Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-12-29
TEETH IN TAX BILL
Continued from Page One,

TEETH In TAX BILL
Continued from Page one) =
one per cent for each $4,000 up to a
maximum of % per cent on net in
comes of 100000 or more.
Under the present law surtaXes
begin at one per cent on net incomes
between $4,000 and $4,000, and scale
upward to maximum of so per cent
on net incomes exceeding 100000.
The new bill also provides that the
normal tax on incomes shall be 8
per cent where it now is four per cent
and six per cent where 1t now Is s
per cent-a reduction Which the
treasury estimates will result in a
loss of revenue of $91 100000 a year.
Provision also is made in the bill
that 20 Per cent of earned income"
which is defined as wages, salaries
and professional fees, shall be count
ed as exempt in computing income
tax returns. The greater part of
this exemption is expected to fall to
those having small incomes. with the
result that the treasury expects a
reduction of S97.500,000 from this
section alone.
The bill proposes the outright re-
PNcA Va ItC Pr oCAl ldAeS Oh tcle-
grams, telephone and radio messages,
theatre admissions and of certain
other nuisance taxes.
The administrative features of the
bill include a provision for creating a
board of tax appeals composed of not
less than seven nor more than IS mem
hers, appointed for 10-year terms at
salaries of $4,000 each by the secre-
tary of the treasury and without Sen
ate confirmation. The board would hear
and determine cases involving the as
Sessment of taxes, but both the gov
eminent and the taxpayer would be
privileged to appeal any decision to the
courts.
In dealing with delinquencies the
bill provides that where there is no
evidence of fraud penalty Of only
interest at the rate of | per cent. a
month can be levied. The present law
provides penalty of per cent. of
the amount of taxes involved and a
specific penalty of $1,000 in addition to
interest at the rate of / per cent. a
month.
one OF the provisions placed in the
bill by the treasury in it's effort to stop
tax lodging Stipulates that where prop
eerty is placed in trust but the creator
~ VIC u Isl ICldlilS pONeT 10 W!lnQTdW
it. the income from the property is
taxed as belonging to the creator.
Another provision. which 1t is esti-
mated will increase revenues 5000. 600,
would place taxpayers of all states on
the same basis regardless of state
community tax laws. 1t stipulates
that where husband and wife have a
joint interest in property acquired
after marriage the income from such
property is TO be taxed TO the one
having control over it.
Defining capital assets" as property
held by taxpayer for profit or invest
ment for more than two years. the bill
provides that the amount BY which the
tax is reduced on account of such a
loss shall be limited TO 12t per cent.
of the loss. Under existing law cap
ital gains are limited to 123 per cent,
while capital losses. as treasury eX-
Eerts construe the statute, can have the
effect of wiping out entirely income in
the higher brackets because the tax
may be reduced by maximum of IS
rer cent. of the loss. The treasury es-
timated that this change in the law
will increase revenue by about $e5,-
100000.
Another $35. 100000, it is estimated,
would be brought into the treasury by
limit deductions from gross incomes
for interest paid and for losses of a
non-business character to the amount
they exceed the taxpayers tax exempt
income.
On the ground that it is vague, the
bill would repeal the section of the
existing revenue law which provides
that no gain or loss from exchanges
of property for property is realized
by the taxpayer unless the property
received in exchange has readily
realiZable market value"
The bill provides that the penalty
prescribed by the existing revenue
act for evasion of surtaXes by cor
come of holding corporations and all
dividends received on stock owned
by them.
Other developments in the tax sit
uation today include:
The announcement by Mr.. Garner
that he would formulate a tax revi-
sion program, differing in many es-
sentials from the Mellon plan. for
presentation to the Ways and Means
committee.
Renewal of the effort of former
service men to force an early vote
in the house on the soldiers bonus.
Mr.. Garner predicted that some
way" would be found to tax stock
dividends. and made the assertion
that $735.00O,O0O revenue could be
raised annually through taxes against
which there would be no complaint
from the general public. This amount,
he declared, could be absorbed by
repeal or REIMBURSEMENT of other rates
burdensOme to the public.
While opposed to the bonus, he
predicted that an adjusted compen-
sation bill would be passed, despite
the position of President Coolidge
and Secretary Mellon on such legis-
lation.
A conference Of House members
on the bonus question will be held
January 10. under the plan of a
group Of war veterans who are in
sisting that the Ways and Means
committee be instructed to report
bonus bill. Representative Johnson,
of South Dakota, was engaged today
in circulating petitions for the con-
ference.