Evening star., 1934-05-10
ROOSEVELT SIGNS
REVENUE MEASURE
New Act Increases Levies
and Strengthens Laws
Against Evasion.
BY the Associated Press.


annual revenue by signing into law
the 1884 tax bill.
The act increased tax levies already
amounting to $3.250,0 100000 by
strengthening existing law against
evasion and adding new sources OF
income.
Mr.. Roosevelt affixed his signature
in the presence of congressional lead
ers and Treasury and Internal Revenue
officers.
He will send shortly to Congress q
messaee asking reconsideration of the
provision in the bill levying q tax on
coconut oil, which he regards as un-
just to the Philippine Islands.
Senator Harrison of Mississippi and
Representative Doughton of North
Carolina, the chairmen of the Senate
Finance and House Ways and Means
Committees, who piloted the legisla-
ton through Congress. stood by the
President at the signing.
Other committee members and Sec
retary Morgenthau were present.
Plugging loopholes disclosed by the
Senate Banking Committee to be
available to the wealthy was Congress
motive in writing the new law. But
before the bill went to the White
House some rates we're boosted and
the income-tax Ievies revamped.
The new law provides:
Heavier taxes on higher incomes,
gifts, estate transfers, corporations
and personal holding companies.
Partial income-tax publicity.
Elimination of consolidated corpora
ton returns.
Repeal of the per cent normal
tax on individual net incomes above
$4,000. with surtaxes to start at 81, ,000
instead Of $4,000.
A 3-cents-a-pound tax on Philip
pine cocoanut oil. the revenue to be
returned to the island treasury.
Count on sl67,000,0 900.
Experts estimated the full effect OF
the law will not be felt until 1895
They counted on only sl67 900 900 by
the end Of the next fiscal year on
June 80. 1885.
A one-tenth of per cent tax on
the declared value of corporation cap
ital stock and S per cent levy on
earnings above 1914 per cent OF that
capital were estimated to raise $685.
100000 annually for the largest single
item in the act. These taxes were
imposed to finance the public works
program. but went out automatically
with repeal
New levies on the transfer of estate.
after death ranged from to so pei
cent, as compared with the old range
OF ! to As. Credits on State inherit.
ance taxes are not allowed on the In.
crease.
Railroads Privileged.
Only railroads henceforth may fit
| consolidated returns for themselves
and subsidiaries. The privilege il
abolished for other corporations.
The new income tax schedules levy
fiat 4 per cent normal rate on the
first $4,000 Of individual net income
They retain the 81 ZOO exemptic fol-
single persons, $2.500 for married anc
$400 for each minor dependent, which
may be deducted from net income te
give the taxable income.
A 10. per cent credit Is allowed fol
| all earned net income up to $4,000
thereby reducing payments on small
incomes.
The old per cent normal tax or
net incomes above $4,000 is eliminat'
ed. but surtaxes now begin at $4,000
instead of $4,000.
These surtaxes start at per cent
and swell through 20 brackets to IS
per cent on excuses over 81 900 900
Previously. the rate started at pei
cent on the excess between $4,000 anc
$4,000 and rose through So brackets
to SIS per cent Of those over 81 900 900
Gains and Loss Provisions.
A new capital gains and loss pro-
vision was a direct result Of Senate
testimony that partners in j. p. Nor
gan & Co, and other New York house.
paid no income taxes in some of the
depression years From now on. capi.
tai losses may be deducted from tax.
able income only to the extent oi
capital gains. with the exception thai
$4,000 of any excess loss may bt
charged off from ordinary income.
For tax purposes. capital gains ART
measured at 100 per cent, If the as.
set is held less than one year; 80 pei
cent, If from one to two years; so pei
cent, from two to five; 40 per cent
from five to 10 years. and 80 pei
cent, if more than 10 years.
Partnership allowances for losses
are limited to curtail deductions tt
the extent of gains from the sale oi
capital assets.
A new gift tax schedule runs exact.
ly three-quarters of the estate taxes
Charge-offs arising from exchange.
Of stock and corporate reorganiza.
tions are limited.
Producer to Pay Tax.
New language will seek to insur,
that gasoline and oil taxes are pait
by the original producer. Though no
in the law, the Treasury expects tt
raise as much as $85, 5,000.0 900 by NOR,
rigid administration of depreciation
allowances.
The new publicity provision vii
open to public inspection q separat,
statement to be filed by income tax
payers giving the gross and net in.
come, total deductions and credits ane
the tax payable.
Taxes on candy and soft drinks, fur
valued up to SIS and jewelry no
worth more than $25 are repealed
The cents $100 tax on the sale o.
produce for future delivery is slashee
to 3 cents. January l is set as the
date for repeating the bank check tax
Taxes Compared.
Married men without dependents
will pay the following taxes on earned
net income under the new tax Law
signed today by President Roosevelt
| as compared with what they were
charged on 1888 incomes under the
| old:
| Net income. New law. Old Law
$4,000 ......... So $2(
$500 .......... 26 4(
1000 .......... A 81
$500 .......... So 81
5000 ......... 80 lO(
5000 ..... ll6 14(