The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-01-28
INCOME TAX
Bill. MEETS
OBSTACLES
Present Law is, Ex-
cept F or R a t e S,
Practically a Dupli-
cate Of Present Fed
eral Law

ing relative to the differences on
the income tax bills The House,
has passed the income tax bill that
was prepared for it b. the experts.
after the committee. had digested
the measure AS a matter OF tact.
what seems to have occurred is this.
The bill was prepared by tax eX-
pcrts and the ways and means COM
rlittec understood that it was, to all
intents and purposes. a duplicate
of the federal law, except as to tn"
rates. and il was only the rates
that were seriously considered by
the committee The bill then pass
ed the House without discussion.
with the. understanding that it was
the federal law except
as to rates 1t is now before the
Senate committee on finance, and
people arc asking what is really III
the income tax bill. and it promises
to be the real bone of contention
at the present session. The finance
committee now expects to give final
TO this measure at its
meeting on Thursday afternoon and
it may so smooth out the wrinkles
and satisfy the various contentious
in committee. that the bill will go
through the Senate as reported. AS
I have said before. the chances are
today that the income tax bill will
pass in some form.
The issue at the moment is the
rate Of taxation.
The bill before the General AS
senbly takes $1,000 words to eX-
plain all OF the details and nat
urally a newspaper article that un-
dertakes to explain the essential
points must necessarily be brief
and touch the high spots. The heart
OF the pending bill as passed by
the House. and now before <the
Senate, is contained in sections 6
and I. which read as follows:
Normal tax: There shall be
levied. collected and paid for each
taxable ycarupon-t1c net income
Of every inhobitnat q normal tax Of
3 per centum Of the net income in
excess Of the credits provided in
section -: provided. that in the
case Of an individual taxed as a
citizen or resident of the state OF
South Carolina the rate upon sthe
first $4,000 OF such excess amount
shall be per centum.
'SurtaX: That in addition TO the
0ornial tax imposed by section 6. of
thi:; at there shall be levied. coll
lcctcd and paid for each taxable
year upon the net income Of every
individual. for the calendar year
1921 and each calendar year there
after. a surtaX Of 8 per centum Of
the amount by which the net in
come exceeds $4,000"
1t will be illuminating to present
this angle Of tho contention.
Under. the federal law the normal
tax carries the same exemption aS
undcr the proposed bill. that is
$500 for htc head Of Il :iLmily and
$500 additional exemption for each
dependent child under s years Of
age. There is no difference between
the federal law. the proposed state
law and that advocated by the
South Carolina Taxpayers 4ASSocia-
ton as to the exemption for the
head Of family. Unmarried or
single persons carry an exemption
Of 81, 900. Under the federal act
taxable incomes between $500 and
$4,000 pay 1 per cent.
Under the proposed House bill
the tax is per cent.
Under tho proposal Of the South
Carolina Taxpayers Association the
normal tax for the same amount
there is suggested u onc-half Of
per cent tax Then on incomes OF
from 5000 to 5000 the State as
sociation proposes per cent
rate.
,ndcr lhc federal law the taX-
ablc net ihcomc Of $4,000 to $4,000
and upwards is taxed at the rate
of s per cent normal tax Under
the plan Of tho taxpaycs' associa-
ton this not income would carry
u r;,ir of per cent.
\ Very material point of differ
cnce is in the surtaX charge. The
federal law has On ascending scale
on taxable incomes over $4,000. be
ginning with | per cent and run
ming up to as high rs % per cent
where the income exceeds $1,000
cor.
Under thu proposed and pending
Ho,;:e bill a ilat rate OF ) per cent
Is suggested. applying to all tax
able incomes over 5000 by WY Of
tho surtaX
Under the plan Of the South
Carolina Taxpayers Association.
the surtaX begins al onc-half OF !
pc. cent and increases UP 30 1 per
cent to $4,000 net annual in
comes and there stops as TO rate.
This is one OF the chief points
OF difference in the two PROPOSE
tons
Then in the matter of corporation
taXrs. ndcr the Federal Act The
rat" for profits Tor the Year 1921 is
~ per cent. plus the excess profit
This l92 income is payable i'll 1872
and includes the excess profit. Eut
h. profits made for 1872 the taN-
able without the excess profit. IN
comes from corporations for 1222
that is. net incomes made III 49,
to pay Il nat income FaN OF l.. i
per cent on all profits over >2.0"t
up 10 s. 5"oo. and when the So