The Waterbury Democrat., 1941-08-30

taxable income will be subject to a six per cent surtax. After $2,000 of taxable income, the surtax jumps to nine per cent, and increases until taxable income of over $5,00O, 900 pays 77 per cent surtax.
 Exemptions Lowered
 Personal exemptions would be lowered from $2,O00 to $1 800 for married persons and from $500 to $750 for single persons.
 AS approved by the senate com mittee the bill requires the married taxpayer in eight community prop erty states to pay the tax on the income he earns. At present hus- band earning $10,000 may file re- turn for $5,000 and assign $5,0O0 to his wife who files a return for it. putting the taxable income in a lower surtax bracket and reducing the tax.
 Small taxpayers will be relieved of the necessity of going through 8 complicated computation of taxes. If they choose they may examine a chart of taxes which will be pre- pared by the Treasury for all ln- comes from $750 to $3,000, find the figure which corresponds to their income, and pay that tax.
 The special 10 per cent defense tax paid for the first time this yea: is made permanent and merged into the surtax.
 Corporation Taxes
 The defense tax on corporations has been merged into regular schedules, and in the process the levies on small corporations-those earning less than $25, 5,000 & year were increased slightly. The new rates are IA per cent on the first $5,000 of income, 1T per cent be- tween $5,0O0 and $20,0O0, and 19 per cent between $20,000 and $25,- GOO.
 Bigger corporations will pay the same normal tax, 24 per cent, into which the defense tax has been merged.
 Corporations also will pay a sur- tax, to which they are not subject under present law. It will be six per cent below 25,000 and seven per cent above.
 Excess Profit Tax
 Corporations will be subject to increased excess profits taxes. Ex- isting law places a 25 per cent levy on income subject to the excess profits tax up to $20,00O; 30 per cent from that figure to $50, GOO; 35 per cent from $50,000 to $100,000; 40 per cent from l$10O,00O to $250,- 900; 45 per cent from $250,OO0 to $5o0,000; and 50 per cent or any, thing else.
 The new bill raises these taxes 10 per centage points in each bracket. making the range 35 per cent to 60.
 Corporations m ay continue to choose whether to determine their excess profits on the basis of in- creases over what they earned on the average in the years 1936 to 1859 inclusive, or to compute their earnings as 8 per centage of in- vested capital. If the earnings do not exceed eight per cent on in- comes up to $5,000,000 and seven per cent above that figure, they VIII not be subject to the excess profits tax.
 But 8 House-approved special 10 per cent excess profits tax on cor porationS which have increased earnings but still earn less than eight per cent of their investment Is eliminated in the Senate bill.
 Estate and gift taxes:
 The exemption of 4O,OOO is re- tained for estate and gift taxes, but the levies are increased. At pres- ent they begin at two per cent. Under the bill they begin at three per cent and increase to seven, 10, t3 per cent up to a maximum of 70 per cent on estates over $50,O0O, ,OOO.
 Excise taxes:
 Numerous excise or nuisance" taxes are made permanent, others are increased, and new ones are added.
 Automobile owners will carry a seven per cent levy instead of 1-2 per cent, and in addition will re- luire an annual S5 federal license. The license stickers will be sold at post officeS.
 Tires will be taxed five cents a pound, tubes nine cents, railroad, airplane and steamship fares will be taxed five per cent. Toilet ar- ticles, furs and jewellery will carry 8 tax of 10 per cent. The existing gasoline and electrical energy taxes are made permanent.
 Radios, photographs, records, and musical instruments are taxed 10 per cent, as well as refrigerators and air condstloners.