Evening star., 1943-05-05
Tuxes
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mestic services, will have 20 per cent
deducted from their pay envelopes
and salary checks. such collections
covering both income and Victory
taxes.
2. Persons with incomes other
than wages and salaries-business-
men, professional men, etc.-would
be required to estimate their tax for
the current year and pay it within
the year.
3. Farmers would file declaration
of their estimated taxes at any time
on or before December Is of the
taxable year.
4. All taxpayers would be required
to file final tax returns as at present
on or before the March Is following
the close of the taxable year, and
on the basis of this return, adjust
ments would be made for differences
between the estimated or withheld
tax and the correct tax.
5. Payments made by taxpayers
on March Is and June Is this year
would be treated as payments on
the tax liabilities against 1943 in
come. Taxpayers required to make
declarations on their estimated tax
would file their first declaration for
1943 on September Is, and those
desiring to amend estimates may
file new declarations on Decem-
ber IS.
Lower Victory Tax.
After July l the Victory tax would
be 3 per cent instead of per cent.
Exact formulas are set up for
determining the deductions to be
made by employers from wages and
salaries, and the withholding levy
is computed in two parts, as fol-
lows:
l. Income taxes-17 per cent of
wages or salary in any pay period
above the following exemptions:
Single person. $11 weekly, $23 semi
monthly and SAG monthly; married
person, $26 weekly, $55 semi month
ly and $40 monthly. plus So weekly
for each additional dependent. Such
exemptions for dependents would be
SIG for persons paid on a BIZ
weekly basis, SIT semi-monthly, $34
monthly.
2. Victory tax-3 per cent of
wages or salaries in any pay period
above exemptions allowable as fol-
lows: $l2 weekly. $26 semi-monthly.
$50 monthly-regardless of family
status.
The same withholding machinery
was part of the defeated sRumI
bill. as modified by Representative
Carlson, Republican, of Kansas, who
used the abatement suggestions orig
lnally advocated by~Beardsley Ruml.
chairman of the Federal Reserve
Bank of New York.
Congressional tax experts gave
this specific example of how the
abatement under the House-ap-
proved measure would apply:
A married person with no children
with 1912 net income of $4,000
would have $1,000 taxable at the 6
per cent normal rate and $4,000 af-
fected by the surtaxes these two
figures being arrived at by exemp-
tions and credits from $4,000 al
lowed by law.
Thus, this persons 1912 normal
6 per cent tax would be 6 per cent
OF $1,000 or S488: first bracket sur
tax, l3 per cent of first 81 900 of the
$4,000, or $3.50; second bracket sur
tax, Is per cent of second $4,000, or
$500; third bracket surtax. 20 per
cent of third $4,000 or $500; fourth
bracket surtax, "a per cent of the
fourth $4,000, or $3.50; fifth bracket
surtax, % per cent of the remaining
$500 of the $500 surtax net income,
or 1924. This persons total of nor
NAL and surtaxes is $2,l52.
Abated are the normal tax of $468
and the first bracket surtax rate on
all the surtax net income u3 per
cent of $4,000 which equals $1,l44.
Thus, his total abatement is 1853
plus $l.l44. or $1,612. Subtracting
the latter figure from his 1912 tax
debt of $2,152 under existing law,
he would owe on 1912 income, under
the bill. $40.
Brief Hearing Planned.
Senator George told reporters the
Senate Finance Committee public
hearings-at which Treasury and
joint tax committee experts will tes-
tify-could be completed in one day,
and predicted speedy disposition
of the pasas-you-go legislation in
the Senate.
Senator Clark, Democrat. of Miss
ouri, expressed the opinion a ma
jority of the committee would ap-
prove his own bill. including the
Ruml plan and withholding levy.
He added that his measure will be
offered on the Senate floor If it fails
in committee. The eight Republic
can committee members were ex-
pected to support the Ruml plan.
Mr.. Carlson predicted the modi-
fled Ruml bill would pass the Sem
ate and will be the final bill ap-
proved by the Conference Commit
tee between the Senate and House"
~ In the House voting on the Ruml-
Carlson bill, 1873 Republicans and Il
Democrats we're recorded for it, and
1872 Democrats, II Republicans and
three minor party members formed
the successful opposition.
poro ic Gnlo h., r.Io,,,y