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7 8 T m C m I HOUSE OF R E P R E S E N T A T I V 7 E S R E P O r : T1 8 t S e s s i o nA H O N o . 8 7 1

THE REVENUE BILL OF 1 9 4 3

N O v E M B E R 1 8 , 1 9 4 & T - C o h n m i t t e d t o t h e C o i u m i t t e e ' o f t h l e W h o 1 e l o u s e o n t h es t a t e o f t h e U n i o n a n d o r d e r e d t o b c p r i n t e d

M r . D O U G H T O N , f r o m t h e C o m m i t t e e o n W a y s a n d M e a n s , s u b m i t t e dt i l e f o l l o w i n i gREPORT

[ T o a c c o I I I I ) n y V H I . 3 6 8 7 1T h e C o m m i t t e e o H l Ways a l n ( l M { n e a n s t o whom w a s r e f o m r e d t h l e b i l l( H . R . 3 6 8 7 ) t o p r o v i ( l e r e v e n u e , a n d f o r o t h e r p u r p o s e s , h a v i n g h a dt h e s a - m e u n d e r c o n s i d e r a t i o n , r e p o r t i t b a c k t o t h e H o u s e w i t h o u ta m e n d m e n t a n d r e c o m m e n d ( l t h t i t t h e b i l l d o p a s s .I n p r e p a r i n g t h i s t a x b i l l , y o u r c o m m i t t e e h a s g i v e n c o n s i d e r a t i o nt o t h e f o l l o w i n g f a c t o r s :( 1 ) T h e n e e d f o r a d d i t i o n a l r e v e n u e .( 2 ) T h e i n f l a t i o n a r y p r o b l e m .( 3 ) T h e p r e s e n t t a x b u r d e n .( 4 ) T h e n e c e s s i t y f o r 3 i A n p l i f y i n g t h e p r e s e n t t a x s y s t e m .( 5 ) T h e , p o s s i b i l i t y f o r e c o n o m y i I I g o v e r n m e n t a l e x p ~ i d i t l u r c s .

( 1 ) T i m , NEED F o i t A D D I T I O N A L R E V E N U EI n t h e S t a t e m e n t b y t h e P 1 r e s i d e n t o l n t h e S t u m i n a t i o n o f t h e 1 9 4 4B u d g e t , r e l e a s e d A u g u s t 1 , 1 9 4 3 , i t w N ' a s e s t i m a t e d t h a t f o r t i m e f i s c a ly e a r 1 9 4 4 F e d e r a l e x p e n ( d i t u r e s , e x c l u d i n g d e b t r e t i r e m e n t a n d t r u s tf u n d d i s b u r s e m e n t s , w o u l d t o t a l $ 1 0 4 , 0 0 0 , 0 0 0 , 0 0 0 . O f t h i s a m o u n t ,$ 9 7 , 0 0 0 , 0 0 0 , 0 0 0 w e r e w a r e x p e n d i t u r e s . T r i e n e t r e c e i p t s were , e s t i -m a t e ( d a t $ 3 8 , 0 0 0 , 0 0 0 , 0 0 0 f o r t h e f i s c a l y e a r 1 9 4 4 .B a s e d u p o n t h e f i g u r e s f o r t h e i f i r s t q u a r t e r o f t i h e c u r r e n t f i s c a ly e a r , F e l e r a l r e c e i p t s a r el l C u n i l n a t a n a n n u a l r a t e o f o v e r $ 2 , 0 0 0 , -0 0 0 , 0 0 0 i n e x c e s s o f t h e r e v i s e d b u d g e t e s t i m a t e o f A u g u s t 1 , 1 9 4 3 ,w h i l e e x p e n d i t u r e s a r e $ 1 5 , 0 0 0 , 0 0 0 , 0 0 0 b e l o w . A l t h o u g h i t i s r e c o g -n i z e d t h a t t h e r e c e i p t s ( I u r i l g t h e f i r s t q u a r t e r were i n c r e a s e d s o i n e -w h a t b y n o n r e c u r r i n g r e v e n u e s , a n d t h a t l w a r e x p e n d i t u r e s may r i s ea b o v e p r e s e n t l e v e l s , i t s e e m s p r o b a b l e t h a t t h e c h a n g e s f r o r n t h ep r e s e n t l e v e l o f r e v e n u e s a n d e x p e n d i t u r e s n e c e s s a r y t o b r i n g t h e y e a r ' sf i n a l r e s u l t i n t o a g r e e m e n t w i t h t h l e A u g u s t 1 B u d g e t s u m m a t i o n a r eo f s o g r e a t m a g n i t u d e s t h e d e f i c i t f o r t h e y e a r may h ) r e d u c e d f r o mt h e B u d g e t f i g u r e o f $ 6 6 , 0 0 0 , 0 0 0 , 0 0 0 t o n o t m o r e t h a n $ 5 7 , 0 0 0 , 0 0 0 , 0 0 0 .1

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THE REVENUE B I L L O F 1 9 4 3T h e r e f o r e , f r o m t h e r e v e n u e s t a n l l p o i n t , t h e n e e d f o r a d d i t i o n a l -x ' e v e n u c s h i a s a p p a r e n t l y b e e n e x a g g e r a t e d ; a n d l o w e r g o v e r n m e n t a le x p e n d i t u r e s t h a n e s t i m a t e d w o u I ( l r e d u c e i n c o m e payments, t h e n e ti n f l a t i o n a r y g a p l ) , a n d p r e s s u r e on p r i c e s .I f o u r ( e x p e ( l n i t u r e s r e a c h 1 n o m o r e t h a n $ 9 6 , 0 0 0 , 0 0 0 , 0 0 0 ' t h e y w i l ls t i l l b e f a r g r e a t e r t h a n t h o s e o f t h e U n i t e d K i n g d o m a n d n C a n t a d a .I t i s ( s t i m a t e d ( t h a t t h e t o t a l e x p e n ( l i t u r e s f o r t h e U n i t e d K i n g d o mw i l l a m o u n t t o $ 2 3 , 0 0 0 , 0 0 0 , 0 0 0 f o r t h e f i s c a l y e a r 1 9 4 4 , w h i l e f o rC a n a d a t h e t o t a l e x p e n d i t u r e s f o r t h e f i s c a l y e a r 1 9 4 4 ^ r i l l a m o u n tt o $ 5 , 5 0 0 , 0 0 0 , 0 ) 0 0 .Y o u I r c o m i n i t t e T e g a v e s e r i o u s c o n s i d e r a t i o n t o t h e q u e s t i o n o fr e d t l u t i o n l o f g o v t ' 4 I i i n e l i i t a l e X p e n d l i t l l r e s , s o f a r t a s s u c h r e d l i c t i o nw o l l l n o t i n t e r f e r e W i t h t h e w a r e f f o r t . I n t h i s c o n n e c t i o n , t h eB i l d g t D i r e c t o r w a s c a l l e d b e f o r e c t h l e c o m m i t t e e t o e x p l a i n t i l ep r e s e n t n e e d f o r s u c h l a r g e e x p e n d f i t u r e s . I t i s b e l i e v e d t h a t ac o n s i d e r a l 1 ) 1 e r e d t u l t i o t l o f e x p e n d i t u r e s b e l o w t h e e s t i n i a t e m a y . h i ea c c ( m l l ) l i s h e d t b r o l l u g h 1 J o i n t a c t i o n o f t h e l e g i s l a t i v e a n d e x e c u t i v e( I ( e ) p a r t l l e n t s . T h i s w o u l d l e s s e l l t i l e t a x b i l ( l d e l u w h i c h o u l r C i t i z e n sa r e ( a 1 l l e ( l t j ) o l l t o n e e t .

( 2 ) T j i E I N F L A T I O N A R Y P R o B P L E MY o u i r c o m m i t t e e g a v e c t a r e f u l c o l s i ( l d e r a t i on t o t h e i n f l a t i o n a r y g a l )a n d i t s e f l e . c t O i l p r 1 c e ( o i l t r o l .I t w a s f o u n d t h a t w h i l e t h e r e w a s l i t t l e v a r i a t i o n a m o n g e s t i m a t e s o ft o t a l i l n c o m - l e p a y l l m e n t s t o i n d i v i d u a l s f o r 1 9 4 4 , o r among e s t i m a t e s o ft h e g r o s s i n I f l a t i O l n a r y g i i l ) , i a f t e r d l e l d t i c t i o n l o f 1 ) p r s o n l t i l t a x e s a n l ( l O i l -S i n n - e r e X p ) e i l ( l i t I l l n ( ' S , t t ' r e ( were c o I n s i d l e r a l ) l ( d i t i f e r e n c ' s a m o n g t h ee s f t i m n a t e 8 s f h i r i s h e d t o t h e ( c o l m n i t t t e e b ) y o f f i c i a l S o u r c e s o f t i l e n e ti l l a t i i o n a r y g p l ) , a f t e r a l l o w i n g f o r r e g i l l a r f o r i l l s o f s a v i n g s s u l c l l a sW a r b o n d s a i i d l i f e i l l s t i l l i s a c e a n d o t l i e r n o n i n f l a t i o n a r y c o n s u i n e r( x p i tl ( t i r i i i ( ' S . T h l l e s e e s t i m a t e s o f t i r , n l e t g a l ) v a r i e ( f r o m a b o u t$ 1 0 , 0 0 0 , 0 0 0 , X 0 0 0 t o o v e r $ 2 5 , 0 0 0 , N O ) 0 0 p 0 , 0 i 0 0 c ri u p o n t h l e c l a s s i -f i c l t i o n l l o f s a v i l ' s b e t w e e l l t h o s e ( ' t e n i p o r r i l y f l a n d t h o s e p e r l n l l t i a i e t l yS e t a s i ( l e . 4 o r e o v e r ( ' , r i t . wa s r e a d i l y a p l a t r e I t t h a l ' t t h e ( ' t r r e I ti n f l a t i o n a r y g a p i s S i l a l l i l nm n l l i t l i ( l e C o m a l l ) r e ( l w i t h t h e g r a n dt o t i l o f more t h n l $ 1 0 0 M , 0 0 0 0 N 0 , 0 0 0 o f a c ( c u m l i a t ( ' ( 1 s a v i n g s i n t h l eh a n d s o f i n d i v i d u a l s , ; i n t h e t o r n i o f W a r S a v i n g s o ) s 1 1 ( 1 , ( c a s h s u r -r e n d ( e P r v a l u e o f l i f e i n s u r a n c e , s a v i n g s d e p o s i t s , a n d i d l l e c u r r e n c y a n d( d e m a n d l d I d e p o s i t s , o f w v i i c h i e $ 5 0 , 0 0 0 , t ) 0 0 , 0 0 ( t o $ 6 0 , 0 0 0 0 0 , 0 0 ( ) 0 r ( e p r e -s e t n t s p o t e n t i a l e x c e s s l b l u y i n l g l p o w e r b e c a u s e t h i s a n m o u i n t i s c l e a r l y i ne x c ' c ; s o f l o r o n a l S a v i n g s .T h e c o n c l u s i o n o f t h e c o m m l l l i t t e e was t h a t m a i n t e n a n c e l ) y t h l l (G C o v e r n m l i e n t o f t h e p r o p e r p s y c h o l o g y , a n ( l f r e e d o m n f r o m t f e a r o fi n f l a t i o n , o n t h e p ) a r t o f e v e r y c o n s u m e r , i s c o n s i d e r a b l y more i l y m -n O r t l u n t t a l m i t h l e a b s o r p t i o n o f c u r r ( ' e u t e X c e s s h u l y i i g p o w e r t l r o l i g ha ( 1 l d i t i o n a l t a x e s . T h e m c o m m i t t e e i s f i r m l y c o n v i n c e d t h i a t t h e p r o p e rp s y c h o l o g y ( ' t a l l b ) e n m m i m t a i d e d o n l y ' b y s t r i c t . e ( o n o n m i - . 8 i n g o v e C r n n i e n t i t l ie x p e n d l i t u o r e s , t h r o u g h e f f e c t i v e p r i c e c o i l t r o l , r a t i o n i n g , a n d w a g e (c o n t r o l . ( 3 ) T i n E P I R E ' S E N ' i T Tr x B ' U R D E . NY o u r c o m m i t t e e h l s e n d e a v o r e d t o r a i s e a s m u t c h l r e v e n u e a s i t i sb e l i e v e d c a n r e a s o n a b l y b e b ) o r n e b y t h e t a x p a y e r a t t h i s t i l l n w , w i t h o l i tu n d u l y d i s t u r b i n g o u i r e c o n o m l i y r .

