Big, Mean, Tough

The 1942 tax bill reached its close to final form. The Senate Finance Committee completed its deliberations, heard the last argument, prepared to put its conclusions into the bill. Now 43,000,000 U.S. taxpayers--25,000,000 more than had to pay under last year's bill--could get a fairly accurate idea of what fighting a war would mean to their pocketbooks.

Income Taxes. Taxpayers can expect to file next March's returns on the basis of:

> Personal exemptions cut from $750 to $500 for single persons, $1,500 to $1,200 for married persons, $400 to $300 for dependents.

> Surtaxes boosted to 10% on the first $500 of net income, 13% on the next $500, and so on up to 82% of net income above $200,000.

A New "Victory Tax," brainchild of Committee Chairman Walter F. George of Georgia, will be collected from payrolls beginning Jan. 1. The rate: a flat 5% on all income above $12 a week, with everybody paying except farm help and domestics. Single persons will get 25% of this tax back after the war, married persons 40%.

There may be further changes in the tax law. But the basic pattern was now set. Adding up income and Victory taxes, citizens could now roughly figure the amount they will have to pay next year.

Net Income* Single Married, No Children Married, Two Children

$1000 $ 107 $15 $14 2,000 333 188 71 4,000 829 647 507 6,000 1,401 1,173 1,005 8,000 2,052 1,780 1,583 10,000 2,783 2,467 2,242 25,000 10,644 10,035 9,632 50,000 28,058 27,075 26,461

Big Enough? As it now stands, the tax bill will raise $26,000,000,000 for the government from individuals, from corporations, from excise levies, etc. Chairman George, a kindly man, called it "the biggest, meanest and toughest tax in U.S. history." It was still not tough enough to suit the Treasury.

The new bill will provide only about one-fourth of the money the U.S. will spend on the war next year. Nor will it close the "inflationary gap"--between purchasing power and available civilian goods --that threatens the U.S. cost of living. President Roosevelt has estimated this year's spread at $20,000,000,000. If the inflationary gap is to be closed, more bonds will have to be bought--voluntarily or otherwise--or still bigger, meaner and tougher tax bills lie ahead.

* After deductions of 10% of gross income for charity, etc., but before deducting personal exemptions.

This file is automatically generated by a robot program, so reader's discretion is required.