Imperial Valley press., 1942-10-27
CAPITAL TALKS
by
Peter
Edison

This new First Revenue Act OF
1912 is expected to raise about SIC
billion for the government in l943
Eight billion of it will come from
personal and corporation income
taxes. the other 50 billion from the
) per cent Victory tax which your
! boss will start deducting from your
pay envelope after January l if
your earnings are at the rate of
more than 1924 a year, which is
/ $50 a month.
This Victory tax business is inn
pOrtant. The Treasury Depart
ment estimacs il will hit about
50 million citizens, or well over
half of the adult population.
These people who have to pay
Victory taxes won't have TO fill
out returns until 1914, though the
money will be collected in 1943.
The Bureau of Internal Revenue,
meaning the Treasury, had no eX-
perience in collecting anything like
this Victory tax, but the Treasury
has a whole year in which to get
out the bugs, for though the money
starts coming in which the en-
ployerS remit for the first quarter
of l943, the money won't be ac-
counted for till the Victory taxpay-
ers file their returns in 1914.
BY the time the Victory taxpayer
may have changed jobs twice for
gotten how much he earned and
how much was deducted from his
pay envelope by each employer, lost
all track of what credits he is en-
titled to for purchase OF war bonds
and stamps. The resulting confu-
sion may be rather terrible, but
the Internal Revenue boys figure
they'll get it all Strengthened out
somehow before the deadline.
COLLECTION COSTS
The estimates of So billion from
Victory tax and S8 billion from
income taxes for 1943 are net
that is, the amount the government
will get after the costs of collect
ing the taxes have been deducted.
No official estimates have as yet
been made as to what all these
costs of collection will be, but
fair guess is that they will come
close to $50 million. This figures
at $50 cents to collect every 500
in tax revenue.
The history of the costs of col
lecting the federal tax dollar
gives a pretty good picture of the
cOuntry's financial prosperity.
Back in 1866 after the Civil War,
when the country was pretty well
shot, it cost $2.57 to collect 500
in taxes. The cost gradually
went down until the income tax
law first A7snt into effect i'm
1912, when the cost of collecting
S1OO was Sill. This figure de-
clined to 33 cents in 1918.
This was an all-time low, and 1t
can be explained by the fact that
the tax collections were extremely
heavy in the war years. The eX-
| act reverse of that situation de-
veloped in 1882 at the depth of the
depression when tax collections
were low and the costs of collect
ing each s1OO rose to S2.17.
Since 1882 the costs of tax COL
| lecting have been declining grad
ually. In 184l, with total tax ccl-
lections of over ST billion, the costs
of collecting we're S65 million, or
about SO cents On the S100. In 1912,
with collections of S13 billion, costs
were STA million, or 81 cents per
s1OO. In spite of the innovation CT
the new 5 per cent Victory tax on
wages, Treasury experts beileVe
that 1943 costs of tax collection
will be held down, though the real
test Of that will come in 1914 when
all these Victory tax returns have
to be filed and examined.
REVENUE EMPLOYEES
Back in 1866 there were about
4400 employees in the federal gov
ernments tax department. In 1912,
in spite of the introduction of the
federal income tax, the number of
employees in the Bureau of Inter-
nal Revenue was only 4000 but by
1913 it had risen to $500 because of
the problems presented by the war
taxes. In 1882 the number of en-
ployees was ll,700, in 194l 1t was
| 270O0 and today it it about 10000.
The next tax laws provisions
require that all tax forms will
have to be revised, and because
of the late date of passage, the
printing presses will have to grind
day and night from now until the
job is done, some time during the
first quarter of 1943. An esti-
mated 81 million income tax re-
turns will be filed before March
Is, 1943, but that means that
nearly 200 million tax forms will
have to be printed, to provide
the necessary duplicates, incor-
rectIy filed returns and false