2

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THE REVENUE BI'L OF 1943(a) INDIVIDUAL INCOME-TAX RATES AND EXEMPTIONS

O u r p r e s e n t i n d i v i d u a l i n c o m e - t a x r a t e s a n d e x e m p t i o n s a r ef o l l o w s :1 . N o m i n a l t a x , 6 p e r c e n t .2 . S u i t t a x , 1 3 t o 8 2 p e r c e n t .3 . E x e m p t i o n s f o r n o r m a l a n d surtax:

3

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S i n g l e p e r s o n , $ 5 0 0 .M a r r i e d p e r s o n , $ 1 , 2 0 0 .C r e d i t f o r d e p e n d e n t s , $ 3 5 0 .G r o s 5 V k i c o i y t a x , 5 p e r c e n t .V i c t o r y t a x e x m p t i o n s , $ 6 2 4 .V i c t o r y t a x c u r r e n t c r e d i t :( a ) I n t h e c a s e o f a s i n g l e p e r s o n , 2 5 p C r C e n t o f t h eV i c t o r y t a x O r $ 5 0 0 , w h i c h l i v e r i s t h e l e s s e r .( b ) 1 t h l e e a s e o f a h e a d o f f a m i l y , o r m a r r i e d p e r s o n s ~f i l i n g o n e , r e I t u r n , 4 0 p e r c e n t o f t h e V i c t o r y t a l x o r $ 1 , 0 0 0 ,w h l i c h e v e r i s t h e l e s s e r .( c ) F o r e a c h d e p e n d e n t t , 2 p e r c e n t o f t h e V i c t o r y t a xo r $ 1 0 0 , ' w h i c l h e v e r i s t h e l e s s e r .

( b ) INDIVIDUAL INCOME TAX BURDENI t i s b e l i e v e ( t h a t s o f a r a s t h l e i n d i v i d u a l i n c o m e t a x i s c o n c e r n e d ,w e a r e a p ) p r o a c h i n g t h e p o i n t o f d i m i n i s h i n g r e t u r n s . Few p e r s o n sr e a l i z e t h a t u n d e r t h e e x i s t i n g l a w , w i t h t h e c a r r y - o v e r o f t h e 1 9 4 2 t a xr e q u i r e d t o b e i p a i d i n 1 9 4 4 - a n d i n 1 9 4 5 , n o i n d i v i d u a l , n o m a t t e r howh i g h h i s i n c o m e , w i l l h a v e l e f t m o r e t h a n $ 2 5 , 0 0 0 , a s s u m i n g h i s i n c o m er e m a i n e ( l c o n s t a n t a n d h i s u i n c a n c e l e d t a x i s p a i d o u t o f c u r r e n t i n c o m e ,T h e f o l l o w i n g t a b l e i l l u s t r a t e s t h i s p o i n t :

TABLE 1 . - E x i s t i n g i n c o m e - t a ( x b u r d e n f o r 1 . 9 4 4 a n d 1 9 4 5 , i n c l u d i n g n e t V ' i c t o r y t a xa n d o n e - h a l f o f u n f o r g i v e n 1 9 , 1 2 t a x ( a s s u m i n g n o c h a n g e i n n e t i n c o m e ) - - - l a r r i e dp e r s o n , n o d e p e n d e n t sl I u c o n m o ,n o t V i c t o r y ,a n d l o n e t - 1 1 1 1 fu u i f o r g i v e nt a x I

$ 1 . 2 86.287 . 0 41 4 . 6 22 1 . N7 9 .1 5 . 6 7 . 382 0 5 . 4 53 2 f 5 . f

4 4 5 . 7 87 1 : 3 . 119 8 7 . 2 01 , 2 9 7 . 281 , n 6 1 . 3 61 , 1 1 7 1 . 4 42 , 3 3 . 5 . ' A 32 , 7 3 5 . 6 25 , ( 0 3 9 . 7 8

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p e r c e n t t0 , 2 1 3. 8 3 7. 9 9 21 . 4 6 21 . 7 7 36 . 2 8 57 4 31 0 . 2 7 21 3 . 0 2 4

1 4 . 8 ' ) 9 '1 7 . 8 X 2 719. 7 4 42 1 . 6 2 12 3 . 0 9 0 )2 4 . 6 4 325.99 , 5 02 7 . : 3 5 4 1 '33 . G 9 8

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8.72* 7 4 : 3 . 7 27 9 2 . 0 69 8 5. 3 P1 , 1 7 8 . 7 21 , 4 2 0 . 7 21 , 6 4 2 . 6 21 , 7 5 4 . 6 52 , 1 7 4 . 3 9 )

2 , f 6 i 5 4 . 2 2 23 , 2 ' 8 6 . 8 94 , 0 1 2 . 8 04 , 7 ( 2 . 7 26 , 3 Y 3 . 6 46 0 , 2 8 . 5 66, 6 6 4 . 4 77 , 2 # 4 . 3 89,960. 2 2

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$ 2 0 , 0 0 0 . - - - - -$ 2 5 , 0 . ---------. $ 1 1 , ) - --$ 6 0 , M { ) ( -$ 1 0 , 0 0 0 . - - - - -

$ 2 . 4 1 A , 0 0 0----$ 5 ( 6 , ( X ) - .$ 7 0 , 0 0 0t f o , c X ) - - - .. $ I 5 0 , 1 ) ( 8 ) -$ 2 1 1 0 , 0 t X . ) ($ 1 , 0 0 0 8 , O } 0 .

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$ 7 , 9 0 6 . 4 . 51 1 , 1 8 7 . 1 11 4 , 7 1 0 . 7 8Z 2 , 1 i ) 3 . 1 1. 1 0 , 2 , 4 ( 0 5 8: 3 8 , S , 5 . 0 34 7 , S O S . I l 95 7 , ( 0 8 . 2 46 ( 1 . 7 2 5 . 8 07 6 1 . 9 1 . 8 01 2 7 , 1 5 5 . 1 31 7 8 , X 8 : 3 . 4 12 3 1 , 1 0 7 . 6 94 9 2 , 4 9 ( 1 . 5 87 5 3 , V 2 A ) . ( W )1 , ( 8 ) 5 , 7 5 0 . ( O2 , 0 1 1 . , 7 . 4 ) . 0 ( 15 , 0 4 5 , 7 5 0 . ( X I

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61. 4 8 1( 1 4 . 7 5 96 S . 2977 1 . 3 7 27 1 . 1 3 97 ( 0 . f 9 1X 1 . 7 7 08 9 . 4 2 1(2 . - 4 4 308 . 4 9 1 )101.4 3 3M. 5 7 5100. 7 8 71)0. 9 1 5

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$ 1 2 , 0 9 3 . b i1 3 , 8 1 2 . 8 91 6 , 2 8 9 . 2 ' 21 7 , 8 3 0 . 8 01 9 , 76 . 4 22 1 1 4 4 . 3 72 2 , 1 9 1 . 8 12 2 , 01. 7 62 3 , 2 7 4 . 2 02 3 , 4 ( 8 . 1 42 2 , 8 4 4 . 8 72 1 , 166. 691 8 , 9 ' 2 ' 3 17 , 3. 4 2- 3 , 2 6 0 . ( m )- 6 , 7 5 0 ( . ( )

-45,760. ( K I

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THE R E V E ) N I J E B I L I L OF 1943O t h e r t a b l e s r e l a t i n g t o t h e a m o u n t o f u n f o r g i v e n t a x , a n d t o t i l e1 9 4 4 a n d 1 9 4 5 t a x b u r ( l e n i l l t h e c a s e o f a s i n g l e p e r s o n a n d a 1 m a r r i e d

p e r s o n w i t h t w o d e p e n d e n t s w i l l b e f o u t i d i n t h e A p p e n d i x , t i l l e s1 6 , 1 7 , a n d - 1 8 .I t N v i l l b e r i o t e d f r o i n t h e a l ) o v e t a l ) l e t h a t a m a r r i e d p e r - s o n w i t h a$ 1 0 , 0 0 0 n i e t i n c o m e w i l l h a v e $ 7 , 2 6 4 . 3 8 l e f t a f t e r F e d e r a l i n c o m e t a x e s ,a , $ 1 0 0 ) 0 0 0 n e t i l l c o m e , $ 2 3 , 4 0 8 . 1 4 l e f t a f t e r 1 F e ( d e r a l i n c O m e t a x e s ; i l lt b e, c a s e o f a t l i e t i l n c o m l - e o f $ 1 , 0 0 0 , 0 0 0 t h e t o t a l F l e l e r a l i f l C O f l l C t a xw i l l v X c e ( e d t h e l n e t i l i c O I l e b ) y o v e r $ 5 , 0 0 0 .T ' h e a b o v e t a b l l e ( d o e s n o t i n c l u d e t i l e S t a t e i n m o m e - t a x b ) u r ( l e i . T h ef o l l o w i n g summary i n ( l i c a t e s t h l e t o t a l s e d e l - a l a n d l S t a t e i l n c o m ' e - t a xb u r d e n i l l s e l e c t e d c t i s e s :T A i l l , 2 ' C o m b i n e d F e d e r a l a n d S t a l e i n c o m e - t a x b u r d e n , c a l e n d a r y e a r 1 9 4 4 ,m n a r r i e d

O } e o r g i a N o r t h Ne w Y o r k.luiesoea W I s c o n s i nN e t I n c o m e a n d C a r o l i u a a n d ( 1 a n d a n dF e d e r a l a n ( d F e d e r a l F e d e r a l F e d e r a lF e d e r a l$2,000--..2--2 0 ' 2 0 6 $ 2 0 1 $ 2 0 9$ .0-1(X0)., X191 9 o 1 , 4 I i 1 , 0 1 3 7$10,000-)..--....-------- 2 , 5 0 2 , 9 . 9 2 , 1 4 7 2 2 , 0 1 3 2 9 , 1 4$100,-000-tO.76.( 1 2 7 7 , 0 3 2 7 f i , 9 4 1 7 6 , 7 7 1 7 7 , 0 8 1$1,0),X-)l--1,5 , ( 6 4 4 1 , 0 0 1 , SW 1 , 0 0 5 , 0 O 1 , 0 0 5 , 6 2 1 1 , 0 0 4 , 2 0 1

