Great Falls daily tribune., 1920-01-09

last democratic congressional the heavy war
taxes of 1919, insofar 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 mate
rally cut next year.
When the present revenue law was before the
senate finance committee, after its passage Dy
the house, it became apparent the war was near
inp an end and the armistice was signed before
final action on the bill. The senate committee
at that time was in control Of the democrats. 1t
was proposed by republican members of the COM
mittee that the same schedule Of rates be made
to apply in 1920 as in 1919. The republicans said
adjustments for the year 1920 might be made
later.
Democratic members Of the committee finally
united and forced through a proviso that lower
taxes should go into effect at the beginning 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
partial lifting Of the burdens Of taxation.
If this action had not been taken, the higher
rates of the period Immediately following the
war would have extended into 1920 and cost the
two billion dollars additional. The senate voted
for grading down Of the war schedules and the
house accepted the proviso.
The notifications for 1920 are mainly Of as
sistance to the man with the modest income.
These notifications reduce by one-third the nor
NAL tax on incomes, but leave the surtaxes,
which apply to the wealthy, the same as hereto
fore. Even without further legislation, there
| fore, the average taxpayer will have substan-
tial reduction in his tax bill The tax to be col
lected on the first $4,000 above the exemption
will hereafter be only per cent, instead OF per
cent. It is estimated that IS per cent OF income
tax payers are subject only to the normal tax
the surtaxes applying to the smaller percentage
of big incomes.
There will be other reductions in the nation s
tax bill due to the insisence of democrats OF the
senate more than year ago that war burdens
be removed as rapidly as possible and that the
war revenue bill should include lower taxes fol
1920.
The New York Times makes the changes II
the federal tax laws for 1920 clear when 1t says
Income taxes payable during 1920 VIII De
lower than those paid in the year ending tomght
After the exemptions deducted per CEN
nominal tax is imposed upon the first S4,OOo
On any remaining income 8 per cent must bt
Maid. Last wear these normal taxes were ant
IL per cent, respectively.
Surtax rates will remain the same. These
surtaxes do not apply to incomes lower thar
$4,000 after the exemptions have been deducted
But for incomes above $4,000 after the deduction
of the exemptions they begin with per cent o.
S5, 900 to Sc 900 income, and increase by steps o.
per cent for each $4,000 Of net income up to Al
per cent, where the income is between S98,OO'
and 100000. After that the rates range from
50 per cent on incomes of more than S10OOOO t
65 per cent of incomes in excess Of 81 100000.
No change is made in the exemptions. The,
will remain the same. A single man may deduc
1000 from his income, before he makes an
computation, and a married man may deduc
$4,000. Besides, there is an additional exemp
tion of 5000 for each dependent under y yea
old
There will be change in the flat rate impose
upon the next income of corporations. The ia
to be paid on this income will be 10 per CEN
against IL per cent during 1919. Excess profit
taxes will also be changed. The two bracket
last year were 80 and 65 per cent, but for tn
next tax collectable they will be 20 and 40
The normal taxes and surtaxes, which tn
average married man, with one dependent, an
therefore entitled to $4,000 exemption VIII pa.
during 1920 compared with those which he ma
to pay for income received during 1913, follow
Tax to be Tax pa
: paid in 1920 in 80
exemption sagSG psr sl'saa cent YEAR 1919 1sl