Evening star., 1944-02-12

money that eventually must DC pdiu
10 the tax collector anyway.
It is important to know that not
Ill Government issues Of bonds or
notes can be used for tax payments.
But wherever these securities carry
\ clause requiring a certain interval
If notice before they are redeem
ible for cash, the taxpayer can plan
his payments and redemptions in
such a way as to lend the money
now to the Government and use 1t
six months hence or even two or
three years from now to meet tax
payments. ..
Many corporations have for sew
eral years now bought notes or bonds
for this very purpose and there is
no reason why individuals should
not be educated to apply the same
method to their personal affairs.
There is less opportunity for it now
that taxes are paid currently out OF
this years individual earnings but,
on the other hand, there are many
taxpayers who know now that their
incomes for the next year or two
are fixed and that certain amounts
will have to be paid in income taxes.
Such individuals can help their
Government by investing in bonds
or notes for the relatively short
period between this month and
future tax payments.
Emphasis on Long Term.
It is, of course, true that the
Treasury would like as many in
dividuals as possible to buy bonds
and hold on to them until maturity
and especially is it urged that small
denomination bonds be bought and
held. There is no gain to the Gov
ernment if persons buy bonds only
to cash them in quickly. Hence the
emphasis has been placed on long
term holding. But this does not
mean that those individuals who
have bought to their limit on long
term bonds should not consider
what they can do to help finance
the war by lending the very funds
they are going to pay Uncle Sam in
taxes anyhow in the next year or
two.
Some kinds of Government secu
rites are accepted for tax payments
directly without the formality of
redemption and the citizen can find
out at his bank which kinds are
eligible for such use. Customarily
these do not bear much interest.
But there is one kind of long
term bond in the Fourth War Loan
which is to be purchased at a price
of 500 and is due 12 years from
now and bears interest at 21a per
cent and can readily be used for in
heritance tax purposes. The Treas
ury circular says of this particular
issue:
ANY bonds issued hereunder
which upon the death of the owner
constitute part of his estate, will be
redeemed at the option of the duly
constituted representatives of the
deceased owners estate, at par and
accrued interest to date of payment
provided ca that the bonds were
actually owned by the decedent at
the time of his death, and that the
Secretary of the Treasury be au-
thorized to apply the entire proceeds
OF redemption to the payment of
Federal estate taxes"
Use for Inheritance Tax.
This means that the executors of
an estate can authorize the Treasury
to use such bonds to pay inheri-
tance taxes. But between now and
the year when death occurs, a siz-
able income from interest can be
accumulated. 1t is true that this
income is subject to current taxes.
but nevertheless there are many
persons who know that their heirs
will be confronted with high in
heritance taxes. There is every
reason why this money can be
loaned at interest to the Federal
Government and, of course, if it is
desired to use the funds in the
interim for some other contingency.
the bonds can be redeemed at the
holders option after six months
have elapsed from the date of pur-
chase, and then only one months
written notice to the Treasury is
required to assure prompt cash pay
ment for the bonds.
The Treasury specifies that not
more than 100000 of these bonds