MEANING OF NEW TAXATION
According to a calculation published in the New York World the war revenue bill imposed a war tax of $80 on every man, woman and child in the United States, or approximately $400 for each family. The amount expected to be derived from each item is given in the following table:
| Individual income tax | $1,482,186,000 |
| Corporation income tax | 894,000,000 |
| Excess and war profits | 3,200,000,000 |
| Estate tax | 110,000,000 |
| Transportation | 164,550,000 |
| Telegraph and telephone | 16,000,000 |
| Insurance | 12,000,000 |
| Admissions | 100,000,000 |
| Club dues | 9,000,000 |
| Excise, luxury, and semi-luxury | 518,305,000 |
| Beverages | 1,137,600,000 |
| Stamp taxes—chiefly documentary | 32,000,000 |
| Tobacco and products | 341,204,000 |
| Special business and automobile-user's Taxes | 165,607,000 |
| ——————— | |
| Total | $8,182,452,000 |
With the operation of this tax the people of the United States found it no longer possible to speak in terms of opprobrium of the tax-ridden people of Europe. The American income tax has a higher rate on large incomes than that provided for under the English system. A man in the United States with an income of $5,000,000 is taxed nearly 50 percent., more than in England. The New York Tribune published tables printed below comparing the income tax rates of the United States with those existing in France and in Great Britain.
INCOME TAX COMPARISON
A compilation made for the Wall Street Journal shows that the United States income tax even with the increases made in 1918 was still far lower than the English income tax:
"The great bulk, numerically, of incomes taxed in 1917 was in the field reached by the lowering of the exemption in the 1917 law.... It is a fact, however, that no one of these new taxpayers was called on to contribute more than $40 to the government, as the rate was only 2 percent., while all other incomes paid a basic normal tax of 4 percent. The lowest rate for normal tax in Great Britain is 2 shillings and 3 pence on the pound, or 11¼ percent., and the exemption is only $600. The basic normal tax under the new English law is 6 shillings on the pound, or 30 percent., on all incomes over $25,000.
| ————— United States————— | United Kingdom | France | |||||
|---|---|---|---|---|---|---|---|
| Old Law | New Law | Rate (per cent.) | |||||
| Income | Amount | Rate (per cent.) | Amount | Rate (per cent.) | Unearned | Earned | Rate (per cent.) |
| $2,500 | $10 | .40 | $30 | 1.20 | 11.25 | 8.44 | 1.25 |
| 3,000 | 20 | .67 | 60 | 2.00 | 14.84 | 11.87 | 1.67 |
| 3,500 | 30 | .86 | 90 | 2.57 | 16.24 | 12.96 | 2.07 |
| 4,000 | 46 | 1.00 | 120 | 3.00 | 18.16 | 14.53 | 2.44 |
| 4,500 | 60 | 1.33 | 150 | 3.33 | 18.75 | 15.00 | 2.86 |
| 5,000 | 80 | 1.60 | 180 | 3.60 | 18.75 | 15.00 | 3.20 |
| 5,500 | 105 | 1.91 | 220 | 4.00 | 22.50 | 18.75 | 3.48 |
| 6,000 | 130 | 2.16 | 260 | 4.33 | 22.50 | 18.75 | 3.71 |
| 6,500 | 155 | 2.38 | 330 | 5.08 | 22.50 | 18.75 | 3.90 |
| 7,000 | 180 | 2.57 | 400 | 5.71 | 22.50 | 18.75 | 4.07 |
| 7,500 | 205 | 2.73 | 470 | 6.27 | 22.50 | 18.75 | 4.21 |
| 8,000 | 235 | 2.93 | 545 | 6.81 | 26.25 | 22.50 | 4.34 |
| 8,500 | 265 | 3.12 | 620 | 7.29 | 26.25 | 22.50 | 4.53 |
| 9,000 | 295 | 3.28 | 695 | 7.72 | 26.25 | 22.50 | 4.69 |
| 9,500 | 325 | 3.42 | 770 | 8.11 | 26.25 | 22.50 | 4.84 |
| 10,000 | 355 | 3.55 | 845 | 8.45 | 26.25 | 22.50 | 4.98 |
| 12,500 | 530 | 4.24 | 1,320 | 10.56 | 30.00 | 26.25 | 5.53 |
| 15,000 | 730 | 4.87 | 1,795 | 11.97 | 32.08 | 32.08 | 6.07 |
| 20,000 | 1,180 | 5.90 | 2,895 | 14.48 | 34.06 | 34.06 | 6.99 |
| 25,000 | 1,780 | 7.12 | 4,245 | 16.98 | 35.75 | 35.75 | 7.84 |
| 30,000 | 2,380 | 7.93 | 5,595 | 18.65 | 37.29 | 37.29 | 8.41 |
| 35,000 | 2,980 | 8.51 | 7,195 | 20.56 | 38.75 | 38.75 | 8.99 |
| 40,000 | 3,580 | 8.95 | 8,795 | 21.99 | 39.84 | 39.84 | 9.43 |
| 45,000 | 4,380 | 9.73 | 10,645 | 23.66 | 40.97 | 40.97 | 9.77 |
| 50,000 | 5,180 | 10.36 | 12,495 | 24.99 | 41.88 | 41.88 | 10.05 |
| 55,000 | 5,980 | 10.87 | 14,695 | 26.72 | 42.84 | 42.84 | 10.27 |
| 60,000 | 6,780 | 11.30 | 16,895 | 28.16 | 43.65 | 43.65 | 10.45 |
| 70,000 | 8,880 | 12.69 | 21,895 | 31.26 | 44.91 | 44.91 | 10.75 |
| 80,000 | 10,980 | 13.72 | 27,295 | 34.12 | 45.86 | 45.86 | 10.96 |
| 100,000 | 16,180 | 16.18 | 39,095 | 39.10 | 47.19 | 47.19 | 11.27 |
| 150,000 | 31,680 | 21.12 | 70,095 | 46.73 | 48.96 | 48.96 | 11.68 |
| 200,000 | 49,180 | 24.59 | 101,095 | 50.55 | 49.84 | 49.84 | 11.89 |
| 300,000 | 92,680 | 30.89 | 165,095 | 55.03 | 50.73 | 50.73 | 12.09 |
| 500,000 | 192,680 | 38.54 | 297,095 | 59.42 | 51.44 | 51.44 | 12.25 |
| 1,000,000 | 475,180 | 47.52 | 647,095 | 64.71 | 51.97 | 51.97 | 12.38 |
| 5,000,000 | 3,140,000 | 62.80 | 3,527,095 | 70.54 | 52.39 | 52.39 | 12.48 |
"If the new normal tax in the United States were made uniformly 12 percent.—wiping out the 2 percent. discrimination of the 1917 law—a single man in this country with a salary of $1,500 a year would be called on to pay $60 in income tax, as against an English tax of $101.25. Assuming that the normal tax were raised to 12 percent. and the surtax and excess tax were left as at present, an unmarried American with a salary of $10,000 would pay $1,430.20, while the unmarried Englishman would pay $2,250. If the Englishman derived his $10,000 income from rentals, his tax would be increased to $2,625, while the American tax would be reduced to $1,165—an Irish dividend on effort.