Evening star., 1921-11-26
2,y,NcOME TAX CLAUSE
JAILED AS BENEFIT
i Exemption of $500 Derived
From Building and Loan
Dividends Discussed.
ADDS TO INVESTMENTS
c. Clinton James Foresees Greater
Business Volume Due to the
Enactment.

Attention of local building and
loan associations is being directed to
the provision contained in the new
income tax bill which exempts the
first $500 income derived from divi-
dends in building and loan associa-
ton from the income tax. The pro-
vision is being pointed out by c..
Clinton James. president of the
Building and Loan Association Coun-
Gil of the District of Columbia.
The exemption clause means that
an investing membeT of a building
and loan association can invest be-
tween $4,000 and $4,000 in building
and loan stock and will not have to
pay income taxes on that amount
The provision of law reads as fol-
lows: so much of the amount re-
ceived by an individual as dividends
or interest from domestic building
and loan associations, organized and
operated exclusively for the mutual
benefit of their members, as does not
exceed $500"
Purpose Is Explained.
The purpose of this amendment to
the new income tax bill is to en-
courage greater investments in the
shares of local building and loan So
cleties in the country, in order that
these institutions may be enabled to
more adequately meet the demands
made upon them bX members desir-
ing to build or purchase dwelling
houses, and thus. while promoting
systematic thrift, to relieve the
hardships caused by the housing
scarcity, and stimulate the greater
employment of labor in the building
industries
The chief and fttest agencies that
exist for financing small house con-
struction and purchase are the do
mestic building and loan associations
of the country Mr.. James states.
There are nine thousand of them
and they are scattered from coast
TO coast. the aggregate membership
exceeds five million men. women and
children. almost invariably persons of
small or moderate means. They deal
exclusively with the small home
seeker. who is most affected by the
housing scarcity. The United States
League reports collected from every
section of the country, show that the
loans made to homeseekers last year
by these institutions aggregated
more than $500. 100000. The reports
are invariable at the present time.
showing that the associations, for
lack of adequate loaning funds, are
obliged to disappoint thousands of
families seeking ownership of their
homes through this system of self
help.
Not Likely to Reduce Revenues.
This exemption is not likely to re-
duce public revenues to any appre-
7ciable extent, but even if such was
rhe case the law would justify itself
for the reasons stated. Loss of reve-
nue. is by no means to be assumed
Rich spectators cannot profit by the
exemption. since not more than $500
income during any one year is af-
fected. On the other hand it is quite
possible that it will produce a con-
siderable increase of investments in
building and loan societies, and the
indirect effect would be an increase
OF public revenue. municipal. state
and national. through the greater
stimulation of the building industries
throughout the country.
This stimulation will be felt by
manufacturers of all sorts of mate