Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-10
SHARP REDUCTION
IN INCOME TAXES
Editor Reviews Situation to
Show Benefits by Five
Different Cuts.
From $12o to $1.ss.


This sharp reduction. dollars and
cents, shows in a nutshell the big drop
since the war in Federal income taxes
paid by an average American citizen,
married, with no dependents, having
net income of $4,000.
Taking this typical example out OF
the long list of different kinds of Amer
leans, Graham B. Nichol, editor OF In
ternal Revenue News, reviews the In
come tax situation, to show how the
people are benefiting substantially by
the i've different reductions in income
taxes which have been made effective
in the past nine years.
The benefit is made even more strik-
ingly noticeable by a recent warning
from ofi1cialS of the Bureau of Internal
Revenue that taxpayers should be more
careful in making out their returns for
March Is, as the first to be received
showed that many persons were failing
to take advantage of the newest reduc-
ton in taxes, and were paying entirely
too much to the Government. The sur
plus must be returned to the taxpayer,
Tax collections reached their peak in
1920, Mr. Nichol recalls, with a total
Of $5,400, 100000, but the drain on the
American people is rapidly diminishing.
Discusses Many Articles.
N18lC8OWnS, 0"cenb OEu1kS at Ine
soda fountain, and even rouge for the
"happer's" cheeks are discussed by Mr..
Nichol, in his review of tax reductions
appearing in the current issue Of his
Official publication, just of the press.
Discussing the latest tax reduction,
which cut $l60,000,000 of the tax bill
of the American people, Mr.. Nichol
said: Accustomed as we are to think
of Federal revenue in terms of billions,
$160,000,000 still may be regarded as
important money.
ut means he said, "a further re-
duction of income tax that is especially
gratifying to the Salaried man whose
earned income is in the lower brackets.
The normal tax rate on individual in
come for the calendar year 1929 is
reduced l per cent, which means that
on the first $4,000 of net income the
rate is one-hah of per cent; on the
next $4,000, per cent, and on the
balance, 4 per cent; instead of III per
cent, per cent and per cent.
I'm terms of money, married man
with no dependents, who, on taxable
income of $4,000 for 1928 paid tax of
$3.50, will have his tax reduced to
$1.S8; with taxable income of $4,000
ne will pay $3.50 instead of $101.25,
and on $4,000 he will pay $225 instead
of $311.25.
Comparison Shows Benefits.
"a comparison of income taxes for
the years 1918 to 1880 shows the bene-
fits that have accrued to taxpayers un-
der successive legislative acts.
I'm 1918 we were at war. Victory
must be secured. The tax burden-n
burden it can be called, for every dollar
goes into the common till for the COM
mon good-was heavy. A married man
with no dependents paid under the rev.
erlue act of 1918 on net income of
$4,000 a tax of $40; on taxable in
come Of $4,000, $3.50, and on $4,000
o tax Of $1,670. The first reduction fol-
lowing the war was effected by the
revenue act of 1921. Using the same
example, the tax on a net income of
$4,000 was $50; on a net income of
$4,000, $500. and on a net income Of
$4,000, $1,000.
Taxes again were reduced by the
revenue act of 1924. Under the terms
Of this act the married man without de-
pendentS paid on net income of $4,000
a tax Of $2250 on q net income of $i0,-
600 a tax of $165 and on a net income
of $4,000 tax of $515. The computa-
tions are based on Is per cent credit for
earned income.
Figures don't lie. Even an unwilling
witness must admit there is considerable
difference between $120 and $l.8S.
Secretary Mellon in recent radio