I t s h o u 0 1 d ( 1 b e i m o t e ( , i n a ( l ( h i t i o n , t h a t t h e s e f i g u r e s ( l o n o t i n i c l u d e 1s o c ; i a l - s e c u r i t y t a x e s , o r F e d ( l e i r a l a n d S t a t e e x c i s e a n ( l s a l e s t a x e s , o rS t a t e p ) r o p e I ' t y t a x e s , a i l l o f w h i c h make t h e d i r e c t i n c o m e , t a x m o r eb u r d e n i s o m t l e .I n t h i s ( c O t l i l ( ( t i o n , o n e f e a t l t u r e i t i t h e r e c e n t d e v e l o p m e n t o f A m n e r -i a n l l t a x ( e s , c s p ( ' C i i l h l y u n d e r t h e s t r e s s o f w v a r , l h a s l h e e n t h i e g r o w i n gr e l i a n c e o i i d i r e c t t a x e s a s - ( r a i n s t , t a x e s o I l ( t i s u l m l ) t i o n . N o t o n l yd o e s t h e i n c o m e t a x 1 ) u t g I ' v i a t , e m p h a s i s o n l t l l e t o t a l a m o u t i t o f t a x e st h a t o n 1 e n 1 1 i u s t . p a 3 y b u t i t x ( e T t s l i t t l e r e s t r a i n t O i l t h e l i s e o f l u x u r yi t ( 1 1 1 5 ; . S i g i l i f i ( a r i t n y , C i n a d a t c o l l e c t s 3 2 . 4 p e r c e n t o f h i e r t a x e s b yl e v i e s o i l ( . 0 1 i s u t l l ) t i O l l , 1 1 1 1 d G i e a t B i l t - a i n i 2 - 3 . 9 p r e v i ' e t , w l i l e t i h eL i t f i t d S t l a t ( 5 l i t t h l e p r e e S m i t C o l l e c t s 0 1 1 1 y 1 8 . 8 1 ) e I r c e l t i l l o l n s u m l ) t i o nt a x e s , - 1 1 ( l e r a l , S t a t e , a i d L o c a l . The l ) r o p o s e d c h a n g e s w i l l l i f t t h i s) e ' i ' ( ' ( ' 1 1 i t H i t o 2 1 .T h ' i s i i d ( l i c a t e s t h a t t h e b u r d e n o f d i r e c t t t a x e s o n l i n d i v i d u a l s h a sb e e l l i c l r l l e a s i n i g t o o r p l ) i ( l y a n d w i t h o u t l e a v i n g s u f f i c i e n t t i l n e f o rp e o p l e t o a ( l j u s t t h l e i r l d ( I g e t s t o t a k e c a r e o f t h i s i n r e i a s e ( l t a x b u r d e n .The i r I ' e a s e s i l l t h e i n d i v i d u a l i n c o m e t a x f r o m t h e l v e - a \ ' a l r p e r i o da r e s h o w n i l i n t h e f o l l o w h i n g t w o t a b l e s . l I n a d d i t i o n t o t h e r a t ei 1 ( 1 i ' 5 ( ' t S C t a N . ; ) a y e r s h a v e t o m a k e h i g h e r a c t u a l l y p a y i n e i t s , w h i l e i n I -C o l m l ( e i s v i s i i I I ' , a t s a r e s u l t o f p a y i n g o n l c u l r r e i l t i n i c o n l e i l n s t e a ( d o f t h l ep ) a s t y e a r ' s i l l ( n O n o m . ' F l l e f o l l o w i n g t a b l e S h l o w ' S t h l e r e s u l t o t ' i l l C r e a s e s5 1 1 i 1 e 1 9 3 0 a t c e r l t l i I a i l l C o 1 m 1 l e v e l s :

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THE REVENUE BILL OF 1943 5T A B L E 3 - M a r r i e d p e r s o n , n o d e p e n d e n t sTAX PAYABLE IN TAXABLE YEARS

N e t I n c o m e b e f o r e p e r s o n a l Y e a r l y 1 9 4 0 1 9 4 1 1 9 4 2 9 I 4 3 ' 1 9 4 6 ' 'e x e m p t i o n 1 9 3 ( 1 - 3 9$ 1 , 2 0 0 . . . .------------ 2 1 . 2 8 $ 2 1 . 2 3$ 3 , 5 0 4 ) --------------------------.----..M 0 0 7..79.3$1,800--...... . - - - . . : - . - . - . - - - $ 2 2 . 8 A ) 1 0 3 . 2 ) 0 1 4 4 . 4 8 1 5 7 . 3$ 2 , 0..)-4.... ------------ 4 2 .1) 1 4 4 ) . 1 1 0 1 8 7 . 5 2 1 0 5 . 4 8$'2.5-()- . . . . - . . - . $ 1 1 . 0 ( ) 9 0 . 4 ) 2 2 . 0 0 2 9 * 1 . 6 1 3 2 5 . 6 1$ 3 , 0 .------------ . 0 : 3 0 . 8 ( 1 3 s 8 . M 3 2 1 . 0 n ) 4 0 ) . 2 8 4 4 5 . 7 8$ . ' i , 0 0 0 ( ) -.---------Y(. ( X ) 1 1 0 ) . 0 . ' 3 7 5 . 0 074(1. 0 0 8 9 3 . 9 5 9 8 7 . 2 0$10.0-)-------------- 4 1 f .nn 2 8 . O o 1 , 3 o 0 , 5 . I y 2 , 1 5 2 . 0 2 , 4 6 6 , ( 1 2 2 , 7 3 . 5 . 6 2$825.00(1-)-. . 1 8 9 . 0 1 ) 3 , h 4 3 . 4 0 l i . 8 6 4 . 0 0 9 . 2 l ) . 0 0 1 0 , 0 3 . 6 1 1 1 , 1 8 7 . 1 1$ 1 W i , ) -------------- . 8 h z 6 9 . 0 0 ) 1 4 , 1 " 2 . 4 0 2 0 . 4 3 9 . ( 1 0 2 5 , 3 2 8 . I N ) 2 7 . 0 7 4 . 8 3 0 . , 2 4 0 . 1$1(X--01-:12 , 4 ; ( .W 4 3 4 7 ' ) 4 0 5 2 , 7 0 4 . ( 8 ) 1 & , 0 * 8 ) . 0 0 0 . 5 8 . 3 6 7 4 1 . U 1 . 4 6$ 1 ,0K),0(-O- 6 7 , 0 4 4 . : 7 1 7 , 3 . 6 0 7 3 2 , 5 4 . 0 ( 8 5 4 , O O . 0 0 8 9 9 , 0 0 0 . W 1 , 0 0 5 , 7 5 0 . 0

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I i n c l u d e s n e t V i c t o r y t o x .I n c l l d e s 1 2 ! p e r e e n i t o f t i i f o r ; r I v e t n t a x .M l o r e ' c o m p l e t e t a b l e s s h o w i n g r a t e s o f t a x a l l d t ' h e lax O l n s i n g l e

p e r I ' S 0 I 1 , m a I ' i e d person w i t h no( d e p e 1 n ( d e n t s , a n l l d a m l a l t r r i e d l p e r s o H w i t htwo ( I e p e n d l ( I e n t s a r ' e g i v e n i n i t h e A p p ) e n d ( i x t a l l ) l e s 1 9 , 2 0 , 2 1 , a n i d 2 2 .( C ) PRESENT CORPORATE TAX BURDEN

Your c o m m i t t e e hns g i v e t i c a r e f u l c o n s i d e r a t i o n s t o . t h e p r e s e n t . t a xb u r d ( l e i u p o n c o r p o r a t i o n s , I t i s r e c o g n i z e d t h a t t h e t a x e s w i l i e h a r onow b e i n g i m p o s e d d i r e c t l y upon c o r p o r a t i o n s , a n d i n d i r e c t l y u p o nt h e d i v i d e n d i n c o m e f l o w i n g t o s h a r e h o l d e r s , a r e a s h i g h r or h i g h e rt h a n t h o s e i m p o s e ( l l ) y t h e o t h e r U n i t e d N a t i o n s . I t i s v i t a l l y i m -p o r t a n t t h a t our c o r l ) o r a t . i o n l s b e k e p t i n t a s o u n d f i n a n c i a l c o n d i t i o n sso t h a t t h i e y may be a b l e t o c o n v e r t t o p e a c e t i m e p r o d u c t i o n a n dp r o v i d e emp l o y m n e n t f o r mcin l e a v i n g , t h e armed f o r c e s a f t e r t h e l w a r .The following surI I aiiy will shiow o ur existing corl)orate t fxb u r d e n :

1 . NORNIAL TAX RATES( a ) C o r p o r a t i o n s w i t h I l o r l m l a l t a x n o t i l C O f l e S o f n o t more t h a i t $ 5 0 , 0 0 0 : P e r c e n tF i r s t $ 5 , 0 0 0---5$ 5 , 0 0 0 t o $ 2 0 , 0 0 0 1 7$ 2 0 , O O O t o $ 2 5 , 0 0 0 -- 19( b ) C o r p o r a t i o n s w i t h n o r m a l t a x n o t i n c o m e s I n excess o f $ 2 5 , 0 0 0 a n d n o ti n excess o f $ 5 0 , 0 0 0 - $ 4 , 2 5 0 p ) 1 i 31 p e r c e n t o f amount over $ 2 5 , 0 0 0 .( c ) C o r p o r a t i o n s w i t h n o r m a l t a x x e t i n c o m e over $ 5 0 , 0 0 0-241 9 4 3 o v e r1 ( 3 9 I$ 2 1 . 2 87 9 . 2 81 4 4 . 4 81 8 7 . 9 5. 2 9 4 1 . 6 13 9 7 . 2 88 1 3 8 . 9 52 , ) . 5 1 . 6 27 , 5 6 . . 6 11 8 , 2 0 . . 5 83 6 , 1 I . . : 1 62 1 9 , 9 5 6 . W 1 9 4 4 o v e r1 9 : 3 & 1 9 I I$ 2 1 . 2 87 9 . 2 81 6 7 . 3 82 0 5 . 4 53 2 5 . 0 14 3 7 . 7 89 0 7 . 2 02 , 3 1 . 6 28 , 0 9 a . I I2 1 , 3 7 1 . 6 84 4 , 1 2 2 . 8 4 13 2 6 , 7 0 . 0 0

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6 THE REVENUE BILL OF 1943- * I I . SURTAX RATES r e r c e n l t< a ) C o r p o r a t i o n s v i t h s u r t a x n e t i n c o m e s o f n o t more t h a n $ 2 5 , 0 0 0-10( b ) C o r p o r a t i o n s w v i t h s u r t a x n e t i n C O m e s i n e x c e s s o f $ 2 5 , 0 0 0 and [ l o t , I I( ' X C e S s o f $ 5 0 , 0 0 0 - - - . $ 2 , 5 0 0 p I l t u s 2 2 p e r c e n t o f t h e a i n o u n t o v e r2 A 0 0 0 .( c ) C o r p o r a t i o n s w i t h s u r t a x n e t i n c o m e s o v c r $ 2 5 , 0 0 0 . - - - - - - - - - - - - - - - - - 1 6( d ) C o n s o l i d a t e d r e t u r n s : ( ' o n i s o l i d a t e d s u r t a x n e t i n e o m c , a d d i t i o n a l ._ 2

