Word: surtaxable
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...Paul's spending tax was not simple. It began with a 10% tax on a person's total spending over the personal exemptions; this would be refunded after the war-a kind of forced savings as well as a tax. It went on to a surtax (not refundable) that climbed from 10% to 75% on expenditures in excess of $1,000 for a single person, $2,000 for a married couple and $500 for a dependent. Taxpayers were to make quarterly returns reporting their spendings; and this whole new tax system was to be imposed...
...Treasury also left the present normal corporate income tax unchanged at 24%. Instead, it would convert the present 6% and 7% surtax into a "war surtax" of maybe 31%, aimed at the most profitable corporations. One reason for not raising the normal rate: some outstanding Federal bonds are tax-exempt as to normal tax, not as to surtax. If the normal tax were increased, these bonds might become unduly attractive in comparison with new (wholly taxable) issues to come...
...ready to join the cry for a general sales tax. But a new argument was used against it: that it would increase costs and force increases in OPA's price ceilings, starting a cycle of inflation. Other tax possibilities: > Corporation taxes, now 24% (normal) plus 6% or 7% surtax, may be upped to 30% plus more surtax. > A withholding tax on personal incomes may be levied. This would operate by a flat percentage deduction from salaries and wages. By levying a 1% tax on all incomes, at the source and without exemptions (by withholding money from payrolls), Congress could...
...taxes. Of $303,000,000 in extra revenues provided by lower exemptions, these new taxpayers will contribute a scant $47,000,000. The other $256,000,000 will come from the pockets of the 10,925,000 people who now pay taxes-by lifting their incomes into a higher surtax bracket...
Technically, the normal tax rate was not increased; it is still 24%. But the new bill added a 7% "surtax," lifts the effective rate to 31%. (For incomes of less than $25,000, it is 6% and 30%.) Purpose: to tap the income corporations get from their $31,000,000,000 investment in Government bonds. Such income is ex empt from "normal" taxes, subject to surtaxes...