The Washington herald., 1921-02-01
INCOME REPORT
SHOWS SUCCESS
COMES TO MANY
1918 Tax Returns Give
Galn of Over Two Billion
In Earning Power.
TAX PAY VARIES
Higher Returns Decrease as
The Lower Indicate Strik-
ing Gains of Masses.

ing Gains of Masses.
In an. address delivered before the
Monday Lunch Club here yesterday,
Edward White, head of the statisti-
cal division of the Income Tax Unit.
IN discussing income distribution in
the United States for the year 1918
and the functions of the statistical
division OF the Income Tax Unit,
said in part:
That success has come to many
IS shown by the number Of returns
Med and the amount of income re-
ported for the calendar year 1918.
There were 4,425,114 individuals in
that year who filed returns report
ing an aggregate net income of $16,-
VVO,OOO,O0O, the Income tax on which
was $l,127,721,S35. These figures
register a growth above 1917 of
nearly 100000 returns and ap-
proNimately $2,273, ,OOO,O in net in
come. as well as an increase OF ap-
proXimately s437, 900 in tax paid
the government.
1T is Of interest to note at this
point that l per cent OF the total
number of personal returns filed,
representing $4,000 people with in
comes in excess of $25. 900 reported
II per cent of the total personal
net income and paid 66 per cent OF
the total personal tax, whereas 80
per cent of the returns, represent
ing incomes under S25.0OO reported
N3 per cent Of the total net income
and paid "a per cent of the tax.
The sources from which this
great aggregate of individual in
come flowed show that salaries and
wages produced nearly half, that is,
$s.5OO.OOO,O0O, and that business is
credited with slightly over 25 per
cent or S4,6OO.OOO.OOO. These two
sources representing incomes from
personal endeavor contributed near
ly thrce-fOurths of the total amount
Of income reported, that is, an ag-
EreEate slightly under $4,000 OOO.-
NnO
Incomes from Farms
The question has frequently been
asked as to the number of returns
filed by persons engaged in agrf-
culture and is related industries
Ii might be interesting. therefore
10 note that Of the 95S.OOO people
who reported incomes from business
pursuits 80 per cent. or $4,000 were
engaged in that business, and re-
ported ne income amounting to 81
$4,000. 900.
"A striking feature is the yaria-
tion in the number Of returns and
7 ct income from year to year. BY
comparing 1918 with 1917. it will
he seen that. whereas there was
slight decrease in the number OF
returns filed by individuals having
incomes between $1,000 and $1,000,
there was very large increa Sc
in the intervening income classes.
reporting incomes up to SIS, 900. from
which point on through the higher
income classes a steady deCreasr is
recorded. There were in 1918 6,457
fewer persons who reported incomes
in excess Of S25.OOO than there were
in 1917. OF these the class re-
porting incomes of 100000 and
over lost seventy-fOur. the number
reporting incomes between $500, 900
and 100000 decreased by 1877; be-
tween 100000 and $500 900. the de-
crease was III; between S15O.OOO and
5000. 900. II was S33; and between
800. 900 ana S15O,OOO. tho reduction
was a44
"CorreIating the decrease in the
number Of persons reporting in the
HIGHER income classes. between 1917
and 1917 with the sources or ma
fu-c Of the income reported. it is
seen that those with net incomes
Of 100000 and over show a decrease
Of 2.165. and an aggregate decrease
in income of S52l.0OO.OOO. Of whi~h
approximately S41O.OOO.OOO. or 70 PEI
cent. was due to a falling off in
i'm .uFy
decreased by S65O.OOO,OOO. or Il per
cent: and rents and royalties fell of
nv s1l.OOo,OOO. or per cent Sal
aries. fees commissions. etc. show
Cd A net reduction OF $4,000. 900.
y hereas business, partnerships am
nrofts from incidental sales OF Sc
curities and real estate increased
nv 100000.
Smaller Incomes Grow.
In the income classes from $50
600 upward the falling off in divf-
dcnds between the two years was
s559.OOO. 900. whereas in the classes
between $1,000 and $4,000 there was
an increase from this source Of
sl3G. 100000 On the other hand
whereas interest on investments re-
ported by persons having incomes in
excess of 100000 fell off by $4,000
600, such income in the class be-
tween $1,000 and 100000 increased
bv S4O6 100000
The total number of corporations
that filed returns in 1918 was ap-
Droximately $4,000. These do not
include personal service corpora
tions, OF which there were $500.
The personal service CORPORATIONS
are not included because the net in
come reported by them was, under
the revenue act Of 1918, not taxable
to such returns, but was required
to be included in the net income of
the individual members or stock
holders according to their distrib-
utive share, whether distributed or
not. OF the above number of cor
porations 100000 returned net in
comes aggregating SS,40O, 100000. on
which the income tax amounted to
$3.50. .OO0,OO and the war profits and
excess profits tax S2,5O6, 900, 900, max
ing a total tax of $3,I59, 200, 900,
which was approximately 50 per cent
Of their net income.
The number of corporation re-
turns for 1918 was less than in 1917
by $4,000, and although the net in
come reported was also below the
amount returned in 1917 by S2,37O,-
OOO, 900 the tax exceeded the amount
for 1917 by $1.O17,OOO, 900"
To Buy Railroad Equipment.