Indianapolis Times, Indianapolis, Marion County, 16 July 1942 — Page 13
Dominion Citizens Will Give Washington a Preview|
Of: Congressional Measure Effective in 1943;
Provides
Refunds.
By JAMES ‘MONTAGNES * ' Times Special Writer
OTTAWA, Canada, July 16.—While congress is debating income tax collection at the source and the advisability of forced savings, Canada’s parliament has announced that Canadians will start paying on their 1942 income from their pay envelopes on Sept. 1, and will have to pay as part of
their tax a portion which will be refundable after the war.
Canada has overhauled her income tax set-up for an
Rep. Celler
ee eesseve——
4 dodging,
Rep. Emmanuel Cellar (D: N. Y) said today he -had asked Chairman Andrew - J. > May (D. Ky.) of ‘the house milifaryaffairs committee for hurry-up action on his bill to rout out government officials and other evaders by
making records of all deferred cases public. ‘He ave as it became clear that national draft headquarters still had not cleared up the problem of ‘when to defer and when not to defer government big and little shofs, notwithstanding its list of 34 “essential activities” isstied this week. “Mr. Celler said he believed his bill ‘would aid public detection of “doz-’ ens of hundreds of -government workers squatting in deferred jobs, who have no more right fo them
———
Cla rification of Draft Deferment Policy
WASHINGTON, July "18, —
The “necessary act! ities” list of 34 occupations broke down 33 of these activities as to iobs or occupations for which et is recommended, but tlicre’s no such guide for draft bo: ds’ wrestling with government def:rments. Government services are simply listed as “including service: necessary for the maintenance of health, safety and morale, and the prosecution of the war.”
The war manpow: commission, war production board :nd civil serv-
than an my dog.”
for Government Employees Demande
breakdown of government jobs. This
and should end the welter of contradictory policies among the various departments. Treasury Secretary Henry W. Morgenthau has refused to ask deferments since Pearl Harbor, and the treasury .now has only eight deferred men on its rolls. But in at least two instances, deferments were granted or asked for without official treasury sponsorship. Dollar-a-year-man Paul C. Cabot
ice commission are zi work on a
wv,
of war production board's industrial
7H
may be available: within 10 days,|stand.
salvage division fakes the oppdsite He believes “important” young men in that agency shouldn't be allowed fo go into the army or navy. Brig. Gen. Prank T. ‘Hines of the
veterans administration has asked|
for deferment of attendants and technicians necessary to keep veterans’ hospitals operating, but not for clerical workers. . The Tydings special committee investigating government departments sent national draft headquarters a list of 1000 young gov-
ernment werkers whose deferments. it considered questionable, and held that no young man under 25 should be deferred as essential to government work. : \ 5 General Counsel Leon Keyserling of the national - housing agency, whose “necessary man” deferment is another of those criticised, told
a reporter he didn't believe there was & single comparable official in the government service who: had not been deferred as “necessary.”
A.
,
all-out war effort, has set a pace for steep income taxes and a new method of collecting them, just as she set the pace for price ceilings nearly six
—33 EAST WASH. ST.— Hell on
TAKE YOUR TIME TO PAY 00
gift in food and war supplies to Great Britain,
months ahead of the United States.
Canada is becoming the economic test tube for the North American
continent. Canada’s new income taxes brought them much closer to those of Great Britain, leave them much higher than those, proposed by congress. An American under the new «income taxes now being ironed out in Washington will pay about $540 if he earns $5000, is married and has two dependents.
Ten Times 1938 Rate Under the new Canadian tax plan his Canadian counterpart starts paying in September a total of $1662 on his 1942 income; will receive $600 of it back two years after the war ends with 2 per cent interest. Or, if he saves that’ amount in life insurance, annuities, pension funds or principal payments on his home mortgage, can deduct that - much from his tax and only pay the actual income tax of $1062. Last year that same Canadian paid $735, in 1938 he paid $118. His British brother pays practically the same amount, $1655, part of which is refundable after the war. Canadians staggered under the impact of the income taxes when
Because the new tax is a_departure from Canada’s iricome tax J history, the plan allows exemptions never granted before. The tax is recognized as so severe that Ottawa will now allow deductions for medjcal and dental bills, over 5 per cent of total income, but not exceeding $1000 for a married man and dependents. It Rewards the Thrifty Because the compulsory feature of the plan is anti-inflationary, meant to curtail buying of commodities requiring raw materials needed for war production, it safeguards the persons with savings commitments such as life insurance, pension funds, annuities and home mortgages. These can be deducted up to half the tax, which will otherwise be refundable after the war. But these deductions may not exceed, in the
case of single persons, 8 per cent of their income, or in the case of married persons, 10 per cent of their income with 1 per cent. allowed for each dependent. Canadians who are employed will find their pay envelope lighter each pay day after Sept. 1. Ottawa is distributing deduction tables to em-
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they were announced at Ottawa on June 23 by Finance Minister J. L. Isley. But they approved, even though it meant a definite drop in their standard of living.
Anything to Beat Axis No sacrifice, they felt, was too great to beat the axis. They were willing to cut their living expenditures, But in debate in parliament following the announcement, Canadians asked that Ottawa also curb its normal expenditures, not increase them 10 per cent as shown yn the biggest budget in Canada’s history requiring $3,900,000,000 for the 1942-43 fiscal year, the equiva-
each employee his personal savings. The tax will be deducted according to the tables, and these take into account the marital status of each person and the fact that a national deferise tax has already been collected since the beginning of the year and which now becomes the basic or normal income tax. The pay day deductions also include one-third of the compulsory savings. When the employee makes out his income tax form in the summer of 1943 he will settle with the government regarding the other two-thirds of the compulsory savings and any additional income and
lent of the national income in 1939. Canada this year will spend 53 | per cent of her national income on the war, including a $1,000,000,000
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exemption which he claims. The individual who is not employed but has his own business pays quarterly, starting ®ept. 15, ‘on his estimated 1942 income. How does a Canadian figure his new tax? It’s pretty complicated. He must earn $660 if he is single, $1200 if married. If he earns more and his tax would bring his income below these minimum fgures, he only pays the amount above the minimum. If he earns more and is single he pays a basic tax of 7 per cent on his total income up to $1800; 8 per cent if over $1800 but under $3000; and 9 per cent if over $3000. The married man pays a basic 7 per cent if over the minimum earning, with $28 off .the tax for each dependent. If both husband and wife work, each has a minimum of $660. With the basic tax figuréd, the Canadian taxpayer, whether married or single, deducts $660 from his total income, and medical exemptions allowed, then computes his tax on a graduated scale starting with 30 per cent for the first $500, 33 per cent for the next $500, dnd s0 on up to 85 per cent.
Heavy Toll Taken of Rich
From the tax derived, he may deduct, if married, $150 for his wife, $80 for each dependent. The basic tax and the graduated tax are added, forming the total tax, including the refundable portion, which in turn can be deducted if saved according to the plan. There is no ceiling for total income, but even the richest are left with only a portion of their income. Thus the married man with two dependents, earning $500,000 a year, comes out of the tax inspector's office with but $38,000, and the $50,000 man has but $16,500 left after paying his taxes. Corporations and b+ an ‘excess profits tax 1 has been upped from. 75 } ant to 100 per cent with 20 per cent returnable after the war. Excess profits are .those over the average of 1936-39. The forced savings feature of the tax is not expected to cut down on the voluntary buying of war bonds and war savings certificates
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