I l l . E X C E S S - P R t o F l T r s TAX( a ) 1 a t e--------0( b ) S p e c i f i c e x ( t n P T ) t i o n ( $ . 5 , 0 0 0 ) .( c ) l x c e s s - p r o t i t s c r e d i t :( 1 ) 1 I n v e s t e d c a l l i t a l J t l e t . h o ( d :l i r s t $ 5 , 0 0 0 , 0 0 ( ) o f i n v e s t e d c a p i t a l..$ . 5 , 0 0 0 , 0 0 0 t . o $10,000,000- .-$ 1 0 , 0 0 0 , 0 0 0 t o $ .Si200,000,00()...-. ( ;Over $ 2 0 0 , 0 0 0 , 0 0 0 .. . .... . 5( 2 ) I n c o m t n e m i t e t h o d : P o r t i o n o f a v e r a g e e a r n i n g s i n I a s e p ) e r i o ( l d . - 5( d ) P o s t - w a r c r e d i t o f e x c e s s - p ) r o f i t s t a x - - _ 1 0( e ) D e b t r e l i e f : Rti r e l m n e t o f ( d ( e l ) t o n t t s t a n d h i t i g a s o f S e p ) t , . 1 , 1 9 1 2 ( l i n i f t e - dt o a m o u n t . o f p o s t - w a r c r e d ( I i t . ) 4_ _ _ _ . . _ ' 1 0( J ) O v e r - a l l t a x l i t t i t u a l i o n n p p l i i e d ( I ' ) s i t r t a x i s e t i l l C ( o m e b e f o r e b ) ( e i g r e -( d l u C e ( b ) y a d ( j u s t e d ( v x c e . . s - p ) r o f i t i s n t e t , ome--------. 8 0I I I s p i t e , o f t h e f i c t . t h l i l t , S o m e c o r p o i a t i o m i s m a y h a v e l a r i l e p r ) O f i t sa f t e r t a x i , t l e ( i i ( l e l i ( l r C o r I ' d ( d o e S I I o t S l l o l ' l i n r e d i s t i b u t i o n s ,i n ( c o l i p l U i s o l l W v i t I i t h l e ( l i v i d e ( l ( i d s o f ( o r p j o r l i t i o l n s i l l t i h e p ) r e - w a ry e a r s . ' . i l 1 ( ' o l l o w i n g t e a l ) l C s h o w s t l e l n e t ( l i v i d ( ( l l l s p a i d b y n e t

i L c o l l l e ( c o p o r a t i o l l s o v e r s e v e r a l r e c e n t y e a r s :T A B t L E 4 . -ANc d i v i d e n d s p ) a l i d 1 9 f ) U X - 4193.$7. 4 , 6 7 9 1 , 0001988--.--3,5 5 , l 0 0198..--,783,00()1 ( 9 4 ( ) -..-. . . . 4 , 0 3 6 , 0 0 01 9 4 6 1...' 1 , 4 2 6 , 0 0 01 9 4 2 ( e s t i l l m t e d ) - - - - 4 , ( ( ( , 0 ( (I 9 - 1 3 ( e s t m i 1 tI d ) . . ----- 3 , 9 0 0 ,1 9 - 1 4 1 ( e s t i m a t e d ) -.,0 0 , 0 0JS o u r c e : T r ' e : a s u r y D ) e p a r t t i n i : d .I t w i l l b e n o t e ( l d i h t , i n i s p i t e o f t h l e f a c t . t l a t , s o m e c o r p o r a l t i o r l sl h ' v e ' h I r g e p r o f i t s , t h l e ( l i v i ( d e n ( l ( l i s t r i b l l t i o l n s 1 i r e l e " ' s s i l l t h l e a g g r e g a t e lt h l a n i i l l t d e p r e - w a r y a t a r s o f 1 9 8 6 a n i d 1 9 : 8 7 . I t s h I o l l l ( d b e p o i l l t e ( lo u t t i h i t a , l a r 1 g e g p o r t i o n o f ( d i v i ( i d e n ( l s g o t o p e r s o l s i r l I l i e l o w i l c o l l m eI r O l I I ) S . T 1 r 1 0 f o l l o w i n g t l e l b l i l l d i C a l t ( e s } o w t h e , i l I C 0 o 1 m e f l o l m ( i i d k e n d ( l si s ( l i s t r i l b l t e ( l :

r T m l j l l ; 5 , - - - 1 n l ( c u m et C r O u d i v i d e l i d sUom d o m e s t ( ' X i c (ad f o r C e i g n C o r p ) o r n i a t i o n s b y n e ti l n O v t m c t ( I S ' s ( i n c l u d i n g J i d u c w i r y r c t u n s )N e t i n e ( 1 0 1 e e 1 h s s v s 1 9 3 9 8 l l t s | I l J i 1 o

u ' n ' l i r $-,o-b--............ $ 7 9 9 , : 1 7 3 , . 1 ) 0 l $ R 3 r , ' 0 6 2 . 0 l 0 f ) $ 1 , 1 0 2 5 , 4 1 ( 7 , ( ) 1$ 5 , 0 0 ) I t S 0 , 0 0 0 . r- : 1i21 2 ; . t ) ( ' u ) 3 9 2 , 4 5 3 0 , C O 4 : 3 1 J . I I 0 0 i l$ ( t O , t t t t t o 2 5 , 0 0 0 _ .....4 . 1 5 , ( ( i t t F J S ,. ; S 1 , 0 0 6 0 8 . 7 4 0 t . 1 0$ 2 . 5 , ( l t t I t $ 5 0 , 1 1 0 0 . . . . 1 ( t , 13 , ( l ( 0 8 1 O4 0 ,o c o 4 2 2 . 0 0 8 , o o b$ . W 0 , ( o l to t9,0--(J------.-. 2 2 1 , 4 3 6 1 , ( J f l t 2 5 5 . 2 t X ,1 1 ( , 0 3 3 7 . 0 8 2 , 0 0 0 )$ t t : ( ' t , t o $ 6 0 , t-)..83,.( 0 ( 0 1 t 0 7 , ; t I . 0 ( } 0 1 2 8 , 0 9 5 , 0 0 0$ 1 t ( t g J O t o * t 3 J ( o ( )-... 8 V , 0 8 9 , 0 1) ( ) 8 , 1 0 2 . 0 ( 0 0 1 3 9 . 4 1 9 , 0 M )$ t I t 4 i ( ; 0 t o $ 5 0 0 , 0 0 0 .4.l t , ( ( 1 5 8 , 2 1 0 . W ( M ( 1 0 8 4 6 4 1 ( ) 0 (V $ A 1 O . ( t ( i t t $ 1 , 0 0 0 , 0 0 .... 6 1 1 , 1 ( ) O0 6 , 8 W 0 0 6 0 , 4 4 3 ( N X )$ 1 , U t t 0 , 0 0 0 a n d o er.. ...,....0,U)0 0 1 , 0 7 . 0 0 0 7 2 , 7 1 1 , 0 0 ( )Total- 2 , 4t i U , ( ( 0 0 2 , 6 5 , 0 8 0 , 0 0 0 3 , 2 6 8 , 4 4 2 , 0 0 0

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T H E REVENUE BPLL O ( F 1943 7TABLE 5 . - I n c o m e f r a m p i t i d e n d s f r o m d o m e s t i c a n d f o r e i g n c o r p o r a t i o n s b y n e 4i n c o m e p a s s e s ( i n c l u d i n g f i d u c i a r y r e t u r n s ) - C o n t i n u e d

PERCENTAGE. DISTRIBUTIONN e t I n c o m e c l a s s e s 1 9 1 9 3 9

U n d e r 1 5 , 0 0 0-$------------3 2 . 4 $ 2 9 . 1 $ 3 1 . 4, 0 0 0 t o $ 1 0 , 0 0 0-4 . 4 1 8 . 7 1 3 . 3! i O O O t o (2 5 0 0 0 1 9 . 2 1 9 . 5 1 8, 0 0 0 t o $0-0000.-2 . 6 1 3 . 4 1 2 '.oo000-9.0 1 0 . 3 9 . 71 6 0 , 0 0 0 t o $150,000----4 . 8 3 93 0 0 0 0 t o$3010,000-8. 4 . 1 4 . 30 O O t o $ 5 0 0 , 0 0 0 --------------------2.2 2 . 0 2 . 1500,0 t o $ 1 , 0 0 0 , 0 0 0--. 5 2 . 0 1 . 5$ 1 , 0 0 0 , 0 0 0 a n d o v e r-. 6 2 . 0 2 . 2T o t a l--0 0 . 0 1 0 0 . 0 1 0 0 . 0

T h e r e d u c t i o n i n d i v i d e n d d i s t r i b u t i o n t o t h e s h a r e h o l d e r s c a n i n al a r g e m e a s u r e b e t r a c e d t o t h e h e a v y t a x e s we a r e i m p o s i n g u p o nc o r p o r a t i o n s . I n t h i s r e s p e c t , o u r p r e s e n t b u r d e n u p o n d i v i d e n d s i sg r e a t e r t h a n t h a t i m p o s e d i n e i t h e r G r e a t B r i t a i n o r C a n a d a .To g e t a n a c c u r a t e p i c t u r e o f t h i s s i t u a t i o n i t i s I i e c e s s a r y t o c o n s i d e rb o t h o u r c o r p o r a t e a n ( l i n d i v i d u a l b u r d e n w i t h t h a t o f G r e a t B r i t a i na n d C a n a d a .T h e p e a c e t i m e n o r m a l r a t e i n C a n a d a was 1 5 p e r c e n t . T h i s h a sb e e n r a i s e d t o 4 0 p e r c e n t e x c e p t w h e r e - t h e 1 0 0 - p e r c e n t e x c e s s - p r o f i t st a x i s h i g h e r t h a n 1 0 p e r c e n t o f t h e n e t i n c o m e . I n s u c h a c a s e , t h e1 0 - p e r c e n i t t a x d o e s n i o t a p p l y , t h e r e b y m i a k i n i g t h e n o r I m a l r a t e o n l y3 0 p e r c e i i t . T h e r e a s o n f o r n o t i n c r e a s i n g t h e r a t e i n t h e 1 9 4 2 l a ww a s e x p l a i l l e d b y t h e C a n i a d i a n M l i n i s t e r o f F i n a n i e e i n h l i s b u ( l g e tm I e s S a g e a s f o l l o w s :I h a v e g i v e n a g o o d d e a l o f c o n s i d ( l e r a t i o n t o b v a r i o t t s a l t e r n a t i v e means o f i n -c r e a s i n g t h c e x c e s s - l ) r o f i t s t a x . 1 b e l i e v e t h a t . t h e i n c r e a s e s h o 0 1 1 ( l a f f e c t t h l e t a xon e x c e s s p r o f i t s r a t l h e r t h 1 1 o i l l ) r o f f i s t l t a t h a v e l n o t i n c r e a s e d s u b s t a n t i a l l y o v e rp r e - w a r l e v e l s . A l r e a ( d y t h e t a N o i l p r o f i t s t h a t h a v e n o t i n c r e a s e d i s h e a v y whenwe b e a r i l l I n i l ( l t h a t , t h o s e p r o f i t s w h l e n l d i s t . i l ) l i t e d a s d i i ( v i d ( n s a r e s u b j e c t t oa l l t h e p e r s o n a l i n c o m e t a x e s i n a d ( l i t i o n t o t l h e c o r p o r a t i o n t a x e s . T l i l s i n v o l v e s ,I n e f f e c t , , a ( d i s c r i n l i l a l i o l l a g a i n s t i n c o m e e a r n e d i n J t h e f o r m o f c o r p o r a t e p r o f i t sa s d i s t i c t f r o m o t n l i r t v y p s o f i l i c o l l i e , s u c h a s i n t e r e s t . Som c i l i s c r i m i n a t i o nma y b e j i i s i i f i e d , b l ) i t I b e l i e v e we h a v e a l r e a d y g o n e f a r e ( n o u g h l i l l t h a t d i r e c t i o nC o n ; s e ( q U e n t l y , I p ) r o p o s e ' t o i n l c r e l l a ( ' t l i e r a t e o f t a x o i l e x c e s s p r o f i t s b u t n l o t t h of l a t r a t e o f t a x w h i i c h l a I ) l ) l i s t o p ) r o f i t s g e n e r a l l y .F u r t h e r m o r e i l l C n d a ( l a t h l e P r o v i n i c e s h a v e , ( ' g i v e n ' l u p t h e i l n c o i l l e - t a xf i e l d f o r t h e r a t i o n n o f t 1 e C w v a r .T r h e B r i t i s h p I e a c e t i m e n o I I n a l r a t e , w a s 2 5 P e r c e n t a n d t h i s h I I s b e e n lr a i s e d ( t o 5 0 p I e ' c e n i t . B I t ( d i v i ( I d e n l s f r o m B r i t i s h i c o r p o r a t i o n s a r e "n o t S u b 1 ) j e c t t o a t f f u r t h e r 1 1 0 1 o r 1 1 t a x i i ; t } 1 e 1 l 1 1 1 ( 1 s o f t h e B r i t i s h X 1 s l h a r e -h o l d e I . M o r e o v e r , t h ( e B r i t i s l h s u r t a x d o e s n o t , a p l ) I y t o i n c o m e I s o fi n d i v i d u a l s o f l e s s t h a t i $ 8 , 0 0 0 , a n dL he B r i t i s h s h i a r e h i o l d e r 1 w i l lr e c e i v e a i r e f u n d o f t h e n a i l i a l t a x i f I h i s i n l C o m e i s l e s s t r i n i m h i s e x e m i p -t i o n I , w h i c h i s $ 3 2 0 f o r - a s i n g l e p e r s o n , $ 5 6 0 f o r a m a r r i e d p e r s o n , a I n d$ 2 0 0 f o r t a c l t ( d ( p l ) C l l ( l e l 1 t .G r e a t B r i t a i i n ' s 5 0 - p r c ) (ent t a x O 1 l c o r p o i ' a t i o n s i s 1 e g a r ( l e d a s t h l ei n d i v i ( l u a l ' s n i o r I a l t a x a n 1 l w - h e n t h e i n ( l i v i d ( l a l p a y s t a x on l h i st o t a l i l n c o m l e t l e . 5 0 - p ) e r C e i l t t a x w h i c h h a s l ) b I l ) a i d ( - b y t h e c o r p o r a -t i o 1 1 o n 1 h i i s d i v i d e n d i n C o m e i s d e d u c t e d f r o m t h e Sum o f t h e i i 1 ( l i -v i d u a l ' s t a x ; a n d i f t h e i n l i v i ( l u a l owes n o i n ( l i d i ( l u a l t a x t h e w h o l e

