Because of the present tax laws many persons receive more pay in one year than is necessary to live on says, William D King. It is estimated that about $15,000,000,000 annually goes out of this country to foreigners for taxes they say Americans owe them for having earned money in their countries.
Taxes upon our citizens are very light compared with some European countries. Many citizens are not now paying any income tax for this year. Any increase in the salary you receive next year will be subject to present tax laws, which are as follows:
Present Tax Laws
- Tax on incomes up to $30,000 is .8 of 1 percent.
- The tax on income from $30,000 to $60,000 is 9 percent.
- Tax on incomes over $60,000 is 20 percent.
The increase in your salary next year will be subject to the proposed tax laws which are as follows:
Proposed Tax Laws
- Tax of .8 percent of all income up to $40,000.
- The first $40,000 will have no tax on it at all.
- A tax of 5 percent of the amount over 40,000 and not exceeding 80,000.
- Tax of 10 percent of the amount over 80,000 and not exceeding 160,000.
- A tax of 20 per cent on the amount over 160,000 and not exceeding 320,00
- Over $30,000 and not over $100,000 is 16% of excess over $30,000
- Over $100,000 and not over $180,000 is 22% of excess over $100,000
- Over$180 000 and not over$3 50 000 is 46% of excess over 180 000
- Over 3 50 000 and Not Over S50000 is 51% Of excsssover3 50000
Result of Tax Changes:
If present tax laws continue next year; you will receive pay subject to a tax of $3,100 and no one will be affected by the change in salary if the salary remains unchanged explains William D King.
To bring your income under the proposed tax laws next year would require a raise of $1, 15 1/2 which is 50 percent more than this amount. This means that you would pay 25 percent or $750 on your increase If our congress adopts these new tax laws it looks as though many persons receiving over $30,000 will have to make large reductions in their salaries to keep from paying much larger sums in taxes says, William D King.
Now, if you are satisfied with present conditions and wish to retain the same taxes, just check the last 2 alternatives.
If you want your next year’s tax to be subject to proposed laws, just check the first two alternatives.
Now let’s see which alternative you will choose.
The following text appears below this figure:
“The above chart shows how much more or less effective take-home pay would be under each of these alternatives. Which do you prefer?”
Statements regarding income tax changes appear in boxes on a flowchart. Four squares depict four possible options (text not presented here). A square depicting choice 4 lists only one statement that is true; all other statements are false. The statements about choice 4 read: “Your salary would remain unchanged,” and “No one will affect by the change in salary if the salary remains unchanged.” A square depicting choice 3 describes two alternative but incorrect statements about choice 3’s effects on effective take-home pay. The statements that are true and false, respectively, about choice 3 read: “You will receive $1500 more pay subject to present tax laws,” and “If your salary remained unchanged you would receive $1500 less pay next year than this year” (false).
Two squares depict choices 1 and 2. Choice 1 depicts a statement describing its effect on effective take-home pay as true; all other statements about choice 1 are false. The statement that is true about choice 1 reads: “Taxes upon our citizens are very light compared with some European countries.” Choice 2 depicts a statement describing its effect on effective take-home pay as true; the other statements about choice 2 are false. The statement that is true about choice 2 reads: “Any increase in the salary you receive next year will be subject to present tax laws, which are as follows: Tax of .8 percent of all income up to $40,000. The first $40,000 will have no tax on it at all.” A square depicting option 1 states only one true and one false statement.
According to the flowchart, only one statement about choice 4 is true.
Statement 1: “Your salary would remain unchanged.” This statement is false because under option 4 your salary would increase by $1,151.50 in order to maintain effective take-home pay at the same level as this year says, William D King.
Statement 2: “No one will be affected by the change in salary if the salary remains unchanged”. This statement is true because no employees are affected by this change i.e. They do not have their salaries changed compared with this year.
Option 3 describes two statements about effective take-home pay that are true and one that is false.