Milford chronicle., 1928-06-01
PRESIDENT SIGNS NEW
BILL CUTTING TAXES
New Law Provides For Annual Re-
ductiOn OF $224,495,OOO

The tax reduction bill was signed
on Tuesday by President Coolidge.
The measure, which now is law,
provides for an estimated annual re-
duction in tax payments of $222,495,-
600. However, the cut in govern
ment revenue under the act is esti-
mated at only $155,OOO,OOO for the
next fiscal year, beginning July 1.
The full force of the reduction not
being felt until the following fiscal
year.
Corporations are the chief bene-
! ficiaries under the new act, which
makes virtually no changes in the
present individual income tax rates
The law provides:
Reduction of the corporation tax
from 1872 to u per cent. Loss in rev.
enue, $123, 100000.
Increase in exemption allowed
corporations from $4,000 to $4,000.
Loss $12,OOO,0OO.
Repeal of the per cent automo-
bile tax. Loss, $66,OOO,OOO
Increase in exemptions in admis-
sions tax from rs cents to So. Loss,
$17,O0O,OOO.
Increase in exemptions from 10
per cent on club dues from $40 to
$25. Loss, $1,OOO,00O.
Increase from $4,000 to $4,000
on maximum exemption for earned
income credit. Loss, $4,5OO,OOO.
Reduction tax on wines to pre-
war level. Loss, $1,000,000.
Repeal of tax on cereal beverages, !
loss, $1S5,OOO.
Reduction in fees on druggists
dealing in narcotics, Sc to So, loss,
$15O,OOO.
Increase in tax on prize fights for !
tickets of $5 and over from ten per
cent to twenty-five per cent. In
crease in revenue, $750,000.
Withholding tax at source in cases
of nOn-residence; increase $2,OOO,-
900.
Revision of tax on foreign-built
Yachts (custOms). Increase, $4,000. I
Total reductions amount to $685.
295,000. A part of this is offset by
increases totaling $2,8OO,OOO. This
gives net reduction of $222,495, 900.
While the act makes numerous
changes in the administrative provi-
Sions, with a view to simplification,
no change is provided in the present
aw prohibiting publicity for income
AK returns.
The original house proposal to
tbolish the practice of allowing con-
iolidated tax returns to be made by
affiliated corporations was stricken
)ut by the Senate and the new law
S virtually the same as at present.
Likewise, the existing law relat-
ng to penalization of corporations,
'Ormed for the purpose of evading
urtax payments, is retained in fav-
n of an attempt at modification or
ginally proposed in the House bill.
The reduction in the corporation
ak is effective on income for this
year, on which taxes are
payable next year. The House had
to make it effective on 1927
ncome, on which taxes are due this
.alendar year. This change in the
inal measure, therefore, makes no I
hange in the taxes paid by corpora /
ions this year and with the next S
government fiscal year, beginning on I
uly 1, the present taxes on corpor- t
tions will be paid for half of that c
ear, thus accounting for only part t
f the reductions allowed under the v
ill becoming effective during this
seal year. {
A repeal of the automobile tax is n
ffective Immediately, but the t
hanges made in the levies on ad- Il
lissions and club dues become eff t.
sctive 80 days from Tuesday. Like Z
Use, the changes in the cereal bev- e
rage and wine taxes become effec- S
We in 30 days. a