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THE R E V E N U E BILL OF 19435 0 - p e r c e n t n o r m a l t a x w h i c - h t h e c o r p o r a t i o n p a i d w i l l b e r e f u n d e d t oh i m b y t h e G o v e r n m e n t . M l o r e - o v e r , i n G r e a t B r i t a i n , n o S t a t e o rl o c a l i n c o m e t a x e s a l l ' r e i m p o s e d .N o t . o n i l y ( l O h i g h c o r p o r a t e n o r m a l a n ( l s u r t a x r a t e s a f f e c t t h e s m a l li l i v e s t o l , b i t t t h e y a l s o s e r i o u s l y c u r t a i l t i l e n o r m a l i n c o n l i c O r e c e i v e db y c l b a l i t a b l e , r e l i g i o u s , a l l d ( l e ( l I l ( c t i o l n a l i n s t i t i t i o i i s w h i ( ' c h i s s on e c e s s a r y f o r t h e i r ' t o c a r r y o l n t h e i r a c t i v i t i e s . Many o f our e d u c a -t i o l n a l i n s t i t u t i o n s h a v e h a ( l t h e i r r ( ' v e n i e s s e v e r e l y c u r t a i l e d t h r o u g hwar a c t i v i t i e s .T h e c u t l l a i l m e n t o f d i v i ( l e n ( l s w i l l n o t b e a i n y g r e a t b u r d e n u p o n t h ew e a l t h l s h a r e h o l ( l e r . I f h l e i s i l l t h e s u r t a x b r a c k e t , a ) o v c $ 2 0 0 , 0 0 0 ,t l e G l o v e r u n m e n t w v i l l , u l I ( l e r p r e s e n t l a w , t a k e a t l e a s t 9 0 p e r c e n t o fe v e r y d o l l a r o f i n c o m e a b o v e t h a t t a m o u n t . O n l t h e o t h e r l h a l d l , ns l h a r e h o l d l e i i l l t h l e l o w e s t b r a c k e t w i l l p I l y , u n d ( l r t i m e e x i s t i n g l a w , at a x , e v e l l a f t e r t i l h e ) O S t - w a r c r e ( I i t i s t a k e l l i n t o a c c o u n t , e q u i v a l e n t ,t o i t a l x o n l c o m p a r a b l e i n c o m e f r o m n o n i m v e s t m l e n t t s o u r c e s o f n e a r l y$ 5 0 , 0 0 0 . I n l a d d i t i o n , m e a n l y S t a t t e s i m p o s e c o r p o r a t i o n s i n c o m e , t a x e sw h i c h a l s o l e s s o n t h e a n i o u n t t a v a i l a b l e f o r d i v i d e n d d i s t r i b u t i o n s .

I ( d ) l i x c i s i - : sT h e e x i s t i n g l a w a l s o i m p o s e s a l o n g l i s t o f e X c i s e l t a x e s . T h i s h a sb e e n ' g r e a t l y i n c r e s e d ( l s i l l c e . 1 9 3 9 . F o r t h e f i s c a l y e a r e n d e d J u n e 3 0 ,1 9 4 4 , l e ' ( d r a l 1 e x c i s e t l x e s a r 1 e ' e s t i m a t e d t o y i e l d o v e r $ 4 , 0 0 0 , 0 0 0 , 0 0 0 ,

e x c l u s i v e o f s o c i a l - s e c u r i t y t a x e s .( ( ' ) PER CAITt(.1''N1URDE1 N

O u r S t a t e a n ( l l o c a l t a x e s y i e l d a p p r o x i m a t e l y $ 1 0 ; 0 0 ( o o o o 0 0 0 .W h e n t i h e s e a r e u ( l v d e t o 1 h T h i c - ( l e r a l t a x l l i r ( l e l n , W e ( f i l l d t h a t . t h e t o t a lt a x e s O i l a 1 . p e r c a ) i t a t b a s i s a l c u c h ( h i g hl e r t h a l l t h e p e r C a ) i t a t a u xl b u l r ( l e l l i i i G r e a t B r i t a i l l o l ( C a n a d a l ( i n . 1 l l i j s i s s h o w n b y t h e f o l l o w i n l gt a b l e I ) p ( r e r e d b y t h e , l t i r e l a r y D ) e p ) a r t n i m n i t :7 ' 0 t a l C T i l l ( l a l a n d f l ( O f l u ' f l I l 7 ' v t e r n m I tf l e t i a x e s / ' ( ' ( I / f i l a 1 9 f . 3 - - 4 ; 4

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( a 1 ) E S T . I . \ ' I A T E RF Z v I N U E , E - F F E ' c " I SI t i s e s t i m a t e d t h a t , t h l e c o m m i t t e e b i l l w N i l l i n c r e a s e 1 F e ( l e r a l r e v e -n u e 1 s , i c h in l i n i g 1 ) 0 5 1 t a l , l b y a t t o t a l o f $ 2 , 1 : 3 9 , : 3 0 0 , 0 0 0 , ( f l u r i n g a f u l lY e a r o f o p ~ e r a t i o n , a t l e v e l s o f i n c o m e a n o l d b u s i n e s s , a c t i v i t y e s t i m a t e df o r t h e c a l e n d a r y e a r 1 9 4 4 . 1 m c o m n e - t a x r e ~ c e i p t s ~ j 1 1 l b e i n i c r e a s e d l b y$ 7 7 0 , 8 0 0 , 0 0 0 , o f w h i c h c o r p o r a t i o n t a x e s w i l l a c c o u n t s f o r $ 6 1 6 , 0 0 0 , 0 0 0 ,a n d h i d i v i m d u a l i n c o m e t a x e s f o r $ 1 5 4 , 8 0 0 , 0 0 0 . R e v e n . . u e f r o m . t a x e . so n l c o n I n o d i t i e s 1 1 ( 1 d s e r v i c e s w i l l l b e i n c r e a s e db(y1 , 2 0 1 , 7 0 0 , 0 0 0 ,

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THE R E V E N U E B I L L O F 1943 9w h i l e p o s t a l r e v e n u e w i l l b e i n c r e a s e d b y $ 1 6 6 , 8 0 0 , 0 0 0 . T o t a lF e d e r a l r e v e n u e i , i n c l u d i n g n e t p o s t a l r e v e n u e M , w i l l b e i n c r e a s e d f r o ma n e s t i n a t e d $ 4 1 , 3 4 1 , 2 0 0 , 0 0 0 u n d e r p r - e s e n i t l a w , t o $ 4 . 3 , 4 8 . 0 , 5 0 0 , 0 0 0u i n d e r l t h e c o m m i t t e e b i l l . T h o a b o v e e s t i m a t e s d o n o t i n c l u d e c h a n g e si l l r i e v e n t u c r e s u l t i n g f r o m t h e t e r m - i i i n a t i o n o f g o v e r n m e l l t a l e x e m p t i o nf l o m n ( c e r t a i n e x c i s e t a x e s , a l s s u c h c h a n g e s i n r e v e n u e w i l l b e c o m p l e t e l Yo f f s e t b ) y c l m i a i ( g s i l l e x C I p e l ( l i t m U t e s . T l h e a d d i t i o n a l r - e v e n u e u n d e r t h i sb i l l w i l l make t h e F e d e r - a l , S t a t e , a n d l o c a l t a x b ) u i d e l n i n e x c e s s o f$ 5 0 , 0 0 0 , 0 0 0 , 0 0 0 a n n l l l u a l l y .I ) e t a i l s o f t l h e r e v e u i c e f f e c t s o f t h e c o m m i t t e e b i l l a i r e s l h o w n , i nt l e f o l l o w i n g t a b l e :T A L H E 6 ( . - - s t s i m n a t e d t ( a x l i a b i l i t y u n ( l e r t h e c o m m i t t e e b i l l , a s c o m n p a r e d l w i t h t h e

t l a x l i a b i l i t y u n d e r t h e p r e s e n t l a w , . f o r a f u l l y e a r o f o ) e r a t i o n fl i t i m i l l i o n s o f ( o l H a r s ]g e n e r a l l a n 1 ( d s p } c f l a l c c o ( o t l l t t s a m i ~ t e l t p ) o s 0 t a l r e v e n t i u

1 . I n l t e r n a l r e n i ' i i i i e :( 1 ) I n ( c o m e 1 a n m I e x c e s s - l ) r o f i s t a x e s :( ' o r v ) r a t i o l l :I w ( ' o ! H Q e ;F x ( ' P s s - p ) r o f l t s t a x . -.-.ID e c l a n d v ' l u e e x c ( s s - p r o l i t s t a x . - -' T w i l o r l o r t o i o n ( g r o s s ) ----------L e s s p I o s t - w O r e w d i t . .

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4 , 6 0 . 61 1 , 6 1 8 3 . 8I M l i 61 1 6 , 4 2 1 . 01 , 1 1 0 4 . 9

' T o t a l0 1 o ) r r t i o n ( I e t )-5 , 2 5 0 . 1Nt I n c o m e t a x ( g r o s ) . - - - - -V i c t o r y t a x (gross). ...l D s - s p s t - 0 w a r c r e d i t - - . - -\ i c t o r y t a x ( I l e t ) ------------.

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( 2 ) M i s c e l l a i e o u s i n t e r n a l r e v e t o t o :C a p i t a l s t o c k , e s t a t e . 1 l l ( 1 g i f t t a x e s :( ' a p i l a l s t o c k t a x - - - - - - - - - - - - - - - - - - - - .E s t a t e t a x -------------------------( G i M ftax-T o t a l c a p i t a l s t o c k , e s t a t e , a n d g i f tt x . i sS--.-.

' T a x e s 0 1 1 ( c o n l m m o d l t i e s 1 1 1 ( 1 s e r v i c e s :L i ( I t i o r t a x e s :D ) i s t i l l e d i s j l r i t s d o m e s t i c c f l n ( ii l m l ) o r t e d l ) ( e x c i s e t a x ) * 3F ' e r m i e n t e d 1 1 1 0 1 1 1 l i u ( p l o r s 2R e c t i f i c a t l o n i t a x 2 ,,W V i n e s ( d o l o l e s t i c a n ! l n m ) o r t e ( d )( e x c i s e t a x )S p e c i a l t a x e s i n c o n n e c t i o n w i t hl i ( i t i o r o c c i i p a l t l o u s . . .( ' o n t a l i e r s t a m i p 9 -- .----I l o o r - s t o c k s t a x e sA l l o t h e r . . . . . . . ., T o t a l l i q u o r t a x e s . . . . . . . . . .

