Evening star., 1923-12-17
BONUS WILL BE PASSED
OVER PRESIDENTS VETO,
SMOOT SAYS, AFTER POLL
Continued from First Page.)

$4,000 of net income is fixed at per
| cent. and upon the remainder Of the
net income at per cent.
49, The surtax rates begin at l per
cent on net income from $4,000 to
$4,000; an additional / per cent for
each $1,000 of net income up to S36,-
600; then l per cent additional for
the next $4,000 of net income up to
$4,000, and then l per cent addi-
tional for each $4,000 of net income
up to a total of 25 per cent at $780,
600 and over.
IL. Capital assets are defined as
property held by the taxpayer for
profit or investment for more than
two years. Upon the sale of capital
assets the tax on the gain from the
sale is limited to 121 per cent of the
gain, and the amount by which the
tax is reduced on account of such
loss is limited to 12R per cent of the
loss.
"5. The taxpayer is permitted to
take as deduction from his gross
income in determining his taxable in
come interest on Indebtedness and
losses of a non-business character
only to the extent that the sum of
these two items exceeds his wholly
tax-eXempt interest.
70. In community property states
where the husband and wife have a
joint interest in certain property of
either acquired after marriage the in
come from this property is taxed to
the spouse having control of the
property.
Change Stocks Ruling.
az. The principle contained in the
1918 revenue act that liquidating
dividends constitute a sale of the
stock instead of a distribution of
earnings has been restored. This
puts liquiGating dividends within the
capital gain section of the act, and
recognizes the real effect of such
dividends.
"S. The section with reference to
the reorganization of corporations
has been rewritten to eliminate exist
ing uncertainties in the present act
to include other usual forms of cor
porate reorganization in aid of busi-
ness, such a s the splitting of one
corporation into two or more cor
porations.
"9. Provisions have been inserted
to prevent the use of this reorganiza-
ton section to escape proper taxation
by increasing the basis for deprecia-
tiOn or depletion, or by increasing the
basis of gain OF loss from the sale Of
assets transferred in connection with
reorganization, or by distributing
as capital gain what are in effect
dlVldendS out OF earnings.
Limit Deduction.
10. The deduction for discovery
depletion is limited to so per cent of
the net income from the property de-
pleted.
I'll. In the case of a trust where
the trustee has the discretion to dis
tribute or not the income is taxed
to the beneficiary if distributed and
TO the trustee If not distributed.
"12. Where the grantor of a trust
reserves the right to change the trust
in favor of himself, the income of the
trust is taxed to the grantor.
13. The penalty under section 220
which seeks to penalize corporate forms
used to avoid imposition of surtaxes
on the stockholders. is now based on
all the income of the corporation
which would be taxed in the hands of
an Individual.
IA. The application of the present
law requiring an income for a frac-
tional part of year to be placed on
an annual basis is restricted to cases
where return is made for a part of
year as the result of the voluntary
act of the taxpayer in making change
in his taxable year.
Creates Appeals Boards.
To- "A DodrQ OF tax appeals Is Gre
ated to hear all appeals from the as
sessment of additional income and es-
tate taxes, which will sit locally in
the various judicial circuits throughout
the country. The cases of both the gov
ernment and the taxpayer are present.
ed before the board which acts i'm
partially, and the practice there is
similar to that before the Interstate
Commerce Commission.
Upon a decision in favor of the gov
ernment, the additional tax can be
assessed by the commissioner of in
ternal revenue and the taxpayer i.
left to his remedy in the courts for
recovery of the tax. If the deci-
sion is in favor of the taxpayer, the
commissioner may not assess the tax
but is left to his remedy in the courts
In hearing in the courts, the find
ings of the board shall be taken as
prima facie evidence of the facts con-
tained therein.
"16. The administrative sections of
view to clarifying their provisions,
making the statutes of limitations
consistent, relieving the necessity for
protest on the payment of taxes, and
Tightening the penalties for minor
failures to comply with the act.
1T. The tax on kilograms, tele-
phones, leased wires and radio is re-
pealed.
rs. The tax on admissions is re-
pealed."