The New York herald., 1922-03-16
3OPER CENT. MCOM
TAXDROP EXPECTED,
| CUT HERE IS 4OP.C.
Officials Estimate Quarter
ly Receipts for I. S. Will
Be Below $500, 100000.
EFFECT OF DEPRESSION
Widespread Unemployment
and Larger Deductions
Are Big Factors.
DWINDLING OF PROFITS
Number Of Taxpayers May Be
100000 as Against s. 4
100000 Last Year. 4
DWINDLING OF PROFITS
Special Dispatch 10 TIE New YORK HEs,Lp.
New York Herald Bureau.
Washington ID. c.. March rs.

u
New York Herald Bureau.
Washington. ID. G.. March rs.
Income and excess profits taxes,
payable up to midnight tonight, VIII
be so per cent. less this year than last.
If preliminary but unofficial estimates
of Treasury Department officials come
\ true.
During March this year the Govern
I ment's envelope will contain less than
\ $500, 900 as the first quarterly in
\ stallment of taxpayers on their wages,
\ sales and excess profits earned during
the calendar year 1921. At the first
installment last year TIE Government
got more than s727.0OO,o 900. For the
full calendar year the payments totaled
nearly $4,000, 900, 900. In the calendar
year 1922. However. the Government
officials expect to take in not more
than $4,000 900, 900, and the total may
run as low as 81. SOC, 900 900. The re-
ceipts for the last fiscal year totaled
s3.206, 04s, 900, or a little more than
during tie calendar year.
The Governments fiscal year begins
July and ends June 80. The Govern
ment IS now in the fiscal year 192l-1922.
which terminate June 30 nsxt. Most
taxpayers file their returns on the basis
Of the calendar year. paying during
1922 on the money earned during 1927.
Government Economy Urgent.
4 The anxiety OF Congress and presi-
dent Harding's Administration for
economy In Government expenditures is
based on the Governments expectation
of having its annual pay cut very se-
\ Nerely. The Government Is going 10 &c.
along on smaller wages. and Budget
Director Dawes hopes that the two
billion dollars obtained from the income
and excess profits tax will buy every
thing the Government wants II the
other taxes and receipts hold up 10
what is expected OF them.
| Next year the Government will have
10 get along on still less because there
VIII be no excess profits taxes This
/ tax was repealed by Congress. effective
January /. but payments will be mado
under Il during 1922 on profits gained
/ during 1921. Profits gained during 1924
\ viii not pay tax when the corpora.
4 tions file their returns next year
/ In 1919 income and excess profit taxes
4 poid to the Government a total OF 81 coo.
\ $4,000. The following year the Treas
/ ury collected 1886 $4,000. This was the
4 boom year. During that year the Nsw
4 York district paid si.lOs so. 900. or more
\ than any other district. New York In
! 1921 contributed only ss14.737 900. This
4 year New York's share will be lower by
/ at least 800. 900. 1t is expected.
/ Economic depression is blamed for tho
/ expected decrease in tho taxes The
+ entire nation earned very much less in
:, 1921 than iii 1920. The exact decrease
+ win not be learned for several DAYS.
\ when the Treasury Department receives
/ reports on the March IS collections from
all internal revenue districts.
Widespread Unemployment
\ More than 5000 100 persons were out
/ OF work at the beginning or 1891. accord
Y ing to r survey made by Secretary OF
7 Labor Davis and transmitted 70 Con-
gresg During the boom years these
workers earned nearly $5. 200. .0co,ooo Il IL
estimated The number who obtained
steady work during 1921 can only be
4 estimated The highest estimate places
/ II at 10000 workers Those who did
\ find jobs generally went on the payroll
\ al very much reduced earning capa-
4 city
4 Corporations earned far less In 1871
I than IN the preceding year Some ot
them earned nothing at all A large
number drew on their surplus funds TO
pay dividends. The entire volume os
+ business throughout the country was
reduced. Exporters and manufacturer
\ who during 1920 shipped abroad nearly
II 5000 10000 worth Of goods during 1891
sold goods worth only half as much.
Mills and factories remained closed a
large part Of the year In many sections,
7 causing balances 70 appear on tho
wrong side of the ledger MS far as the
Government was concerned.
SIX million farmers complained that
they were forced 70 sell their cotton.
wheat and other products M loss.
That very many lost money has beer,
verified by the experts OF the Depart :
\ mont of Agriculture Upon the farmers
more than too0o ooo persons living In
/ the rural districts and small towns are
u dependent for their earnings when
I the farmers failed 10 show earnings the
same became true of this group in this
y population The group constitutes \
very large proportion OF the nations
income tax payers.
4 Increased Deductions.
i second and important contributing
\ GAUGE iii fhe loss N revenue will hs
II the increased deductions from gross in
como allowed hy the revenue law cr
y 1921 Under the old law the head or 4
Il family was allowed deduction OF 1000
Plus 5000 Tor each child or other de-
\ pcndent person The new law raises
\ Tie limit to sa500 FOR the family head
ana allows $500 FOR each dependent.
About 2. 400 GOO persons have been pay
ins taxes on incomes of icss than 50 600
4 year The new and higher deductions
allowed for the head Of 4 family W.T..
/ eliminate very largo proportion ot
these pcr-cn- from navtrz tarcs pro-
vided their incomes have not increased.