Evening star., 1942-11-26

stances, such q David Lawrence.
taxpayer may be compelled to give
back money to the Treasury so as
to conform to the regulation.
The confusion arising is so great
that It is understood that the Treas
ury itself is considering the issuance
Of an explanatory regulation which
will indicate that persons with a
salary range from $46,80O to $67, 200
may and themselves affected by the
salary restriction and required to
give money back to the Treasury.
Mr.. Byrnes in a recent speech said:
THE so-called $4,000 salary
limitation actually affects only those
having a salary in excess OF $67 200.
The tax on that salary will reduce
the net income to $25,000."
Could Affect S46,s00.
But what was forgotten evidently
was the effect of allowable deduc-
tions on the result. Thus married
person receiving a salary of $46, 300
and having two dependents. with
allowable deductions equal to 10 per
cent Of his gross salary, will find that
under the new 1912 revenue law his
total normal tax, surtax and victory
tax amounts to $21 1892, which leaves
$25,OO8 after taxes. This excess of
So will have to be returned to the
Treasury.
Take the man who has salary of
$4,000 and again allowing for
deductions amounting to about 10
per cent, or 5000, and the total tax
Is $23, ,88l, which leaves the taxpayer
remainder of $26,119. But this is
$l,119 in excess of the $25,O0O which
he may retain under the Byrnes
formula. He will have to give that
to the Treasury unless the regula-
tions are changed.
1t Is true that a person with a
S67 200 salary cannot retain more
than $25,oo0, but it is apparent that
when certain deductions allowable
under the revenue laws are taken,
the net amount remaining might
exceed $4,000. Any excess would
have to be given to the Treasury. So
as allowable deductions increase, the
chances grow that the taxpayer
will be compelled to give the Treas
ury more money so AS to have not
more than 5000 left after taxes,
Workers Penalized.
1t is estimated that approximately
o,400 persons in the United States
receive salaries in excess of SAC, 800.
The number of persons with divi-
dends in excess of $46 300 was about
1924 in the year 1899, and the pres
ent estimate for 1912 made by COM
petent statisticians is that the num-
Der is about 5000
Thus, one set of citizens can re-
tain far more money than another
set, even though the amounts re-
ceived are the same. The people
who work are penalized. The peo-
pie who derive money from invest
ments are not penalized.. Congress
didn't authorize either group to be
punished, but If punishment is to
be meted, Mrs. Roosevelt is right in
declaring that both groups ought to
be treated alike.
No Ceiling in Britain.
incidentally, Mrs. Roosevelt, on
her return from her visit to Britain,
stated that practically no one" in
Britain has more than $21 900 left
after payment OF taxes. This might
lead some observers to believe that
Britain has salary ceiling. This is
not true.
In Britain anybody can earn as
much as he wishes, and the only
way his salary can be cut is by
tax law. There is no barrier to the
earning of $1,000 900 a year or de-
irving that sum from investments If
the opportunity can be found. In
cidentally in Britain the amount re-
manning to the taxpayer on a ST.
100000 income is S38,42O, and that
100000 is net income only after
many allowable deductions have
been made-Britain's laws being
more liberal than ours.
If the allowable deductions in
both the United Kingdom and
America were to amount to 20 per
cent, respectively. the net cash re-
tanned by the British taxpayer out
of gross salary income of SGT 200
would be $14074, while in the United
States the taxpayer, because of the
salary limitation, would retain net
cash of only S11,560. And yet 1t is
being widely stated that Britain's
system is more drastic than ours.
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