Indianapolis Times, Indianapolis, Marion County, 21 May 1942 — Page 6

10% WITHHOLDING

~ TAX IN

Collection in oy Falvance at Source Studied by

House Group. (Continued from Page One)

Geasury 40 ‘decide to ask for a flat 10. Jet cent withholding tax. withholding tax is a method of . collecting the income levy, and not an additional tax. Taxpayers next March would be given credit for the part of the tax already paid by the withholding method. The treasury plan provides for collections of part of the income tax at the source on bond interest and dividends, as well as on salaries and

Sees Lighter Burden

Mr. Paul contended the withholding system would lighten the taxpayer’s burden, would speed the government's program in combating inflation, and would aid greatly in ‘collecting income taxes from small wage earners and other individuals in the lower brackets. . Employers would be held responsible | for collecting the withholding .tax and paying it .to the government, as they are for social security payments. Mr. Paul estimated that $2,500,000,000 would be collected by the withholding method during its first full year of operation. Housewives, farmers and small tradesmen would be required to cole lect the withholding tax for the government if the wages of their maids, laborers and helpers exceeded the amounts worked out by the treasury.

Reject Income Limit

By indirection the house committee rejected President Roosevelt's recommendation to congress that no person be allowed to retain for his own use more than $25,000, after taxes. It voted to start 81 per cent surtaxes on income of $200,000 or more,

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but the new rates would permit a taxpayer to retain nearly $100,000 if he earns $500,000. To be able to keep $25,000, a taxpayer would have to earn $60,000.

Day of Reckoning Ahead

For Americans earning up to $10,000, whether or not tax withholding is finally adopted, March 15, 1943, will be a day of reckoning like it never was before. A couple with no children and an income of $3000 would pay $306 under the committee rates. This year it paid $138. (These figures do not take into account deductions that the family might be able to make for. contributions, interest, ete.) A family with a $3000 income and two children would pay $162. This year it paid $58. It will cost a single person with no dependants $447 to earn $3000 if the committee rates ‘are finally adopted by the house and senate. This year such a taxpayer paid $221.

Exemptions Lowered

children and an income of $1500 paid no taxes. The committee’s rates would make that family owe the government $45. The committee has reduced the personal exemption for such a family from $1500 to $1200. The exemption of /single persons has been cut from $750 to $500. The credit for dependents remains at $400. But in the income brackets up to $6000, the blow can be much worse if the rates originally proposed by the treasury aré adopted. The treasury recommended breaking up the first surtax bracket of $2000 into four new brackets sod that the rate on taxable income between $1500 and $2000 would have been 22 per cent. The committee retained the present bracket and imposed only a 12 per cent surtax rate on it. The surtaxes voted by the committee yesterday would apply to all income over the taxpayers’ personal exemptions and legal deductions. There is no earned income credit for surtaxes.

Credit for Earned Income

On the normal tax, which the committee this week voted to increase from 4 to 6 per cent, taxpayers are allowed a credit of 10 per cent on the first $3000 of their income, This is known legally as the earned income credit, but the first $3000 not not be earned—it may come from stocks and bonds. Income that is actually earned between $3000 and $14,000 also receives a 10 per cent credit. The effective rate on the first dollar of a taxpayer’s income under the committee’s program will be 18 per cent. It is now 10 per cent. On taxable income between $2000 and $4000 it will be 21 per cent compared with 13 now; between $4000 and $6000, 25 compared with 17; between $6000 and $8000, 29 compared with 21; between $8000 and $10,000, 33 compared with 25. Here is a comparison of present surtax rates with those proposed: Income Present Proposed Up to $2,000 6 Pet. 12 Pct. 2,000 4,000 9 15 4,000 6,000 13 19 6,000 8,000 17 23 8,000 10,000 21 27 10,000 12,000 25 31 , 12,000 14,000 29 35 14,000 16,000 32 39 18,000 20,000 38 46 20,000 22,000 41 48 22,000 26,000 44 51 26,000 32,000 47 54 32,000 38,000 50 57 38,000 44,000 53 60 44,000 50,000 55 62 50,000 60,000 57 65 60,000 70,000 59 68 70,000 80,000 61 71 80,000 90,000 63 4 90,000 100,000 64 76 1100,000 150,000 65 8

YUNNAN PROVINCE

great nt vin ek gorges, ns, roc . milavidivdlin: ‘vich hy miner.

