"According to a level where the British surtax becomes effective, take a salary of $20,000. The English normal tax on this would be $6,000 and the surtax $812.50 (figuring $5 to the pound), a total of $6,812.50. At the suggested rate of 12 percent., the American's normal tax would be $2,145.60 (rate applying to $20,000, less $1,000 exemption and $1,120 excess tax); the surtax would be $444 and the excess tax $1,120; a total of $3,709.60. If the American cut non-tax-free coupons for his income instead of working for it, his tax would be reduced to $2,780, making it more than $600, less than one-half the English tax. This, be it remembered, is figuring the American normal tax at the supposititious rate of 12 percent.
"Going abruptly to an income of $1,000,000, the American normal tax at 12 percent., would be $119,880, against an English normal tax of $300,000. The increase in the American normal tax would be $79,960 over present rates. The American surtax at present rates would be $435,300, as against a British surtax of $217,915; total American, $555,180, English, $519,687.50. No account is taken in this computation of any excess tax on the American income. With an income of $3,000,000. the American normal tax at 12 percent. would be $359,880, an increase of $239,960 over present rates. The surtax at present rates would be $1,680,300, a total of $2,040,180, or nearly 70 percent., the rate on the last $1,000,000 being at 75 percent. The corresponding British tax is, normal, $900,000, and surtax $669,685; total, $1,569,685, or nearly 52 percent., the actual maximum rate being 52½ percent. on all excess over $50,000.
"Expressed in tabular form, comparative results from a normal tax of 12 percent., combined with present surtax rates and assuming all income up to $50,000 to be earned income for a single man, would be as follows:
| Income | U.S. Tax | Per Cent. | British Tax | Per Cent. |
| $1,500 | $60.00 | 4.00 | $101.25 | 6.75 |
| 3,000 | 240.00 | 8.00 | 375.00 | 12.50 |
| 5,000 | 480.00 | 9.60 | 750.00 | 15.00 |
| 7,500 | 789.40 | 10.52 | 1,406.25 | 18.75 |
| 10,000 | 1,430.20 | 14.30 | 2,250.00 | 22.50 |
| 15,000 | 2,534.80 | 16.90 | 4,812.50 | 32.08 |
| 20,000 | 3,709.60 | 18.55 | 6,812.50 | 34.06 |
| 30,000 | 6,336.00 | 21.12 | 11,187.50 | 37.29 |
| 40,000 | 8,956.00 | 22.39 | 15,937.50 | 39.84 |
| 50,000 | 11,855.20 | 23.71 | 20,937.50 | 40.18 |
| 75,000 | 18,605.20 | 24.81 | 34,062.50 | 45.42 |
| 100,000 | 26,855.20 | 26.80 | 47,187.50 | 47.19 |
| 150,000 | 46,355.20 | 30.90 | 73,437.50 | 48.96 |
| 250,000 | 92,355.20 | 36.94 | 125,937.50 | 50.37 |
| 500,000 | 235,355.20 | 47.07 | 257,187.50 | 51.44 |
| 700,000 | 359,355.20 | 51.33 | 362,187.50 | 51.74 |
| 750,000 | 390,355.20 | 52.05 | 388,437.50 | 51.79 |
| 1,000,000 | 557,855.20 | 55.78 | 519,687.50 | 51.97 |
| 3,000,000 | 2,042,855.20 | 68.09 | 1,569,687.50 | 52.32 |
| 10,000,000 | 7,292,855.20 | 72.93 | 5,244,687.50 | 52.45 |
"With additional exemption of $1,000 for heads of families and $200 each for dependent children, the United States figures in the table would be reduced by $120 for the $1,000 exemption and $24 for each child. There are similar deductions to be made in the English figures. Furthermore, for incomes above $50,000, deduction for the excess tax has not been figured exactly in order to avoid long computations. This would slightly reduce the figure on the large incomes. But for demonstrative purposes, the table gives a fairly accurate general comparison of the range of taxes under the proposed English law and a tentative 12 percent. normal rate under our law.
"It will be noticed that the rates would come together just below $750,000. It is in the range between $5,000 and $500,000 incomes that greatest divergence in rates occurs. The British tax takes its largest jump between $10,000 and $15,000, where the surtax begins to operate. The United States gradations are erratic and irregular, showing the haphazard manner in which the steps of the surtax were applied."
ATTITUDE TOWARD WAR TAX BILL
The passing of the war tax bill was not altogether easy sailing; there was plenty of criticism from the press throughout the country. Republican editors and congressmen wondered why the bill did not contain a tax on cotton, and one Pennsylvania congressman thought that the tax levy should be at the rate of three dollars a bale. Senator Smoot of Utah attacked the bill as a bunglesome measure.
The New York Jourial Journal of Commerce called attention to the discrimination between those whose income is in the form of services or property and those who get it in cash:
"Take the case, for instance, of the salaried employee of a bank or factory who receives $5,000 a year, out of which he pays his house rent and his usual costs of living; contrast him with the case of a farmer who owns his land and obtains the bulk of what he needs, both in food, fuel, and other essentials, for himself and family in produce or in goods obtained by trade at the neighboring village; the situation becomes clear and shows why it is that the farming class pays only a microscopic proportion of the income tax at the present time."