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First Edition

War Tax

A Synopsis of the War Tax with accurate tables and concrete examples of its application to individuals, partnerships, corporations, joint-stock

companies, insurance

companies, etc.

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Published by

THE MYSELL-ROLLINS BANK NOTE CO.
Printers and Publishers

32 Clay Street, San Francisco, Cal.

us

973.1

LEN

TX

L571w

Tax on Individuals

There shall be levied, assessed, collected, and paid annually upon the entire net income received in the preceding calendar year (January Ist to December 31st), from all sources, by every individual, a citizen or resident of the United States, the following taxes:

I.

A Normal Tax of 2% upon such income.

2. An Additional, Super or Sur Tax graduated from 1% to 13% in proportion as such income exceeds $20,000.00 (see Table No. 1).

3. A War Tax of 2% upon such income.

4.

A War Additional Tax graduated from 1% to 50%, in proportion as such income exceeds $5,000.00 (see Table No. 1), and 5. A War Excess Profits Tax.. (For rates, etc. see Table No. 4).

Income Exempt from Law

(a) The proceeds of life insurance policies paid to individual beneficiaries upon the death of the insured; the amount received by the insured, as a return of premium or premiums paid by him under life insurance, endowment, or annuity contracts, either during the term or at the maturity of the term mentioned in the contract or upon the surrender of the contract; (b) the value of property acquired by gift, bequest, devise, or descent (but the income from such property shall be included as income); (c) interest upon the obligations of a State or any political sub-division thereof or upon the obligations of the United States, but, in the case of obligations of the United States, issued after September 1st, 1917, (only if and to the extent provided in connection with the issue thereof); or its possessions; or securities issued under the provisions of the Federal Farm Loan Act of July 17th, 1916; (d) the compensation of the present President of the United States during the term for which he has been elected, and the judges of the Supreme and inferior courts of the United States now in office, and the compensation of all officers and employes of a State, or any political sub-division thereof, except when such compensation is paid by the United States Government.

Income Defined

GROSS INCOME includes all gains, profits, and income derived from

(a) Salaries, wages, or compensation for personal services of whatever kind and in whatever form paid.

(b) Professions, vocations, businesses, trade, commerce, or sales or dealings in property, growing out of the ownership or use of or interest in real or personal property.

(c) Interest, rent, dividends, securities, or transaction of any lawful business carried on for gain or profit.

(d) Gains or profits and income derived from any source whatever, including the income from, but not the value of, property acquired by gift, bequest, devise or descent.

For the purpose of ascertaining the gain derived from the sale or other disposition of property, real, personal, or mixed, acquired before March 1, 1913, the fair market price or value of such property as of March 1, 1913, shall be the basis for determining the amount of such gain derived.

NET INCOME consists of the total gains, profits, and income derived from all sources (designated as GROSS INCOME) less the following General Deductions:

General Deductions

I. The necessary expenses actually paid in carrying on any business or trade, not including personal, living or family expenses;

2. All interest paid within the year on indebtedness except on indebtedness incurred for the purchase of obligations or securities the interest upon which is exempt from taxation as income;

3. Taxes paid within the year imposed by the authority of the United States (except Income and War Excess Profits Taxes), or its territories or possessions, or any foreign country, or under the authority of any state, country, school district, or municipality, or other taxing sub-divisions of any state, not including those assessed against local benefits;

DEC 26 1917

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