: center of industries. Area v 190,000 59, mi. Pop.t 12,000,000

ST 4 PEeTe13 1]

TANAPO

Until this year a family with nof

___Z OLD BURMA ROAD // NEW ASSAM ROAD

UNDER CONSTRUCTION | War-boomed, mountainous Yannan province, ‘whose name means “South of the Clouds,” is the battlefield where China fights a backdoor ‘attack on Chungking. Burma Road traffic and the shifting of Chinese war industries west brought great activity to this ancient province, first conquered by Kublai Khan and now threatened by Jap drives from Burma and Indo-China. Rain may wash out Jap

hopes of reaching Chungking via Yunnan, for the monsoon season just beginning presages many soggy months in this area.

Gulf of Martaban

Here's How We Are Doing In Planes, Tanks, Ships

bled by late autumn.

tion was-adding to the sea fighting forces at the rate of 179 million dollars a day, & rate probably far in excess of naval losses in battle since war began. Cargo Ships Production had reached, this spring, a rate of one new ship a day, was aiming at an early rate of two ships a day. To meet production schedules of 8,000,000 tons of new shipping this year, the rate must pass three launchings a day this summer, It. is the weakest spot in the whole war production picture, and enemy submarines up to recent weeks have been sinking cargo ships a little faster than new ones could

each launched.

Ammunition One hundred new plants are either built or building, of which | at least half are today in production. At the end of one full year of rearming, in May, 1941, contracts had been let for 29, of which only two were in partial production, but all these, and 75 more are near completion now. In 1018, 53 ammunition factories were able to produce more explosives than England, France and Italy combined. Guns When the program began the United States had 448 anti-air-craft ‘guns of all sizes, enough world war artillery to equip the army that then existed, enough small arms of first world war vintage to equip 4,000,000 men.

day—a rate likely to be reached in mid-sumr::

(Continued from Page One)

~21 dou-

Warships , On Dec. 7 the navy had 17 battleships, 37 cruisers, 171 destroyers, 113 submarines built, and 15 battleships, 54 cruisers, 193 destroyers and 73 submarines being built. Federal reports this month indicated that naval construc-

be built—about three sunk for:

There were almost no fully modern artillery and small guns. Today, scheduled production of 20,000 anti-aircraft guns this year is being met, according to Speaker of the House Sam Rayburn, which would indicate an output in excess of 1000 a month now. The new Garand rifles are being made at a rate of more than 1000 a day, machine gun production is reported “satisfactory” and artillery building, slow and tedious at any time, is said to be ahead of sched-

ule. Pilots

Planes are useless without men to fly them. In May, 1940, army, navy and marine pilots totaled 8301, with 3873 in training. Training had increased to a rate of 7000 pilots a year by the end of 1940, to 12,000 a year by the end of 1941, and has been growing rapidly in 1942. Completion of 60,000 planes, half of them combat planes, this year, would indicate a need for 75,000 trained pilots by the end of 1942, if these planes are to be kept in action. And this would: imply a ground force of 500,000 to 750,000 men. Two years of effort, marked by failures and triumphs, blunders and confusion and brilliant successes, have got the United States ready to get ready for war. In another six months America’s military power will begin to be formidable. In another 18 months it should be overwhelming,

TOMORROW: 'V "Where Do We Go From Here?

