The Waterbury Democrat. [volume] (Waterbury, Conn.) 1917-1946, 1943-06-17

!
March IS, 1914, the other half
March Is, 1945.
Under the first -Windfall"
clause of the new laf Gf the civil
ian earned more last year than
this year, the taxpayer must first
determine the amount by which the
tax on 1912 income is greater than
the tax on 1913 income, this excess
then being carried over and added
onto the taxes on 1943 income. At
| the same time, the tax on 1943 in
come is increased Is per cent.
That's the bills way of saying that
it forgiveS rs per cent of the lesser
years taxes.
NO CARRY-OVER FOR SOLDIER
Assuming that you now under
stand in a vague way how the peo-
pie who concocted this involved law
figure on treating the civilian, con-
slider how this ex-civilian is to be
| treated if he has been in the armed
services at any time in 1912 or 1913.
In the first place, for service men,
| there is to be no carry-over insofar
as the earned income portion of
| 1912 tax liability is concerned, when
1912 taxes exceed 1913 taxes. The
earned income, you'll recall, is wages
Oh salary up to $4,000, paid you for
personal services rendered. Income
from dividends, rents and the like
is not earned income.
The effect of this provision for
service people is to cancel the car
ry- over which civilians have to pay,
though the Is per cent addition to
| the 1943 tax must be computed and
| paid, just as by civilians.
There is, however, an extra $500
exclusion for everyone in the armed
services, in addition to the usual
exemptions granted civilians-$5OO
for those who are single, $1,000 for
! those who are married or head of
family, plus $3.50 for each DEEPEN
dent.
Since people in the armed services
don't have to report as income any
allowances they get for food, shell
ter and subsistence, the effect of
all these exemptions is that single
men up through the rank of first
lieutenant in the Army or lieuten-
ant junior grade in the Navy, and
married men up through the ranks
won't have to pay any income taxes
at all in 1913, unless they have I'M
earned income from dividends,
rents, royalties, annuities, trust
funds, inheritances and so on, pay
able to them from sources connected
with their civilian past.
NO WITHHOLDING TAX
Furthermore, there is no with
holding tax for anyone in the armed
services-no Victory tax or payroll
deduction which the civilians are
subjected to- And since taxes on
1943 income for servicemen below
the ranks mentioned above will in
any extra 25 per cent increase on
1943 taxes for them to pay, it being
impossible to compute a Is per cent
increase on an income tax which
mas already been Cancelled out to
nothing.
That isn't the best of it, either
There being provision in the new
tax bill for the payment of refunds,
some time after March Is, 1914. the
government will actually pay back to
many people in the armed services
income taxes they have already paid
to the government on March Is and
June Is, 1913, as taxes on their 1912
incomes. The maximum benefit
which service man could derive
from the 100 per cent cancellation
of his 1912 taxes, through the work
ing out of the new law as described,
will be about $4,000, which is the ap-
proximate tax for 1912 earned in
come of $4,000.
All this should be pretty welcome
news to the men and women IN
service, and their dependents.