The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-28
BY ROBERT TALLEY
NFA Service Writer

NEA Service Writer
WASHINGTON. Jan. 28.-Though
tremendously increased federal in
come taxes now are effective. Wash
ington has heard plenty of talk
about a possible return to the peak
rates of war time, and may hear 1t
again at the forthcoming special
session of congress.
The suggestion for a return to
1918 rates was put forward by DEM
ocratic leaders, bent upon finding
means for balancing the federal
budget. at a recent conference with
President-Ele Roosevelt at New
York.
1t aroused a storm of protest
within the party and without, but at
last reports Mr.. Roosevelt, while
pointing out that the plan did not
originate with him, was willing to
favor it las last resort"
Those War Time Rates
The wartime rates of 1918, as
compared with the new income tax
law now becoming effective, would
boost the normal rates from per
cent on the first $4,000 and 8 per
cent on the remainder to per cent
on the first $4,000 and II per cent
on the remainder.
Exemption allowed married men
would be reduced from $500 to
$4,000, but that of single men would
stand at $1,000. Credits for de-
pendents would be reduced from
$500 to 5000 each.
The only time the nation ever
had an income tax as high as 6
and II per cent was in 1918, pay
able in 1919. Surfaces then ranged
as high as IS per cent, compared
to SIS per cent this year and 20 per
cent last year.
Here is what a return to these
wartime taxes would mean, as COM
pared to this year and last year, in
the case of married man with no
dependents
NET INCOME, $2,5OO-Last year,
nothing; this year, nothing; war
GlIne rate, S3U.
NET INCOME, $3,O00-Last year.
nothing; this year, $40; war time
rate, $50.
NET INCOME, $5OOO-Last year,
$3.50; this year, $500; war time
rate, $3.50.
In the above-for the sake of
comparlSon-the last year" fig
ureS do not take into account the
% per cent tax reduction allowed
on earned income" in that year.
No such credit was allowed in 1918
and none is allowed in the new
law.
Little Fellow Hit Most
Taxes on big incomes would be
raised by return to the wartime
rates, but not anywhere near as
much as the increase on smaller in
comes.
For example, the 800, OOO-a-year
man who paid taxes of $751; last
year and is paying $50, 100 this year
would pay under the war time rate
$4,000.
The Million ollar-a- year man
who paid $240,O0O last year and is
paying SSH, 900 this year, would pay
under the wartime scale $703 ,O3O.
These $1,000, 000-a-year incomes.
however, are getting fewer. In 1881
there were only rs of them. In 1890,
there were $50 and in 1929 there
were 513.
Income they represented dropped
from $1,212098,000 in 1929 to $162.-
$4,000 in 1881; taxes collected on
them dropped from $191, O54, 900 in
1929 to $26,292 900 in 1881.
More Would Pay
A return to $4,000 exemptions for
married men-instead of the So. 500
allowed now and the $500 allowed
last year-would mean great num-
bers drawn into the tax-paying
army.
The rate of the movement for a
return to the war time rates at the
special session of congress will prob
ably depend on what the 1882 in
creases bring in, says Lowell H. Par
ker, chief of staff of congress- Joint
committee on internal revenue tax
alton.
Parker's staff advises both houses
OF congress on all revenue matters.
"Surtax rates under the new law
already are as high as SIS per cent.
as compared with maximum of IS
per cent in 1918" says Parker. THAT
means that if more money is to be
raised by income tax, it will have to
be raised from a lot of small tax
payers, rather than from a few large
taxpayers"
Two Fields Open
According to Parker, there are
only two big fields now for reve-
nue. increase on major scale.
One is the proposed increase in
income taxes and the other is the
proposed sales tax, which the treas
ury has estimated would yield
$35O.O0O 900.
But nothing can be done about
higher income taxes until the spe-
cial session of congress convenes
after the Roosevelt Inauguration.
THE END