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

These are the main provisions
Of the tax reduction and reform
bill scheduled for passage by
the House today:
Individual Rates-Rates now
range from 20 per cent on the
first $4,000 Of taxable income
$4,000 for married couples fill
ing joint returnS) to 81 per
cent on income above 5000, 900
($400, 900 for couples.
The bill would cut rates in
two steps to a range Of IA per
cent on the first $500 of in
come 81, 1000 for couples) to 10
per cent on income above $780,
900 ($200,000 for couplesD
Rates would be reduced in all
income brackets. The average
reduction would be 20 per cent,
with the amount of reduction
ranging from IA to 80 per cent.
These reductions would be-
come fully effective January /.
1865. About two-thirdS of the
reductions would take effect
January /, 1864, when rates
would range from 16 to II per
cent.
Corporation Rates-Corpora
tions now pay 80 per cent on
the first $25, 1000 of earnings and
So per cent on earnings above
$25, 900.
Starting January /, 1854, the
bill would cut the rate on the
first $4,000 to % per cent.
On the same date, the rate
for earnings above $4,000
would drop to so per cent. A
= further reduction to 48 per
cent would take effect January
/, 1865.
Benefits Of these reductions
would be delayed for some
corporations by a provision &C.
celebrating their tax payments.
Corporations owing taxes over
100000 would pay on a more
nearly current schedule than
they do now. They now pay
only half their taxes during
the year Of earnings. Accelera-
ton would take place gradually
over seven years.
Capital Gains - When an
asset is held more than six
months, any profit obtained
from its sale now is taxed at
half the ordinary rate, to q
maximum tax of Is per cent.
The bill would continue to
apply these rates to assets held
between six months and two
years before sale, and for some
kinds of assets held longer than
two years.
But for most kinds Of assets
held more than two years, the
profit from sale would be taxed
at 40 per cent of the ordinary
income rate, to a maximum of
81 per cent.
Minimum Standard Deduc-
tion-Under present law, an in
dividual taxpayer may itemize
deductions for such OUTLAWS as
State and local taxes, interest
payments, charitable contribu-
tons and some medical ex-
penses. Or he may instead take
a flat standard deduction Of 10
per cent of his income, to a
maximum of $1,000. Deduc-
tons reduce the amount Of in
come subject to tax.
The bill would offer a third
alternative. which would bene-
fit those with low incomes. The
taxpayer could take a standard
deduction Of $500 plus 500 for
each dependent, to a $1,000
maximum.
A couple with two children
taking the 10 per cent standard
deduction now pays tax on in
come over $2,667. With the
minimum standard deduction
this couple would deduct $500
Adding four personal exemp.
tons at 5000 each, the couple
would be exempt from tax on
income below $4,000.
State and Local Taxes-Tax-
payers who itemize deductions
now may deduct State and
local taxes on income, real
estate, personal property, gas
oline, alcoholic beverages, auto
licenses, tobacco in many cases
and q variety of sales taxes
The bill would disallow de-
auctions Of taxes for gasoline
auto licenses, alcoholic bever-
ages, tobacco and such selec-
tive excuses as those on movie
tickets.
Deductions still would be
allowed for real estate, prop
erty, income and general sales
taxes.
MISREPRESENTATION now