Evening star., 1934-12-10
j. s. TAX BURDEN
CARRIED BY FEW
Fiuures Show ga Per Cent
OF People Immune in
1888.
BY DAVID LAWRENCE.

BY DAVID LAWhENSEs
More than "a per cent Of the per-
sons of working age in the United
States in the year 1888 did not pay
ANYTHING in income taxes to the Fed
eral Government
This interesting piece of informa-
ton may be derived from study of
the latest official figures made public
today by the Bureau of Internal
Revenue
Every year the Government makes
an analysis of income tax returns
and complies the data from which, if
one is inclined, significant idea may
be obtained of what has happened
to business and the income of indivi-
duals in the preceding year.
Thus there are 46,683,96 persons
of 18 years or over who are able to
work according to the official census
of 1880. OF this number 1882 ,845
did not pay cent of direct taxes in
1888. Commissioner Guy T. Helver-
ing reports that only 1871 ,116 persons
in the entire country HAD taxable in
comes. Even that figure was slightly
in excess of 1922
u. ,. Got Only S312,961,161.
Now the total gross receipts of the
S,660,105 persons who filed returns
was nearly l,00O,O00,OO0, but the
Government got only $372,967,76l in
taxes. due either to the fact that
many persons had losses out of their
capital saved and thus were entitled
to deductions or else the rates of
l>,,1lr
in the lower classes do not bring
in much taxes.
For instance, out of the $40 ,845 $685.
532 Of total taxable income, there was
earned about s6,792, 900 900 by persons
with net income of $5 900 a year or
less.
The people with incomes between
$4,000 and $4,000 earned another ST.
477000,000 and the persons with net
incomes between $4,000 and $25,OOO
year earned 096000 900.
If We think $4,000 is the dividing
mark between moderate wealth and
extreme wealth then it will be found
that everybody over the $4,000 a year
OF net income earned total of about
s1,480, 100000. But it may be disputed
that a $25 900 year net income rep
resents position of great wealth and
that perhaps S50,000 or over may be
regarded as constituting the wealthy
class.
Gave One Third of Taxes.
If this is the case, then the total
net income of the really wealthy peo-
ple-all those of $4,000 a year or
over-was, according to the official
figures. S657 100000. This same group
gave the Government about one-third
of it's income in taxes; namely, about
$193 100000.
Such a tax payment by the group
Of $500 year and over represents,
than half OF the total income taxes
paid by individuals.
The people with incomes under
$4,000 a year paid about IL per cent
Of the total tax.
The people between $4,000 and
$4,000 a year paid an additional
proportion of 8 per cent of the total
tax.
If you group the incomes between
$4,000 and $25,000 year, you find
that the persons in that group paid
just about IA per cent of the total tax
So the graduated scale Of tax rates
manages to keep "a per cent of the
people immune from Federal income
taxes and permits people of moderate
incomes, who earn the bulk of the
money, to pay relatively small tax
bill.
There is much significance in this
situation, because if the present heavy
expenditures by the Federal Govern
ment result in material increases in
taxes, it will mean that while the
people of $50,000 year or over will,
of course, find the amount they have
to pay substantially increased, it will
not yield enough money to balance the
Federal budget if all of such income
were conflscaJed.
Thus, as will be seen above, total
net income of 81 ,480, 600, 900, if taxed
100 per cent-so that everybody with
an income of s25,000 a year or over
gave everything to the Government,
aside from a small sum for actual
subs1stence-the total amount COL
lectcd, based or 1888 figures, wouldn't
oa4AANO W pay DuG dUOuI llllTQ Ol
last years Federal deficit, and pos
sibly not much more of the indicated
deficit for the present fiscal year.
Taxation Will Bring Protest.
Certainly there isn't enough total
net income in the group above $25, 900
year with which to balance a Fed
eral budget, and the alternative would
naturally be to start taking heavier
taxes right down the line from
$25,000 down to the lower incomes
something that will produce a con-
siderable protest when the pinch
comes.
Maybe when people generally study
these figures and see the handwriting
on the wall they will come to the
conclusion that in the next two or
three years, If the present rate of
spending is not stopped or if business
isn't quickly put on its feet, the
needed tax revenues cannot be OBJ
tanned without severe and painful
taxation for everybody, including
many Of the 44,952,845 persons who
today pay no taxes at all to the Fed
eral Government on their incomes.
tCopyright. 1934)