Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-12-06
ONLY INCOMES UNDER SIS, 900
BENEFIT BY NEW TAX LAW
Study of Law Shows That
Incomes Over $4,000 Will
Not Get Any Benefit Until
1923 -
BY HARDEN COLFAX
Geased Wire Service to Tho Journal.)
Copyright, 1921


WASHINGTON, Dec. 3.-FurtheI
study of the new tax law, first copies
of which came from the government
presses this week., shows that out
side of the individual income tax
payer earning $4,000 a year or less
there will be practically on benefit
to taxpayers in 1922; that the benefit
will not be felt, except by that class
of taxpayer. till March. 1928; and
that when it does come, it will be
comparatively small.
The $3,0O0-a-year man living with
wife and two children will receive
virtually the only benefit in his 1922
payments. His income tax will be
cut from $24, which he paid this
year, to nothing. There are 1,500,'
900 such taxpayers. The $4,000-a.
year man, similarly situated, will
pay $2S next year; this year he pays
$50; the $5,000-a-year man will pay
$68 as compared with $104 which
he is paying this year.
And there the benefit virtually
stops. The $6,000-a-year man gets
a cut Of only SIG in his taxes next
year-from 1854 to $13S-or less
than eleven percent; the $1,000 man,
whose taxes this year were 1854 and
next year will be 1898, pockets the
same SIC cut, but in his case the
percentage of reduction is only 6
per cent and that SIC cut is all that
the $4,000, $4,000, $4,000, $4,000 or
$4,000 man will get. For the $10,-
000-a-year man the cut is from $574
to $55e--less than 8 per cent; and
for the $20,000-a-year man, the cut
is from $1,974 to $1.95S, less than
/ per cent.
Tax ON Big Incomes
And the $50,000-a-year man will
have to pay the same taxes next
year az he paid this year, except
that he gets the same SIG reduc-
ton as does the $8,000-a-year man.
In other words the taxes paid by
a $4,000 a year man are reduced next
year by $50, but the man earning
SIC, 900 to $4,000 a year receive 9
tax cut of less than half thai
amount, or SIG.
In the case Of the taxpayer whose
AHCOIiIC CACCCSto pOyOuV lilac yC<lA bhS
SIG cut is due entirely to the in
crease Of 5000 allowed in deduction:
for dependents. If he has no de
pendents, the $4,000 year or better
man pays identically the same in
come tax next year as he is paying
this. In the case Of the man earn
ing less than $4,000 the increased
marriage exemption does not apply
to incomes exceeding $4,000. First
real benefits to tax payers of $4,000
or more will not come for fifteen
months yet, or until March, 1928
This is due to the fact that the sur
tax schedule in the new law is moi
retroactive, like the normal ta1
schedule, to January 1, last. The
new surtax schedule goes into eff
feet January /, next, SO taxpayers
this year will be paying under two
laws-the normal tax provided in the
law of 1921 and the surtax provided
ir: the law of 1913.
Again, when the effect Of the new
surtax rates is felt fifteen months
hence, the small tax payers will be
the chief beneficiary. To the $780,
900 q year man the new taxes are al
most. the same as the old. In one
case he pays $9,258 or 1876 per cent
of his total income; in the other
case, that of his next years income,
he pays $3.50, or II per cent Of his
total income. The new law benefits
him one and one-half per cent.
New Table
In the first tables, prepared last
week at the treasury department,
purporting to show a comparison OF
taxes paid on incomes this year and
last, there were several inaccuracies,
due to rapid calculations. The fol-
lowing table has just been prepared
by Joseph 8, Mccoy, actuary Of the
treasury, and shows accurately the
income tax bill Of married man,
living at home with wife and two
children. in other words. the average
American family-for last year. this
year and next year, under the old
and new laws: