the
person of average income: With
the arrival of the year 1920 lower
schedules will become effective be-
cause of a specific proviso, in the
current law-passed by the the last Ht
heavy war taxes of 1919, in SO far as
they relate to the man of moderate
income, shall 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 its passage BY BY the the
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. 1t was proposed by Re-
publican members OF the committee
that the same schedule of rates be
The Republicans said ad justments
for the year 1920 might be made
later.
Democratic members Of the. COM
mittee finally united and forced
through 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
the war and a partial lifting of the
burdens of taxation.
If this action had not been taken
the higher rates of the period i'm
mediately following the war would
have extended into 1920 and cost
the taxpayers approximately two bill
schedules and the House accepted
the proyiso.
The notifications for 1920 are
mainly of assistance to the man
cations reduce by one-third the
normal tax on incomes but leave the
,n which apply b to the
Even without further legislation,
therefore. the average taxpayer will
| have a substantial reduction in his
tax bill The tax to be collected on
the first $4,000 above the eXemp-
ton will hereafter be only four per
cent instead OF SIX per cent. 1t is
estimated that seventy-five per cent
Of income tax payers are subject
to the normal tax; the surtaXes ap-
plying to the smaller per centage of
big incomes.
There will be other reductions in
the nations tax bill due to the in
sistence of Democrats of the Senate
more than a year ago that war bur-
dens be removed as rapidly as pos
sible and that the war revenue bill
! Already there has been put into
on first-class postage. This war
tax. which amounts to one cent on
each letter, was lifted last July and
the tWo-cent stamp restored.
| With the present Congress mat
! tentive to number of reconstruct
ton measures, the wisdom of the
| Democratic leaders in demanding a
settlement of the tax question for
| 1920 is now demonstrated. With
out specific provision in the war
revenue bill for lowering of the
tax rates on January ], 1920. the
lates for the present year would re-
main in effect since there has been
no move in the Sixty-sixth Congress
| to take up revenue legislation.
Various revenue proposals have
been made including the repeal of
the luxury taxes, but with the Sen
ate absorbed in 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.