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10 THE R-EVENUE BILL OF 19 4 3T A B L J E 6 . - F s t i m a t e d t a x l i a b i l i t y u n d e r t h e c o m m i t t e e b i l l , a s c o m p a r e d w i t h t h et a x l i a b i l i t y u n d e r t h e p r e s e n t l a w , f o r i a f u l l y e a r o f o p e r a t i o n - C o n t i n u e d

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' T o t a l t o b t t t c o t a x e s .S a m l l i p t I a x e s :I s s u e s o f s e c r a r i l l e s , l o n d t r a n s -f i r s , a n a d d e e d s o f conve y a n v t eS t o c k t r a l n s f e r sPp l a y i n gCards.S i l v e r b u l l i o n - a l t s o r t r a n s f e r s -' t o t a l s t n a i i ) t a x e s . - - - - - - - - - - - - - - .

a I r i l l f d w ? a r e r s ' e m x c i t I a v ( s :( i ; . o l i 11(I m h r i e r l i c n g o i l s' U t S S i ' i g ( ' r a I I t o i r I O l i l ( S a r i d t I i o t ( n .(vb.ISA a t i o n i i o i i l e t r u c k s , b l t s s e s , t n it r a i l e r s1 P a r t s a 1 ( t i c ( a e s S o r b s f o r a u t o -r l l l b i l e s s -.-.' ' i r v s a n d i n n i n r t u l b e sJ F l e e t r inal e n e r g y' . l i e t r i e , j a s , a r i d o i l n p p l i a j i e c s -l i - c t r i c l i g h t l a t h l i sH ado r e c e i v i n g . s I l s , p I o l i r i o g r I p i i ir v ( e o r t I s , a n d m i s - d l i l a s t r i a -I l I ' ' I S .R e f r i g e r a t o r s , r e f r i g e r a t l a g a p p a -r a t u i s a n d l a i r - c o r r i l i t i l o n e r s .B u s i n e s s a n l d s t o r e l l a e h i l l e s . - -I ' h o t g r a p h i c a l i l ; t l r a t tu s .h l atelles.1 . . a ,--e.S p l r l i l a g g o o t lF ' i r ' a r m l ) s , s h e l l s , l p i s t o k s , a n d r e -v o l v e r s

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4 3 , 4 8 0 ) . 3 4 1 . 3 - 1 1 2 2 , 1 3 . 3I E s t i m a t e s o f t h e y i e l d o f t h e c o m m i t t e e b i l l a n d ( l o f p r e s e n t l a w a r e a t l e v e l s o f i n c o l m e a n d b u s I l l n S e S S e s t l -m a t e d f o r t 1 0 e c a l e n d a r y e a r 1 0 4 4 . U n ( i t ) l l n t t a k e j l l t ( ( U I c o n s i d r a t l o n c l a i i g e s f i t r e v e n u e w h i c h t i r e c o m p l e t e l yo f f s e t b y c h a n g e s i n e x p e n d i t u r e , s u c h a s t e r m i n a t l o I I o f g o v e r o n i e n i t a l e x c i s e t a x e x e m p t i o n s .3 C o l l e c t i o n s f o r c r e l i t t o t r u s t h i n u d s a r e n o t i i c l u h d e dT h e s e e s t i m a t e s a r e a f t e r a l l o w a n c e s f o r d r n w h a c k s o f $ 1 9 . 7 m i l l i o n s u n d e r t h e C e o i n l n t t e e b i l l a n d o f$ 1 4 . 8 m i l l i o n s u n d e r p r e s e n t l a w .4 L e s s t h a n $ 0 . 0 5 m i l l i o n .A T h Q t a x o n l u g g a g e . h a s h e e n c h a n g e d f r o e n a m a n u f a c t u r e r s ' e x c i s e t o a r e t a i l e r s ' e x c i s e t a x .* I n c l u d e s c o l l e c t i o n s f r o n i t a x e s o n i l a r c o ( t l e s : t a x e s u i l e r t i l e N a t i o n a l F i r e a r m s A v t ; a i d t h e t a x o i lh y d r a u l i c n u l i u i n g , a l l o f w h i c h a r e e f T e c t i v e c u r r e n t l y . l i i a d d i t o u , i n c l u d l l e S c o l I e c t i o e i s f r o m r e p I e ' l ' t (t a x e s n o t r e i n s t o t e X l b y t h e R e v e n u e A c t o f I t l l : a m i d c o l l e c t i o n s f r o n i t l l e - f o l l o w i n g e x c i s e t a x e s r e p e a l e db y t h e R t e v i i u e A c t o f 1 9 4 2 : r u b b e r a r t i c l e s , e l e c t r i c s i t I i s , ( o p t i c a l e q u i p n i v i t , w i d w a s l i i u g m a c h i n e s .E x c l u d e s I p o s t a l s u r p l u s , i f a n y . s h o w n s e j i a r a t e l y b e l o w .* E x c e s s o f r e v e n u e o v e r e x p e n d i t u r e ; b a s e d u p o n t i l e " ' C o s t A s c t r t u l h n n e n t R e l p o r t f o r t h e F i s c a l Y ' e a r1 9 4 2 , " o f t h e P o s t 0 1 1 1 c L ) e p a r t m i e n t ; n i o n p o s t a l s e r v i c e s e x C l 1 d e d .

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TRE REATENE B I L L OF 1 9 4 3( b ) I N D I V I D U A L I N C O M E TAX

Y o u r c o m m i t t e e i s o f t h e o p i n i o n t h a t t h e r e s h o u l d ( b e n o i n e r e o s ei ] i f t l I i V i ( l d i u l i n c o m e t a x e - s , t a t t h i s t i m e . ( e X c v p t w h l r e a s l i g h t h i c r 1 e a s ei s n e c e s s a r y f o r t h e p u t i r p o s e o f l t e g r a t i i g t h e V i c t o r y t a x w i t h o u t a] e ( a t l o s s i l n r e ( v e n 1 1 1 u .T h e c o m l l m i t I e f e l t t a t l i n ) t h e i n t e r e s t o f s i r l l p l i f i f l i o n o f t h e t a xS t I r u i c t u t i r e i t wa s a ( d v i s a t 1 ) 1 v ( ' t o r e p e a l t i l e \ i c t o r y t a x . B u t , a t . t h e .s a l l i e t i m l ( , i t w a s b e l i e v e d h i g h l y ( l e s i r a b l e t o r e t a i n a s t a x p a y e r s a smany a s p o s s i b l e o f t h e t w e I v e t o f o u l r t e e n l m l l i l l i o n l p e r s o n s n o w 1 0 s u b j e c to n l y t o t h o V i c t o r y t a x , a n d t o i n t e g r a t e d t h l e V i c t o r y t a x i l l s u c hI l a l m l l ' h ah a t l e $ 3 , 5 0 0 , 0 0 , 0 0 0 ( ) o f r e v e n u e b r o u g h t i i n t o t i h e r i e a s u r yU l i d e l ' t l i s t a x w o u l d n o t I ) h l o s t . T h e s e r e q u i i r e m e n t s a r e s u b s i a m i ,t i a l l y m l l e t , b y t h e ( ' c o m m l l i t t e e b i l l .I l l b ) r i e f , Y o u r i ( c o l l m l F i t t ( ( v b i l l , u s i t p ) e l t L i i l l s t o t O e , i n d ( l i v i d l l a l i l l c o i m et a x , i s i t s f o l l o w s :

1 . R e p e a l V i c t o r y t a x .2 . I n c r e a s e t h e i ; o r n a l t a x r a t e f r o m 6 i p ) r b l c e n t , t o 1 0 p ) e r c e l t .3 . A d o p t t h e s u r t a x r a t e s c h e ( l u v l e w h i c h i s s h o w n b e l o w .4 . R e p e a l t i h e v a r m l e d l i t i c o n i e ( c r e d i t .5 . R e q ! f l i r , , J l n a l r i e d ( l p l e I ' r s S f i l i n g s e p a l ' t a I c r e t u m i ' n s e a c h t o t I a k e as i n l p g l e p e r s o l s ( ' . x e l l J ) p i O I I .6 . P r o v i ( d e t h a t t h l e t a x s h a l l n o t . b e l e s s t h a n l 3 p e r ( l e n t o f t h en l e t , i l m c O . i l e i l l ( e X e V S S o f I s p e c i a l e ( ' X e 1 ) 1 t i o l l o f $ S 0 ) ( ) f o r as i n g l e p e r s o n , $ 7 0 0 ' f o r m a l r l i e d ( l p ) c I s o t i s , a n d ( l $ 1 0 0 a s a t c r e d i tf o r e a c h ( l e p e ( l e n l i t .7 . R e t a i n i a l l o t h e r m a j o r p r o v i s i o n s o f p ) r e s e i l t l a w , i n c l u d i n gr e g u l a r i I ( ' r o i m e t a x e x e n p i j ) t i m o r i s o f $ 1 , 2 0 0 f o r m a r r i e d ( p e r s o n sa i d $ : 3 5 0 0 f o r . s i n l e ' p e r s l l s a i1 1 d c r e d i t s f o r d e p e n l d e l n t s o f $ 3 5 0a c i l d ,l 1 i d t h l e o v e r - 1 l l t a x l i i n i t a t i o l l o f 9 0 p e l - c e l i t o f n i e ti l l ' o I I I e .A f e w c h a n l g shlavel() i l l m a d e i l l t i l m e s u r t I X I ' i t 1 t e s t o e f r e c t t l h ei n t ( g r 1 a t i o l l o f t l l e \V i e t o y t t x N v W i t t i h ( ' i l l i ' o f i l e t t l . x i l l S t u c h I l l m i l a i l n l v , . ,t o r e t a i ln t s n w e l a yi a s p o s s i b l e t l i ( ' e x i s t i n g t x b u r l d e l l . ' T h i e I e v i s ( ( l

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I f t h e s u r t a x n e t i n c o m e i s -Not o v e r $ 2 , 0 0 0 ..O v e r $ 2 , 0 0 0 b u t n o t over $ 4 , 0 0 0 -----O v e r $ 4 , 0 0 0 1 ) l t n o t o v e r $ 6 , 0 0 0O v e r $ 6 , 0 0 0 b u t n o t o v e r $ 8 , 0 0 0 .O v e r $ 8 , 0 0 0 b u t nt o v e r $ 1 0 , 0 0 0 o nO v e r $ 1 0 , 0 0 0 b u t n o t o o v e r $ 1 2 , 0 0 0 - . - . - -

h u t . n o tW u i t ( l o tb n t o tb ) l i t n o tb u l I t u i o tb u t n o tb u t n i o tb ) u I t j i o tb ) l i t n i o tb l i t n i o tb l i t n o tl ) l i t n o tb u t , n o tb ~ u t . n o t

over $ 1 4 , 0 0 0 . - - -over $ 1 6 , 0 0 0 ----ove r $ 1 8 , 0 0 0ove r $ 2 0 , 0 0 0over $ 2 2 , 0 0 0 - - - -over $ 2 6 , 0 0 0 . - . -ove r 2, 000----oVer $38,000ove r $ 4 4 , 0 0 0 .over $50,00over $ 6 0 , 0 0 ) -over 70,000ove r $ S 0 , 0 0 0 . . -over $ 9 0 , 0 0 0 . -

O v e r $ 9 0 , 0 0 0 t n t o t over $ 1 0 0 , 0 0 0O v e r $ 1 0 0 , 0 0 0 b u i t n o t over$ 1 5 0 , 0 0 0O v e r $ 1 5 0 , 0 9 0 b t t n o t over $ 2 0 0 , 0 0 0 - . .O v e r $200,000.

