Evening star., 1933-01-02
F|GURESSHOWBAS|S|
OF TAX ON INCOMES!
Citizens Making Less Than
$1,000 a Year Pay Only 3
Per Cent of Bill.

Who are the rich" in America?
This question becomes pertinent as the
latest figures from the Bureau of In
ternal Revenue are analyzed, especially
as 1t is apparent that the people who
collectively earned a net income of
about 0o,0O0,0o0 paid only $89,-
O0o, COO in taxes, while another group
Of people who earned 81 ,280, ,0000
paid tax of S149, 100000.
The first group comprises all indi-
viduals who had net income Of less
than $4,000 a year and the second
group includes all who earned S50o00
@ yeer or more
The under $4,000 group, which paid
the, S69,000,000 in take. had about
/ $4,000, ,00J in profits from sale of real
estate, stocks and bonds other than
capital net gains The same group
received about S2.ooo.o 100000 in divi-
dendS on stock of domestic corpora
tionS, as compared with $3.50, 0,o00,00o
from similar sources received by the
over $5o.o00 group,
$4,000 to $4,000 Group.
If it is assumed that the $50 900 a
year point is not a good dividing mar
gin. the figures of what taxes are col
lected from the group earning $4,000
and Just under S50000 a year are en-
tightening. Thus the net income for
this group Is S5.396. 100000 as COM
pared with a net income of $780,
OC0,000 for the group over S50000 a
year. This class-between $4,000 and
$4,000 a year-paid tax of $81,-
100000, while the over S50,000 class
paid S149,000,00o.
Another interesting sidelight is that
she group under $4,000 a year paid
only S7,350,000 in taxes, but its net
income was $6,551 900, 900.
This data reveals clearly that the
Government has not been taxing the
people who have been earning the big
collective incomes on any basis COM
parable with those of the upper classes
in income. and that with the shrink
age of incomes in the over $4,000 a
year class the biggest share Of the net
income is in the group below $4,000 a
year.
II the income tax is to b, maintained
as q means of revenue raising without
recourse to sales taxes, then the Treas
ury can hope to raise more money by
taxing more heavily the groups under
$4,000 year, and perhaps even more
drastically the incomes above $50000
But the fact remains that the tax laws
have rested rather easily on the people
with incomes of $4,000 a year and run
ming up to $4,000 year, as compared
with the heavy toll taken from those In
excess of S50,050, while those under
$4,000 have paid a negligible amount
of the total tax, about per cent of the
tax bill.
2,560,00O in $4,000 Glass.
One of the arguments made in favor
of the sales tax is that it is spread
evenly over all the people, but if 1t is
desired to spread taxes evenly the Gov
eminent has the same opportunity with
respect to the income tax Politically
heretofore it has been deemed unpopu-
lar to tax incomes under $4,000 year,
because 2,560,0o0 persons are in that
class, whereas there are only 55612o
persons with incomes over 5000 a
year, and Of this group only 10000 have
net incomes in excess of $4,000 a year.
The general principle among the
politicians has been that this latter
group could pay higher taxes. IN
questionably the new income tax rates
which go into effect March Is next will
weigh heavily on the higher brackets,
but they will by no means bring the
revenue expected, because of the pass
4446 OA dAN1OGl4aS anu BtL1SId1 1OSSSS III
business. AS for the group under S5o,-
600 a year. the net income is not ex-
pected to vary as materially as that Of
the group in the higher brackets.
No further tinkering with the in
come tax is to be expected until late
in 1888. when the returns from the
laws passed last Spring have been COL
1ected and the productivity OF the tax
rates in each class is studied in the
light of 1882 business conditions. D.L.
tCopyright 1922