The Daily Alaska empire., 1945-02-09

will the effectiveness of the act. There can be great variation. I admit the appropriation reached for inclusion in this bill was not based on adequate detailed figures. In response to question from another Senator) I do not think that 10 per cent of collections would be an unreasonable figure for administra- tion costs in the first years.
 Senator Frank Whaley-Is there any difference in rates of tax ap- piled to seasonal workers and resi- dents; is there discrimination? Does the tax rate ''penalize" non-resi- dents?
 Prof. Harsch-There is no per- centage rate of tax applied to sea- sonal workers, they are taxed by income brackets Senator Cochran-Would not an average rate on seasonal work CTS be about 2 per cent? Prof. Harsch-Less than per cent, I believe.
 Senator Coffey-Would the $25 fishing license tax and $5 school poll tax be eliminated for season. al workers?
 Prof Harsch-No. Reaching Tax Rates Senator Don Carlos Brownell- How were the rates of tax arriv- ed at?
 Prof. Harsch-They are the rates as most frequently applied in states having the income tax law.
 Senator Browne1l-Were the rates influenced by anticipated overall revenue? Prof. Harsch-That was only one of many determining factors. Senator Brownell-Why was not the graduation of rates continued above $lO,OOO?
 Prof. Harsch-That seemed a reasonable figure and beyond that amount it would not have been prac- tical to construct the computed tax tables that were desired.
 Senator Joe Green-How does the $20 exemption figure work? Prof. HarSch--In that instance we have departed from the Federal theory in order that the exemption will be equal for everyone, in actual tax dollars. Instead of allowing an exemption credit of $1000 against the net income to arrive at a tax able net income to which the tax rates are applied--this bill adopts a system whereby the tax rates are applied to the entire net in- come, then the exemption credit, of S20 for the individual taxpayer, $20 more for spouse and each depen- dent, is deducted from the amount of the computed tax. This system is in use in several States and is considered equitable. It makes thel number of dollars of tax exempted the same for all, big and little tax payers alike. J
 It is the same as eXempting the first S1,000 of income. By this sys- tenn the exemption credits are talk en out of the bottom tax bracket. which all pay; the Federal system takes the exemptions off the top bracket and gives the large tax payer a larger actual tax dollars ex- emption.
 Senator Coiiey-What present taxes would be repealed if this bill passes?
 Prof. Harsch-Territoria license taxes-a long list; the mining net income tax and the net income tax on salmon fisheries.
 Senator Cochran-This bill would not affect the present 3 per cent gross tax on the income of gold mines?
 Prof. Harsch-No, nor the case taxes on salmon.
 Senator Cochran-Would the gold and salmon taxes be deduct able?
 Prof. Harch-NO.
 Senator Yyng-Is there any dang CT, that, if this act passes, it might be declared unconstitutional by the courts?
 Prof. Harsch-Under your En- abling Act, there would seem to be no dancer of such occurrence.
 Senator Coffey-Must all resi- dents make a return? fsr
 Prof. Harsch-All residents with a. gross income of $500 or more must file a return.
 Senator Coffey-What is this pro- vision regarding estimated returns? Are estimates of income required, the same as for the Federal h. come Tax? p
 Prof. Harsch-Only if the Cover nor of the Territory should so dir at 11xy ,<,1a