The Waterbury Democrat., 1942-10-21

Washington, Oct. 20 (UP)-Here Is summary of the main features of the new tax bill:
 Effective Date: The new taxes apply, except where otherwise noted, to individual and corporate income received since Jan. l, 1922. The new 5 per cent Victory Tax takes effect on income received after Jan. 1, 1943. Excise taxes take effect Nov. 1 if the bill is signed by President Roosevelt by midnight Oct. 21; otherwise not until Dec. l.
 Yield: Treasury and Congress sional experts are in dispute on the additional revenue the bill will raise. The Congressional estimate is that the bill will add $9,600, ,000,- 900 to present taxes, of which $l,700,000000 will be credited against other taxes during the war or repaid after the war The Treasury estimate is that the bill will raise a total of $8,564, 900 900 in new taxes of which $l ,682, ,200,- 900 will be returned, leaving a net new revenue of $6,88l BOO, 900.
 INDIVIDUAL RATES
 Lowered personal exemptions and higher rates. combine to multi ply the taxes now paid in lower brackets. For example, a married man with no dependents earning up to $2,000 a year will pay at least seven times what he is pay ing now. Between $2,000 and $5,- 900 the tax on such a man will be at least two and one-half times what 1t is now. Between $5,00O and $l0,000 the tax will nearly double.
 Normal tax, now four per cent, is increased to six per cent.
 Surtax now beginning at 6 per cent on the first $2,000 of taxable income and increasing to 77 per cent on all above $5,000,OOO, is increased to 13 per cent on the first $2,000 and 82 per cent on all above $200000.
 The only difference in the base against which these taxes apply is that 10 per cent of earned irl- come, up to $14,000. is allowed as a credit against the normal tax but not the surtaX, and interest from partially tax exempt bonds is subject to surtax but not normal tax. This has the effect of mak- ing the 13 per cent surtax take hold ahead of the normal tax in some cases. But ordinarily the combined l9 per cent normal and surtax rate will apply on the first 2,000 of taxable income mad in- crease from that point on.
 Exemptions: Present personal exemptions of $500 for married persons, $750 for single persons, and $400 for dependents are re- duced to $1,2o0, $500 and $35O' except for enlisted men in the armed services.
 Medical Expenses: A new de- duction is allowed for unusual medical expenses, including health and accident insurance premiums Any such expenses in excess of 5 per cent of the taxpayers net in- come may be deducted, but the deduction may not exceed $2,5OO
 Victory Tax: Five per cent or all incomes over $624 year, start ing next Jan4 1. In the case oi wage and salary workers-excep, those in agriculture or domestic service-the tax will be collected at the source through deduction: from pay checks of 5 per cent oi the wage or salary over SIP week. Every one who pays the ta' is entitled to a credit: 25 pei cent of the tax if single, 40 pei cent if married, with 2 per cent additional for each dependent. TC the extent taxpayer buys bonds pays debts or meets life insurance premiums the credit may be talk en against Federal taxes paid. IT most cases, the earliest the credit