The s u r t a x s h a l l he-1 : p e r c e n t o f t h e s u r t a x n e t$ 2 6 0 , p h i s 1 6 p e r c e n t o f$ 2 , 0 0 0 .$ 5 8 0 , p h i s 2 0 p e r c e n t o f$ 4 , 0 0 0 .$ 9 8 0 , p l u s 2 3 p e r c e n t o f$ 6 5 , 0 0 0 .$ 1 , 4 4 0 , p l i s 2 7 p e r c e n t o f$ 8 , 0 0 0 .$ 1 , 9 8 0 , p ) I l i s 3 1 p e r c e n t o f$ 1 0 , ( 0 0 .$ 2 , 6 0 0 , , p h i s 3 6 p e r c e n t o f$ 1 2 , 0 0 0 .$ 3 , 3 2 0 , p l i s 4 0 p e r c e n t o f$ 1 4 , 0 0 0 .$ 4 , 1 2 0 , p i u s 4 3 p e r c e n t o f$ 1 6 , 0 0 0 .$ 4 , 9 8 0 , p h i s 4 6 p e r c e n t o f$ 1 8 , 0 0 0 .$ 5 , 9 0 0 , p ) 1 u i i 4 9 p e r c e n t o f$ 2 0 , 0 0 0 .$ 6 , 8 8 0 , p h i s 5 2 p e r c e n t o f$ 2 2 , 0 0 0 .$ 8 , 9 6 0 , p l i s 5 5 p ) b r e e n t o f$ 2 6 , 0 0 0 .$ 1 2 , 2 6 0 , p ) 1 1 s 5 8 p e r c e n t o f$ 3 2 , 0 0 0 .$ 1 5 , 7 4 0 , p h i s 6 2 p e r c e n t o f$ 1 9 , 4 6 0 1 , p h i s 6 5 p e r c e n t o f$ 4 4 , 0 0 0 .$ 2 3 , 3 6 0 , p l i s 6 8 p e r c e n t o f$ 5 i , = ) 0 , 0 0 0 .$ 3 0 , 1 6 0 , 1 ) p h i 7 1 p e r e e n t o f$ ; 0 , 0 0 0 .$ 3 7 , 2 6 0 , 1 ) p l s 7 4 p e r c o n t o f$ 7 0 , 0 0 0 .$ 4 4 , 6 6 0 , p l u s 7 7 p e r c e n t . o f$ 8 0 , 0 0 0 .$ 5 2 , 3 6 0 , p l u s 8 0 p e r c e n t o f

$ 9 0 , ( 0 0 .$ 6 0 , 3 6 0 , p b l s 8 2 p e r c e n t o f$ 1 0 0 , 0 9 0 .$ 1 0 1 , : 3 i o 0 , p l u s 8 3 p e r c e n t o f$ 1 5 0 , 0 0 0 .$ 1 4 2 , 8 6 0 , p ) 1 1 s 8 4 P e r c e n t o f$ 2 0 0 , 0 0 0 .

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. THE RE V E N M J E B R L L OF 1 9 4 3A f t e r t h e c h a n g e s a b o v e d e s c r i b e d , t h eb u r d e n w i l l compare w i t h t h a t under p r e s e n t i n d i v i d u a l i n c o m e t a xl a w asf o l l o w s :

TABLE 7 . - C o r n p a w r i s o n o f lax burden, e x c l u s i v e o f o n e - h a l f u n f o r g i v e n t a x , u n d e rp r e s e n t la w a n d u n d e r c o m m i t t e e b i l lN e t I n e o n e b e f o r ep e r s o l l i l l i - X v I I I I p -t j o l

$ 7 b 0.-$ 1 , 0 0 )$1 I r X )$1,800$214.XX------$ 2 , W$:1,IXK.$ 4 , ( X 0 1

...$,I..$ 2 0 ) , 0 , 0 0 --$ ),OJX............

$ 4 1 .$ 1 1 . , 0 0 0 - - - . - . . - . . .$ 7 0 0 0 W - - - - .$ , 1 ( ) , g X A J . . ..$ 9 0 ) , 1 1 4 ) .$ 1 0 0 1 ) 1 x )A ) , I X ). ) . . ..$ 2 ' ( . ( X X ) ... ..$ 2 , ( X ) -----.$ 5 d X O I K$ 7 t ( 1 , I$ 1 , X x l ( .()O.$ 2 , ) X ( N . t ...$ . , ) .....o .

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2. )5 1 . 9 32 , 4 1 ) 7 . I V )2, 3. 2 74 , 9 1 7 . 1 W 07 , ( 2 5 . 9 : 31 1 ) , l 1 1 l . 27

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2)0 , x 5 7 . ( 1 1 ' ' 2 0 , 732. 1 ( )4 1 ) , 7 4 6 . 4 4 1 3 , 7 : 1 2 . ) 01 7 ; 1 , 1 ) ( 0 0 . 1 H ) ( 1 - , 0 I ) I ) . I N )8 9 9 , O I X ) 0 ( K ) 9 4 ) , 0 U Y ) I ( X )1 , 7 f 1 ) , U l ) l ) I 1 , 8 X I ) I N O .4 , 4 9 9 , 0 U 0 . 0 ) 4 , 5 W 0 , 0.00

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2 , 2 7 7 . ( ) 04 . : 3 0 6 . ( )6 i , 8 : 3 6 ., 7 ( 6 2 . 1 4 )1 2 , 9 2 5 . 0 4 )

1 9 1 1 1, ) I 22 6 , 935. 00: i t , ( 1 7 8 . 0 0 (1 2 , 7 2 1 . 0 ) 06 1 , 0(11.1)M ( 9 , 7 0 7 . 00G g ' 6 & ; . . ( N )1 1 4 , ( 1 2 .1 1 , 1 , (1(1:1,)2 0 8 N , 1 ) 7 4 .4 . 1 . ) 7 4 1 . ) 0; . . 5 , ( X ' I . 1 4 )K ) 0 , ( 4 1 . 001 , 81), 00'). ( O4 , 1 ) , UJ.00

I N e t V i c t o r y t l X C 0 1 1 1 ) I l l t C t d O n g r o s s i l C O I I I ( ' e ( q t ( a l t O t e - r i n i t h l s o f n e t I n c o m e .

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T . A B L E : S . - C o m p a r s i s o n o f i f t e t i v e r a t e s u n d e r p r e s e n t l a w and u n d e r c o m m i t t e e b t 7 l[ C o m p u t e d w i t h a n d w i t h o u t o n e - h a l f o f u n f o r g i v e n t a x a d d e d ]

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.r.50..$800.$1,0 0 0. 0..T o _ ,, -----1 , 2$ 9 2 0 0 0 - -$250,0 , ,$ 3 , 0 0 0 I$ 4 , 0 0 0 - -$5,000I$ 6 , 0 0 0 - -r s ~ o o$ S . X) . O$10.000.-I$1-5,000.--$25.00 ......,.--- -----0.oO- , , - -

--1---- -$80,000.$ 1 5 0 , 0 0 0$ 5 0 0 , 0 0 0 .--------$ 7 5 0 . 0 0 0 ' ) - - -$5,(W00 0-----------

S i n g l e p e r s o nW V w i t h o u t u n f o r g i v e n t a x With u n f o r g i v e n t a xP r e s e n t C o m m i t t e e P r e s e n t Committeel a w b i l l l a w b i l lP e r c e n t2 . 3 36 . 7 8 07 , 7 6 6

1 0 . 7 2 71 7 0 01 4 . 6 731 . 5 . 9 . 82 . . , I S s

2 2 1 . ( O s2 : 3 . 3 4 32 4 . 5 1 82 9 5 . G 4 92 6 . 7 . 5 12 7 . 8 3 21 3 . 1 1 74 2 . 5 7 ,4 6 . 1 9 25 1 . 7 3 0 1 15 6 . 1 1 55 9 . 6 6 3C 2 ( 2 56 5 . = 2 46 7 . 5 7 7

S 3 . I S 9N S . 3 7 2X 9 . 9 3 38 9 . 9 5 38 9 . 9 9 09 9 Y . 97

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P e r c e n t2 . 8 3 36 . 7 - 8 0c . . s o1 1 . 8 4 01 4 . 0 1 01 6 . 1 8 21 7 . 6 2 91 8 . 331 9 . 6 C o 62 1 . 0 3 ; 62 2 . 8 7 52 4 . 3 9 82 5 . 7 5 4 92 7 . 1 0 32 S. 3 7 1

3 0 . 8 2 F 03 6 . 7 5 54 2 . 3 8 94 7 . 3 9 05 1 . 4 5 45 7 . 6 6 7( 1 2 . 5 6 76 6 . 5 3 76 9 . 8 . 5 57 2 . 7 6 57 5 . 4 0 4r . . 7 4 _7 . 7 , 4 58 5 . 5 4 9o 0 . 0 1 49 ' ' 9 2 09 8 . 7 3 71 0 0 . 5 1 01 0 . 6 3 21 0 0 . 8 1 61 0 0 . 9 2 6

P e r c e n t3 . 8 3 37 . 6 6 6S . 7 6 21 2 . 6 1 31 4 . 7 2 7I 6 . 8 4 4 21 S . 2 5 12 9 . 2 2 52 1 . 6 3 32 3 . 3 9 32 4 . 9 0 02 6 . 2 7 92 7 . 5 1 42 , t , 5 92 9 . SO )3 0 . 9 3 7 ,3 6 . 7 7 1

'> . 3 W i4 7 . 3 3 35 1 . 3 7 95 7 . 4 8 76 2 . 4 2 26 9 . 8 7 84 2 .4 17 5 . 5 2 )7 7 . 9 9 3 )8 l i . 1 9 49 0 . 6 1 19 3 . 4 8S9 9 . 2 4 31 0 0 . 5 7 61 0 0 . 6 8 21 0 0 . 8 4 11 0 0 . 9 3 6

M a r r i e d p e r s o n , no d e p e n d e n t sW i t h o u t u n f o r z i v e n t a x

P r e s e n tl a wP e r c e n t. 2 1 3

9 9 21 . 4 6 21 . I .35 . 2 S 58 . 0 2 69 . 3 9 71 4 . , 64* 1 3 . 5 0 91 6 . 1 6 51 7 . 8 ' - 7 91 9 . ! ' 5 42 ) . 8 i 6 52 2 . 2 4 92 3 . 4 1 42 4 . 6 6 63 0 . 2 2 13 5 . 4 9 94 0 . 1 3 84 3 . 9 5 04 9 . 6 1 65 4 . 1 4 95 7 . 9 9 06 1 . 1 0 26 3 . 9 1 66 6 . 3 9 2( S . 5 8 47 5 . 8 9 28 0 . 0 4 58 2 7 4 3

8 8 . 1 ' 98 9 . 6 6 68 9 . 9 0 0 p89 . 9 5 08 9 . 9 8 0

Committeeb i l lP e r c e n t

. 2 0 0. 3 7 5

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7 6 . 8 3 78 0 . 8 7 2. 8 ; 3 . 4 0 21 8 8 . 7 ; 4 6s 2 . 4 q .9 0 . 0 0 09 0 . (o

With u n f o r z i v e n t a xP r e s e n tl a wP e r c e n t. 2 1 3. 9 1 79 9 2

1 . 4 6 21 . . . 35 . 2 8 58 . 7 4 31 0 . 2 7 21 3 . 0 2 11 4 . 8 5 91 7 . 8 2 71 9 . 7 4 42 1 . 6 2 1Z t . 0 9 02 4 . 6 4 32 5 . 9 5 02 7 . 3 5 i3 3 . 5 9 83 9 . 5 . 3 24 4 . 7 4 84 9 . 0 3 55 M . 4 0 76 0 . 4 816 4 . 7 5 96 8 . 2 9 9 77 1 . 3 7 27 4 . 1 3 97 6 . 5 9 18 4 . 7 7 08 9 . 4 2 19 2 . 4 4 39& 4 9 91 r 0 . 4 3 31 0 0 . 5 7 . 51 0 0 . 7 8 71 0 0 . 9 1 5