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VC > WN

HINT ROBINSON ‘READY TO RUN’

G. 0. P. Sources Report Deputy Willing to Seek Secretary Post.

(Continued from Page One)

by the recent “purging” and alleged threats used in the battle for state

|G. O. P. committee memberships,

have asserted that they would place a candidate in the field against the organization favorite. In this connection, the name of Prank Millis, majority leader in the 1941 house, has been mentioned frequently in recent days. gq. Marion county, meanwhile, con-

in the battle for control of the nominating convention, with 311 of the 2212 delegates. The present county organization leadership is favorable to the Tucker-Ralph Gates-Burrell Wright control of the state committee. James Bradford, county chairman, has the auto license setup in the county, Joseph Daniels, district chairman, was a leader in naming Mr. Gates state chairman. With the defeat of the BradfordDaniels mayor candidate and several county favorites in the May § primary, however, local anti-organ-ization leaders are .attempting to gain control of the county committee. If they are successful, the 311 votes probably would go against the Tucke? candidate in the state convention, But the Bradford-Daniels forces are reported determined to hold their advantage, especially until after the nominating convention. After that, it is anybody’s guess on what might happen. 3

tinued to be one of the focal points]

Russ Army Breaks Through

To Kharkov 'Inner Ring

(Continued from Page One)

nounced in Moscow earlier this week and re-captured some 300 fortified localities, including several key towns and road junctions, in 10 days of hard fighting. Dispatches from the front line telling of Russian success in drawing Nazi tanks into “suicide” attacks in which units of 15 or 20 vehicles were destroyed at a time by Soviet artillery and two-man antitank rifles indicated that the main purpose of Marshal Semyon Timoshenko was to knock out German striking ‘power apd that he was succeeding. There yas little to indicate, however, what price the Red army was paying for its advances on Kharkov, where six important railroads control supplies for the Germans in the Orimea and on other fronts. +

Still Fight at Kerch

Dispatches indicated the Russians still were in action on the Kerch peninsula of the Crimea, but the

main trend of the whole southern front depended on the outcome of the Kharkov battle. Military experts said there was little or no possibility of the Germans attempting any thrust from the Crimea toward the Caucasus oil flelds until and if they were able to break through the Ukraine front toward Rostov, where they suffered a heavy defeat last year. Any attempt to cross the Kerch straits to the mainland on a short cut to the Caucasus at present merely would make the Nazis vulnerable to counter attacks unless a strong axis naval force could be mustered in the Black sea, which appears to be out of the question now. Dispatches from Istanbul said the

Russian Black sea fleet still was strong, ching mopern GUis destroyers and submarines and at least one old battleship. Thus the Kharkov battle is expected to decide the whole trend of the campaign in southern Russia. Fighting inside the Nazi hedgehog defense system—a series of spine-like fortified points stretching out from Kharkov in open flelds among the forts and in enveloping attacks on strong points as a result of the Russian breakthrough to the inner lines. The break-through did not necessarily mean that Kharkov was about to fall. ; Russ Keep Offensive

Both sides apparently have spent men and material freely in the bat-

tle and the Nazi hedgehog system is designed to make the offensive

more and more costly as it moves

closer to the city.

But it was of utmost importance

that the Red army continued to hold the offensive in the Ukraine, that the Berlin high command acknowledged continued attacks (which the Nazis said were repulsed with the “gravest” losses) and that the German attempt to launch a counter-offensive on the south flank had not developed.

The dimunition of German fank |} striking power also was likely to|f be a decisive factor in the battle |} unless Hitler can rush mechanized |

reserves to the Kharkov front. BUILD OWN SIREN

OREGON CITY, Ore. (U. P.)—|f& Oregon City has one of the largest | gs steam driven air raid sirens on the:

Pacific coast. The device was built by employes of the Hawley Pulp and Paper Co. of materials avialable

at the mill

FALLS 3 FLOORS INTO FIRE STATION BED

MARYSVILLE, Cal. (U. Plemdess Bailey, 47-year-old miner, through a skylight and om three - stories—landing unhurt in a bed beside Fire Capt. Ed Anthony in the Marysville Fire Depattment dormitory. He was arrested on a charge of being drunk and disturbing the peace.

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