Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-08
Tax Reduction Small
Help to MilliOnaires
BY HARDEN COLFAx.

Pity the poor millionaire, for he IL
the one who gets the least advantage
from the tax reduction which appar-
emily is on its way to the President for
his approval.
Under the plan for reducing Federal
income taxes which are to be paid next
year for incomes received during 1929,
the largest propOrtionAte reduction In
payments into the Treasury will be
given those of smallest taxable incomes.
This is accomplished by reducing the
normal, or basic, rates of taxation Of
individual incomes without disturbing
the surtax brackets which apply only
to those of the larger incomes.
For instance, the plan would reduce
by as much rs two-thirds the actual
payments to be required Of those with
taxable incomes Of less than 5000,
while the few fortunates who have in
comes Of 81, OO0, 900 or more would have
their payments to Uncle Sam reduced
by only about one-tWenty- fourth. Sur
taxes do not apply on incomes OF less
than $4,000, although the normal tax
varies below that figure, and to show
that the little fellow BENEFITS more under
the tax cut resolution 1t may be stated
that the payments Of those who are
under the Surtax brackets viii be re-
duced from Al per cent up, while the
reduction of those in the SurtaX-pay1ng
brackets of a $4,000 net income, Tor
instance, will not reach rs per cent, ana
the reduction decreases in percentage aS
the income increases.
~
This Is In line with the theory OF the
income tax which Congress has adopted
as its policy-that the burden OF tax
alton should rest most heavily upon
those In the best position to bear 1t.
Every change in the revenue law since
the World War has exempted ADDITIONAL
Groups of small taxpayers and lightened
the payments OF those remaining.
The Administrators resolution does
not give further exemptions, but merely
cuts the payments of those remaining
in the income taxpaying classes. IL ID
UNIQUE in that 1t applies only TO pay
ments to be made In 1880 for 1879 IN
comes and II the reduction Is to continue
thereafter further legislation VIII De
necessary.
AS applied to corporation income
taxes, the resolution makes . nat cut
]
TO be applied to net incomes after oe-
auctions for prior year losses have been
made, 80 that all corporations VIII
benefit proportionately. Treasury ON.
cials estimate the plan as applied VIII
reduce individual income tax payments
by $40, 900 coo next year and corpora
ton payments by $9O,OOO,OOO.
- -
Analysis Of the reports submitted last
, year for incomes received In 1921-Lne
latest complete figures AVailaple IOE
such purposes. as ANAL Instruments IN
the tax on 1928 incomes Will not pc que
until December 15-demonStraees SnSS
them as has" are bearing the tax Dur-
den for Uncle Sam. In the nrst place.
only 3.46 per cent Of the total popula-
ton of the country were required TO ME
individual income tax reports under the
law. and of the 4,lO1, 900 individual re-
turns filed last year ! $50, 900 were nom
taxable OF the corporations ming re-
turns IS per cent had no net income
10000 reporting deficits ana AO'OOO pc
ing inactive and submitting no oaCa.
Income tax statistics seldom are exactly
comparable In any two years because OF
changes in the law, but the trends are
similar in all years.
The figures show that in 1928 in
dividuals with net incomes OF 5000 or
m. accounted for $14,064, 100000 of
Ia, S22. S40, 900 900 aggregate income re-
ported by individuals, or 62.38 per cent
of the total, although the 5000 and up
| class represented only 22,27 per cent
of the total number filing returns. This
same 22.27 per cent of the individual
returns paid 9S.SS per cent Of the total
Federal income tax received from in"
diVidual taxpayers in 1928. or $8ls, OOO,-
600 out of $3.50, 100000. The class be-
low $4,000 viii get q So per cent cut In
tax payments under the reduction reso-
hutton, which will widen the gap fur
ther.
OF corporations reporting last year
| for 1877 operations, q bare l0,05l, or
3.S7 per cent of the ass, 800 which re-
ported net incomes, had 78.42 per cent
| Of the total tax paid by corpora tons, or
seas, sol 900 out Of 81, i30. 674, 900.
IConyriEht. 1921