C o m m i t t e eb i l lP e r c e n t,3 7

, 9 0 01 . 2 5 0i4.6008 . 331 0 . 0 7 51 3 . 1 2 01 5 . 1 5 01 8 . 3 6 22 0 . 4 2 52 2 . 4 0 02 3 . 9 3 92 5 . 4 4 32 f . 9 12 8 . 0 5 0i3 2 3 04 0 . 1 7 24 5 . 3 9 44 9 . 6 8 5.. O S 16 1 . 2 5 26 5 . 4 7 56 8 . 9 7 57 2 . 0 2 17 4 . 7 6 57 7 . 2 8 78 5 . 7 1 59 0 . 2 4 79 3 . 1 9 29 9 . 0 9 61 0 0 . 1 5 61 0 0 . 6 7 1 51 0 0 . 8 3 71 0 0 . 9 3 5

M T ar r i ed p e r s o n . 2 d e p e n d e n t sW i t h o u t u n f o r g i v e n t a xP r e s e n t Committeel a w b i l lPe r c e n t P e r c e n t. 19R _ - - - - - - - - _ - _ - _. 7 8 1 -

I . 3 6 4 . 3 01 . 6 i 5 . 5 . 7 51 . 9 4 6 0 1 . 2 02 . 1 4 0 1 . 5 0 02 . Q ) 3 7 1 . 6 . s 06 . 3 7 2 5 . 5 2 08 . 9 5 ; 8 . 4 3 31 2 . 1 2 4 1 2 . 1 5 01 4 . f 6 1 4 . 9 21 G . 3 1 9 1 6 . 8 3 31 8 . 0 6 1 1 8 . 7 1 41 9 . 4 1 7 2 0 . 1 6 22 0 . 8 7 2 2 1 . 5 , 9 82 2 . 0 7 6 f 2 2 . 7 7 &2 8 . 0 4 7 2 8 . 7 0 63 3 . 4 6 3 3 4 . 1 8 03 8 . 2 9 7 3 9 . 0 4 84 2 3 0 9 4 3 . 0 8 34 8 . 2 4 4 9 . 0 3 05 2 . 7 8 3 5 3 . 8 7 . 05 6 . 8 1 6 5 7 . 7 9 06 0 . 1 2 0 6 1 . 0 3 06 2 . 9 S 4 6 3 . . 3 06 5 . 5 : 3 9 6. 3 4 16 7 . St 3 6 8 . 6 5 07 5 . 3 6 2 7 6 . 4 0 S7 9 G 6 4 1 8 0 . 5 4 68 2 4 1 t 6 8 3 . 2 2 98 7 . 9 8 a 8 8 . 6 1 48 9 . 8 4 : ) 9 0 . 0 0 08 1 . 8 s o 9 0 . 0 0 08.949 9 0 . 0 0 08 9 . 9 7 6 9 0 . 0 0 0 ,

With u i f d r g i v e n t a xP r e s e n tl a wP e r c e n t. 1 9 8. 7 8 1. 9 2 6

1 . 3 6 ; 41 . 6 5 51 . 9 4 6 32 . 1 4 02 . 8 8 76 . 8 6 79 . 6 9 11 3 . 3 0 51 6 . 0 3 11 8 . 0 0 71 9 . 9 6 12 1 . 4 8 32 3 . 1 1 72 4 . 4 6 83 1 . 1 7 93 7 . 2 6 84 2 7 0 44 7 . 2 1 6 -5 3 . 8 6 95 8 . 9 9 46 3 . 4 8 16 7 . 1 6 77 0 . 3 5 47 3 . 2 0 S7 5 . 7 3 88 4 . 1 9 08 8 . 9 7 99 2 . 0 8 59 8 . 3 2 01 0 0 . 3 9 61 0 0 . 5 4 71 0 0 . 7 731 0 0 . 9 0 9

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TABLE 9 . - C o m p a r i s o n o f tax b u r d e n ( i n c l u d i n g o n e - h a 7 f o f I t f l f o r g i v e n t a x ) u n d e r p r e s e n t law and u n d e r c o m m i t t e e b i l lS i n g l e p e r s o n M a r r i e d , no d e p e n d e n t s M a r r i e d , 2 d e p e n d e n t s

N e t i n c f w r s o m e a l 6 N e t a f t e r t a x N e t a f t e r t a x N e t a f t e r t a xe x e m p t i o n Commitlee Committee _Po m m i t t e ePresent law I b i l l P r e ' e n t Commit- b i l l P r e z e n t Commit- b i l l P r e s e n t Commit-l a w t e e b i l l l a w t e e b i l l l a w t e e b i l$7.10

5 1 . 3 0 0 0 . - - --S .1 5 0 0 ---. --s , B

$ 2$ 3 . 0 0$ 4 , 0 0 0 -4,000 .$ 7 , 0 0 0$9.000$1. .$ 8 , O D O515.000

MODD------$30,000$ 4 0 S 0 0 0$50.000S$6,000$70,000$80,000

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17. 836. 8 9 1 7 , 5 6 - 7 . 501 9 , 759. 4 2 1 9 . 3 7 .0021. 1 4 4 . 3 ; 7 20. 714 . 5 1 )2 2 . 1 9 1 . SI 2 1 . 717. Z 022, 901.76 22. 33.002 3 . 2 7 * 4 e 2 02O, 7 1 1 . 003 . U 4 0 8 . I 4 2.712.2. 8 4 4 . 8 7 2 1 . 4 2 7 . 0 02 . I 5 6 . 5 9 1 9 , 5 0 .0 ( 1 .1 18,82. 3 1 7 , 0 I 1 8 . 0 07 . 5 3 . - 1 2 4 4 . 1 S . 00

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1, 397.311 , 7 1 S . 6 62 080. . 5 32. 4 4 6 . S 94 , 676. 9 47, 4 5 3 , . 5

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, 5 2 > 9 7 3 .1 . O 0 . 4 7 3 . 0 0* 2 , 0 1 5 . 4 7 3 . 0 05. 0 4 5 . 4 7 3 . 0 0

3 . 0 0001 8 . 027003 3 . 0 0150 . 3 $2 7 6 . 885 3 3 . 2 58 2 0 . 0 0

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THE REVENUE B I L L OF 19433I t w i l l b e n o t e d t h a t o n l y r e l a t i v e l y s m a l l c h a n g e s i n i n d i v i d u a li n c o m e , t a x b u r d e n l l r e s u l t f r o m t h e c o m m i t t e e I ) i l l . T h o s e t h l a i t ( 1 0

o c c u r r e s u l t , i n g e n e r a l , f r o n l t h e f a c t , t h a t t h e n l e t , V i c t o r y t a x , W h i c hwas l e v i e ( l a t ( l i f l e r e n t r a t e s f o r d l i f l e r e n t f a m i l y s t a t u s , b u t w i t h t h eI s e o f a f l a t e x e m p t i o n , i s b o x i n g r e p l a c e d b y a f l a t r a t e o f t a x , i a p l i e ( lt o t h e n e x t i l n c O m l e i l l e x c e s s o f e x e m p t i o n s a n 1 d c r e d i t s w h i c h v a r yW i t h t h e f a m i l y s t a t e s ; .T l h e f o l l o w i n g s t e p s t o w a r d s i m p l i f i c a t i o n h a v e b ( e e n a c h i e v e dt h r o u g h t h l e i n t e g r a t i o n a b o v e d e s c r i b e d :( a ) T h e s e p a r a t e c o m p u t a t i o n o f V i c t o r y t a x a n d c r e d i t t a k e n .c u r r e n t l y h a s b e e n e l i m i n a t e d .( b ) T h e i n c o m e b a s e s u b l ) j e c t t o n o r i m n l t a x a n d s - i r t a x h a r i s b e e ( mI n u ( l e t h e s a m e f o p r a c t i c a l l y a l l p e r s o n s ( i l l t h o s e l l o tr e c e i v i l i n g p a r t i a l l y t a x - ( , e x e m l ) t f i n t ( r ' e s t ) .( c ) T h e c o m p u t a t i o i i o f e a r n e d - i n c o m ( e c r e ( l i t h i n s b e e n e l m i n a t e d .( d ) T h e u s e o f t h e s h o r t - f o r m r e t u r n f o r t h o s e r e c e i v i n g l e s s t i l a n$ 3 , 0 0 0 g r o s s i n c o m e h a s b e e n r e t a i n e d l ) u t t h e r e t u r n h a sb l e l s i m p ) l i f i e d b y ( a ) p ) r o v i d i n g . f o r t h e n u m l r i b e r o f d e p e n ~ d -e n t s i l l t h e t a x t i b l e I l l n d t h e r e b y e l i m i n a t i n g t h e ( l e d u c t i o no f t h e c r e d i t f o r d e p n d ( l e n t s o n t h l e f a e o f t h e r e t u r n a n d( b ) r e d u c i n g t h e n u m l ) e r o f alternativee a d i n g s f o r f a m i l ys t a t u s f r o ml3 t o 2 .

A f u r t h e r s i m p l i f i c a t i o n i s a l l i e v e ( l i l l t i l e , c o m i l l i t t e l ) i l l b y s e t t i n gJ u l y 1 o f t h e t a x a b l e y e a r u s t h e ( l a t e f o r d e t e r m i n e a t i o n o f t l ; ( ' f a m i l ys t a t u s o f t h e t a x p a y e r f o r p u r p o s e s o f a l l r e t t l r l l s ; h e r e t o f o r e t h m ef a m i l y s t a t u s ( l e t ( l f l n i n f l t i o l l ( d l t e o f J u l y 1 a p p l i e d O n l y i l l c o l n l l e c t i o l lw i t h t l e f i l i n g o f t h e a l t e ( n a t i v e t a x o l n t h e s h o r t f o r m l t o f r e t i l l mi nu n d e r t h e c o m m i n i t t ( e e b i l l i t w i l l a p p l y a s w ' e l l t o b o t h t l m e l o n g 1 f o r m l l o fr e t u r n a n d t h m e ( d e c l a r a t i o n o f e s t i m a t e d t a x . I f t e r e a f t e c r n o t a x p ' a e r Ii l l f i l i n g h i s r e tu t r l l n 1 w i l l b e r e q u l i r e ( l t o p r o r a t e e x e m p t i o n s , a n d c r e d i t sb e c a u s e o f a c h a n g e i l l s t a t u s .T h e f o l l o w i n g t a b l ( T a) h ' e e n d e ' s i g n e d m f o r i n c l u s i o n i l l S l u p p l e m e l i tT o f t h e c o d e , a n d f o r i n l d u s i o n i l l t h e o p t i o n a l f o r m o f r e t 1 1 1 1 f o r u s e ,b y p l e r s o n s h a - v i n g g r o s s i n c o m e s o f $ 3 , 0 0 0 o r l e s s , c o n s i s t i n g w h o l l yo f o n e l o r more o f t h e f o l l o w i n g : s a l a r y , w a g e s , c o m p e n s a t i o n f o i rp e r s o n a l s r - v i c l e s , ( l i V i ( l e n d s , i n t e r e s t , o r n a i m n i t i e s . F o r p r i p o s e s o ft h i s r e p o i , * , a h e a v y l i n e h a s l ) e e n d r a w n t t h r o u g h t h e t a b l e a n d c r l , t a i l nf i g u r e s a r e p l ' i n l t e d i l l i t a l i c s . F i g u r e s i l l t h e t a x c o l u m n s t o t h e l e f to f t h e h i c a v y l i l e r e p r e s e n t r e g u l a r i n c o m e t a x , w h i l e t h o s e ' t o t h e r i g h tr e p r e s e n t minimum t a x . F i g u r e s p ) r i n t e ( l i l l i t a l i c s i n d i c a t e t h a t a tt h e s e p ) O i n l t s t h e - t a x j n a y e r h a s i n c o m e a b o v e t h e i n c o m e - t a x e x e m n i p f i o n san(lc r e d i t s b u t t h a t h i s m i n n i m u l n t a x i s m r r e a t e r t h i a n h i s i n c o m e t a x .

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