Evening star., 1928-05-29
Cut in Government Revenue
for Next Fiscal Year Only
S155,000,00
REPEAL OF AUTO LEVY
is EFFECTIVE TODAY
Corporations Chief Benefciaries
Under New Act-Individual
Rates Unchanged.
~ the AssnniateA preaa.

BY the Associated Press.
The tax reduction bill was signed to-
day by President Coolidge. The meas
ure, which now Is law, provides for an
estimated annual reduction In tax pay
ments Of 1922, 2,495,000.
However, the cut in Government reve-
nue., under the act, Is estimated at only
Sl55, 100000 for the next fiscal year,
beginning July /. the full force of the
reduction not being felt until the fol-
lowing fiscal year.
Corporations are the chief beneficial
ries under the new act, which makes
virtually no changes in the present in
dividual income tax rates. The law
provides:
Reduction of the corporation tax
from 1872 TO IL per cent. Loss In reve-
nue., S123 100000.
Increase in exemption allowed cor
porations from $4,000 to $4,000. Loss,
S12,000.000.
Auto Tax Repealed.
Repeal of the per cent automobile
tax. Loss, s66 1000, 900.
Increase In exemptions in admis-
sions tax from rs cents TO So. Loss,
S17,000,000.
Increase In exemption from 10 per
cent tax on club dues from $40 to s25.
Increase from $4,000 to $4,000 on
maximum exemption for earned income
credit. Loss, S4,500 900.
Reduction tax on wines 10 pre-war
level. Loss, 81 ,000. 900.
Repeal of tax on cereal beverages.
Loss, S165, 900.
Reduction In fees on druggists deal
ing In narcotics, S6 to So. Loss, $50, 600
Increase in tax On prize fights for
tickets of SIS and over from 10 per cent
to Is per cent. Increase IN revenue,
$3.50. 900.
withholding tax at source in cases
of non-residence, increase, $4,000, 600.
Revision OF tax on foreign built
yachts (customs). Increase. $4,000.
Publicity Prohibited.
Total reductions. amount to s225,-
2s5, 900, a part Of TINS Y onset py
increases fnsaiISfg "a. 500 600. This
gives 4 net reduction Of s222. .495. 900.
While the act makes numerous
changes In the administrative pro-
visions with a view to simplification,
no change is provided in the present
law prohibiting publicity for income tax
returns.
The original House proposal to abol-
isl1 the practice Of allowing consolidated
tax returns to be made by afnliated cor
porations was stricken out by the SEN
ate and the new law is virtually the
same as at present.
Likewise, the existing law relating TO
penaiization OF corporations formed for
the purpose of evading surtax pay
ments is retained in favor OF an at
tempt at modification originally pro-
posed In the House bill.
No Change This Year.
The reduction in the corporation tax
Ia effective on income for this cal
endar year on which taxes are pay
able next year The House had pro-
posed to make ii effective on 1927 IN
come on which taxes are due this cal.
endar year. This change in the final
measure, therefore, makes no change IN
the taxes paid by corporations this
year. and with the next Government
fiscal year beginnine on July !. the
present taxes of corporations VIII De
paid for half of that year.
Repeal of the automobile tax Is ef-
fective Immediately. but the changes
made In the levies on admissions ano
club dues become effective 80 days IRON
TODAY Likewise, the changes in tile
cereal beverage and wine taxes become
effective In 30 days.