The Pittsburgh Press (August 5, 1941)
HOW NEW TAX BILL RAISES $3 BILLION
Washington, Aug 5 (UP) –
A resumé of the proposed taxes and their estimated yield in the bill passed yesterday by the House follows:
Individual income taxes — $829,000,000
No changes is made in the normal 4% rate or in personal exemptions of $300 for single persons and $2,000 for married persons. The exemption of $400 for each child is retained, but a widowed head of a family cannot deduct $400 for the dependent that makes him or her head of the family.
New surtaxes begin at 5% on the first taxable dollar of income, after exemptions and deductions. The special defense tax – 10% of the amount paid in normal and surtaxes – is retained.
Corporation taxes — $1,322,900,000
Present normal graduated corporate tax of 18-24% is retained, as is the provision of current law enabling businessmen to determine excess profits by either the capital investment or average earnings methods.
Excess profits levies are increased 10 points in each bracket to 35-60%. These rates are supplemented by a special excess profit tax of 10% on the difference between the percentage earned on investments in the tax year and the percentage earned in 1936-39, inclusive.
The capital stock tax is increased from $1.10 to $1.25 per $100 valuation.
A new corporation income surtax of 5% on the first $25,000 of earnings and 6% thereafter is imposed.
Excise and miscellaneous taxes — $902,400,000
Distilled spirits
From $3 to $4 a gallon.
Wines, cordials and liquors
From 6¢, 18¢ and 30¢ a wine gallon to 8¢, 24¢ and 50¢; 14% alcoholic content, 21% and 24% or more.
Auto sales
Passenger cars and trailers from 3.5% to 7%; buses, trucks, parts and accessories from 2.5% to 5%.
Admissions
Exemption reduced from 20¢ to 9¢.
Tires
From 2.5¢ to 5¢ per pound; tubes from 4.5¢ to 9¢.
Telegraph, telephone and cable tolls
New rates start with 25¢ toll calls, instead of 50¢ calls. The brackets: 25¢ to 49¢, 5¢ tax; 50¢ to 99¢, 10¢ tax; $1 to $1.49, 15¢ tax; $1.50 to $1.99, 20¢ tax; $2 to $2.49, 25¢ tax; each additional 50¢, 5¢ tax.
Passenger transportation (rail, water, air, bus)
5% of the fare after a 35¢ exemption.
Telephone bills
5%.
Jewelry, clocks, watches, etc.
10% of retail value.
Photographic apparatus
10%.
Mechanical refrigerators, including commercial refrigerators and air conditioning equipment
Increased from 5.5% to 10%.
Sporting goods
10%.
Matches
2¢ a thousand.
Radios and parts
Increased rates from 5.5% to 10%.
Luggage
10%.
Phonographs and records
10%.
Musical instruments
10%.
Bowling alleys, billiard and pool establishments
$15 per alley or table.
Club dues
Lower exemptions.
Playing cards
Increased rates from 11¢ to 13¢ a deck.
Safety deposit boxes
Increased rates from 11% to 20% of an annual rental.
Cabarets
5% of total charge of individual bill.
Use of autos, yachts and airplanes, not including those operated by state or federal government, but including planes of commercial airlines
$5.
Slot machines and pinball machines, exempting those taking only a penny and vending merchandise such as cigarette machines
$25 a year.
Optical instruments, other than eyeglasses
10%.
Office and store machines
10%.
Electrical appliances
10%.
Rubber products (not including footwear, tires and tubes or surgical equipment)
1%.
Electrical and metal signs
10%.
Washing machines for commercial laundries
10%.
Soft drinks
One-sixth cent a bottle.
Furs
10% of retail price.
Cutlery
10%.
Cosmetics
Revised base.
Withholding tax on non-resident aliens and non-resident foreign corporations
Increased from 16.5% to 27.5%.
The radio tax (applicable to stations and networks)
Less than $100,000 in net time sales, no tax; $100,000-$500,000, 5%; $500,000-$1,000,000, 10%; in excess of $1,000,000, 15%.
The billboard tax
$1 annual free on signs up to 100 sq. ft.; $2 on those of 200 sq. ft.; $3 for those of 300 sq. ft., and $11 for those more than 600 sq. ft.
Estate and gift taxes — $151,900,000
Present $40,000 estate exemption retained. Present $40,000 lump sum and $4,000 a year exemption continued on gifts to individuals. Rate of tax sharply increased in lower brackets, with scales graduated upward. Gift taxes are 75% of estate taxes.