The daily monitor. (Mount Clemens, Mich.) 1940-1942, 1941-08-26
Committee Would Lower
Present Income Exemptions
Opposition Metssialixes e Provision
Ending Community Property System

$4,000 to $500 and from $500
to $3.50 for single persons.
An q dditional $51, 900, 900
revenue would be derived by
eliminating the community pro.
perry returns.
In the past, husbands and
wives in the eight community
property states have been able
to divide their income and make
separate returns. Thus, q man
with . $4,000 salary could file
., return on $1,000 and his wife
could file on $4,000. In many
cases the system brought the
aggregate Of the separate taxes
below what the total would have
been under q single return.
1.-THE change does not affect
any of the country except the
community property states u
said chairman George (D-Ga) OF
the Finance Committee. 1T puts
the whole country on the same
basis"
NOT SATISFACTORY
Asked whether the change
was satisfactory Senator Con-
nally (D-Tex) replied in q
drawl: 1T is not. You'll hear
q lot more about that when il
comes to the Senate floor"
AS for the proposed cuts in
exemptions, a highly-placed Re-
publican leader said q substan-
tial group in his party would
vote against them and Senator
Clark (D-Idaho) said they fail
ed to solve the fiscal problem.
Discussing this part of the
committees plan, George said
that while 100000 additional
persons would have to file re-
turns under the lowered exemp-
tons, the majority would not be
taxed. Only $4,000, 900, he
added, would come from per-
sons already filing income tax
returns.
GIVEN MAJOR JOLT
The reduction in exemptions
would give a major jolt to tax
payers in the lower present
brackets.
For example, a single man
with a 1000 net income would
pay $21 under the reduced ex-
emptions compared with $15.40
under the House-approved bill
and $4.40 under present law.
The percentage increase would
be smaller for a single man with
q $4,000 net, who would pay
$50, 881.50, $2O,715.20 and $14,-
709.20 under the respective
levies.
WOULD PAY sac
A married man with no de-
pendent, and a $4,000 net in
come would pay $42 under the
Senate committee plan but moth
ing under the House-approved
bill or present law. A married
man with two dependents and
a $4,000 net would pay $50, Sill
and nothing under the plans in
question.
The committee decided to
postpone indefinitely considera-
ton of the controversial propos-
al for requiring all husbands
and wives to file joint returns.
Such a provision was defeated
in the House.
In addition to the other chang
es, the committee voted yester-
day to change the present law
so as to require a divorced wife
receiving alimony to pay taxes
on it and to permit a man to de-
duct it from his taxable income.
At present, men are not permit
ted to deduct alimony payments
and the money is not taxable
in the hands of their divorced
wives. The change would not
be effective for the present cal
endar year but would apply to
alimony payments made during
1912.
The Finance group also voted
TO incorporate the special 10
per cent defense tax in the sur
tax structure. This ction elm
mated the defense tax as q spe-
cial levy and increased surtax
rates slightly. George said
the change was made in an eff
fort to simplify the tax return
form. He said it would not
affect revenue.