The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1922-01-04
new TAX MEASURE
FAVORS POOR Man
Nearly All Of the 1886, 100000 TX
Reduction Is Saved 90 the
Common People.

ehC ACduSbAOIS ulduG III 1SUCidl lakes
by this new law represent savings
to the eavrage man. The largest item
of reduction is that in transportation
taxes. The new law wipes out all
taxes which have been paid by pas
sengers in the purchase of tickets
and by shippers, who have paid taxes
based on freight rates and parcel
post rates. The passenger tax
amounted to 8 per cent on every tick
ct bought over AZ cents in value. The
freight tax amounted to 3 per cent
on the face value of the freight bills.
The parcels post tax was l per cent
on each % cents of postage. All told
these taxes took out of the pockets
of the American public $500 ,00O,90O
a year. All this will stop on Janu-
airy 1. None of the taxes thus COL
lected went into the pockets of the
railroads, as it was all collected by
them on behalf of the government, so
that railroad revenues are not affect
ed by the repeal of these taxes.
Outside of the travelling and ship
ping public the next largest class of
people affected abe the heads Of fam
lilies and those who have dependents.
The new tax law reduces the amount
they r to pay by $7O,OO0,000. I'm
der the old law married men or heads
OF families having an income of less
than $4,000 a year were allowed an
exemption Of $4,000. Under the new
law this exemption is increased to
$4,000. This change goes into effect
on this years income. 1t will affect
over 100000 heads of families.
Under the old law heads of families,
or those who had dependents, were
allowed an exemption of 5000 for
each dependent. Under the new law
this exemption is increased to $500.
This will affect about 750,O 900 indi-
viduals in addition to the 1900, 00O
mentioned above.
Another feature of the law which
closely touches the average man is
the exemption of the first $500 of in
, come which is derived from dividends
in a building and loan association
At the average dividend rate paid by
building and loan associations this
viii enable people to invest between
:, $4,000 and $4,000 in building and loan
stock and have the income free from
federal taxes. There are at present
about 5000, 900. members in 5000
, building and loan associations that
will be affected by this provision. III
is anticipated that this provision viii
also encourage people to invest in
building and loan stock. If so, thai
, in turn will furnish stimulus to the
!, building Of more homes and house:
and relieve the rent situation in city
: districts.
. All taxes on wearing apparel. shoes
etc., are reepaled under the new law
Although the new law did not repes
the luxury" tax on household fur
: niture, trunks, and other manufacl
ured goods, it did shift the tax frol
= the to the manufacture.
Under the old law the consumer pal
:. the tax on the basis of the reta
price. This retail price, of cours
represented all of the various profit
made by the manufacturer and mi
dleman. Under the new law the t.
is paid by the manufacturer upon I'll
wv basis of the manufacturing cost. A
ed though in the aggregate this t;
n amounts to quite a bit, rs a rule
ut IS so small in each individual ca
he that the manufacturer pays it withol
at passing it on.
ay The public is also relieved of t
Id, taxes which have been paid on toll
,se soaps, powders, etc. This t;
he amounted to 1 cent on every IS cen
an worth of perfumery, cosmetics, toll
m articles, proprietary (patentl mex
us cines, dental supplies, etc.
Ig- The tax upon soft drinks and i
in cream is also repealed. The pub
ed gains more by the repeal of the
ire taxes than the government loses, f
an it W admitted that although the
ar taxes were collected Of the public,
TO very small per cent of them were ev
turned over to the government b
he cause Of the inability to establish
I'D system for checking up and enforcil
he their payment.
ar The tax upon insurance premium
Is is also repealed.
ais