Evening star. [volume] (Washington, D.C.) 1854-1972, 1963-09-25

may exclude from taxable in
come dividends up to $50 a
year ($100 for married cou-
ples). They also may subtract
from their income tax 4 per
cent Of dividends received above
the $50 or 500 exclusion.
The bill would double the
dividend exclusion. to 500 for
an individual and 5000 for a
couple.
The 4 per cent tax credit
would be reduced to 2 per cent
for 1864 and repealed for 1865.
Investment Credit-Under a
law enacted last year to stimu-
late business investment, a
company may substract from
its Federal tax up to 7 per cent
OF the cost of buying plants and
equipment.
In depreciating the cost of
an asset over its useful life,
Tor tax purposes, the company
may claim depreciation allow
ances only up to SO per cent
OF cost. This is because the q
per cent investment credit re-
duced the cost to SO per cent
The bill would let the COM
pany depreciate the full cost
Of the asset.
Sick Pay-PreSent law allows
an employe to exclude from
taxable income up to 500 a
week in sick pay from his en-
ployer. This applies to pay re-
ceived after one week of absence
from work. The bill would allow
exclusion of sick pay only
after an absence of 80 days.
Medical Expenses-The bill
would allow full deduction of
expenditures for medicine and
drugs for those over SIS. Present
law allows deductions for only
such expenses above per cent
Of income.
The bill also would tax in
come money receiver from
medical insurance above the
actual medical expenses.
Casualty LOsses-Under pres
ent law, an individual may de-
duct from taxable income per-
sonal losses incurred through
fires, storms, auto accidents
and thefts. The bill would
allow such deductions only to
the extent that an individual
loss exceeded 500.
Child Care-Working women
now may, in certain cases, de-
duct from taxable income the
costs of caring for their chill
dren. The maximum deduc-
ton is $500 a year.
The bill would raise the
maximum deduction to 5000 if
the woman has two or more
children to be cared for. It
also would raise the maximum
age for the children's eligibility
from IL to Is and liberalize
the rules in several other ways.
Stock OptiOns-Some COM
panies give key employees the
right to buy their stock at a
fixed price. If the market price
rises, the employee buys the
stock at the lower option price.
He may then sell the stock on
the market. and his profit in
many cases is taxed at low
capital gains rates.
The bill would restrict stock
options in several ways, includ-
ing a requirement that the en-
ploye will qualify for capital
gains rates only If he holds
the stock at least three years
before selling. In addition, the
option to buy the stock must
not be open for more than five
years, and the option price must
not be below the market price
when the option is granted.
Oil and Gas Depletion - OIL
and gas companies now may
deduct from taxable earnings
2712 per cent Of a property's
gross income UP to SO per cent
Of net income. Companies may
combine wells with high and
low net incomes into a single
property for tax purposes TO
avoid the so per cent ceiling.
The bill would restrict such
combinations for purposes Of
computing depletion allow
ances.
Miscellaneous - Present law
does not count as employee in
come the premiums paid by
employers for group term life
insurance. The bill would count
such premiums as employe in
come for insurance coverage
above $4,000.
The bill would allow persons