Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-12
INCOME TAX SHOWS
BUSINESS LOSSES
Sharp Reduction in Returns
Predicted by Wall
Street.
IpeciaI Dispateb 20 The star

Special Dispatch to The Star
NEW YORK, March l2.-Federal in
come taxpayers have been filing their
statements earlier this month than
usual. A large number have already
been received at the office of the coll
lector for the second district in New
York, which covers the downtown BUSH
ness area, including Wall Street These
are the returns which will be of greater
significance than ever this year by rea-
son of the small payments to be made
on them owing to the losses that have
been taken on securities and on busi-
ness operations.
While it is yet too early to estimate
the receipts of this district compared
with 1880 and 1929, it is understood
that there has been a very great fall
ing on shown by the income statements
already filed. The astonishing feature
Of these statements is the high proper
ton OF those on which not dollar of
tax will be collected.
Extent Of Shrinkage.
Tax income experts who have been
busy for months making up the re-
ports of Wall Street people, and this
includes investors whose incomes range
from $1,000 to 100000, claim that the
shrinkage in the income tax statements
by their clients will be from SO to 65
per cent, compared with previous years.
On this basis they feel that the Gov
ernment'S estimate of a decrease of IS
per cent in income tax receipts for the
FIRST quarter this year is entirely too
low, even though, on account of the
comparatively small payments to be
made, many individuals and corpora
tons will return to the Government the
full years payments on March Is rather
than split 1t up into the usual quarterly
installments.
According to the income tax figures
for 1928, which are the latest published
in detail, SO per cent Of the taxable
income was derived in that year from
those in the income classes between
$4,000 and $4,000. Their incomes
were approximately $4,000, 100000 Of
the total taxable amount of SIS, 226,-
100000. Tax authorities believe that
the greatest falling of in tax payments
this year will be by those whose in
comes range between 5000 and $40
900.
Analysis Of Profit.
In the same compilation of income
tax figures for 1928 it was shown that
out of the profit realized from sale of
real estate, securities and other kinds
of property amounting to S2,928, 000,-
O0Oy over so per cent or II was gain
that came to the income classes be-
tween $1,000 and $4,000, consequently
1t Is fair to assume that it viii be in
these ssme income tax brackets that
the largest ratio of losses will be taken
and in which the highest percentage
Of decline In actual tax payments this
year from those Of 1880 Or 1929, win
occur.
In spite Of the fact that the United
States Government viii be a heavy
loser this year from the operation of
the capital gain-and-loss feature of
the income tax, those who have been
sounding members of Congress with re-
spect to q change in the law at the
next session have been disappointed In
their conferences. The argument Is
that, although the Treasury will suf-
fer this year in an amount estimated
at between $100.000,0o0 to 100000
600 from that feature of the law which
permits taxpayers to deduct losses, the
Government has been a gamer by
substantial amount in the years since
the law has been in effect.
Those who are In charge of tax az
fairs believe that, year In and year out,
the Treasury will receive more benefit
than harm from maintenance of the
capital tax provision Of the law.
Copyright, 1ss1)