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The table opposite shows the amounts and rates of Income Tax on varying amounts of net income from $2,000 to $10,000,000. It is assumed that the individual taxpayer is entitled to $2,000 personal exemption. Obviously income which is free from tax under the statute, such as municipal bond interest, is not considered "net income.” The columns headed “Average Rate of Tax on Net Income” is a calculation of the rate at which the net income as a whole is taxed. Other rates appearing throughout the table do not constitute the tax levied upon the entire net income, but are the rates levied against the top part only of such income.

In the use of the table an allowance must, of course, be made for any items of income which are free from certain, but not all, of income tax rates. For example, dividends from domestic and certain foreign corporations are not liable for any normal tax. Also interest received from all Liberty Loan bonds is free from the normal tax and in certain cases free from the surtax. Thus the total amount of tax to be paid at any income level shown in the table will be less than the figure noted to the extent of the exemption which the taxpayer enjoys in connection with his dividend, Liberty Bond interest, etc.

This table may be used by non-resident alien individuals as to income arising within the United States by making the following adjustments: on an income of $3,000 add $60 to the amount of total tax; on an income of $4,000 add $120 to such tax; for $5,000 add $180; on an income of $6,000 or over add $240.

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Table of Income Tax

The first and last columns are of particular importance. The other columns are
given for statistical information and to show the method of arriving at the total.

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6,480

27
28

39

43

45

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68,000 60,000 62,000 64,000 66,000 68,000 70,000 72,000 74,000 76,000 78,000 80,000 82,000 84,000 86,000 88,000 90,000 92,000 94,000 96,000 98,000 100,000 150,000 200,000 300,000

500,000 31,000,000 2,000,000 3,000,000 5,000,000 10,000,000

1/2

Highest | Average || AMOUNT
Combined Rate of Tax Il of TOTAL
Rate of 1 on Net TAX
Tax Income

24.19 14,030
24.72 14,830
26.24 16,650
25.77 16,490
26.29 17,350
26.81 18,230
27.33 19,130

27.85 20,060 47 28.36 20,990

28.88 21,950 29.39 22,9301 29.91 23,930 30.43 24,960

30.94 26,990 53 31.45 27,060

31.97 28,130 32.48 29,230

32.99 30,350 57 33.50 31,490

34.01 32,650

34.52 33,830 60 35.03 35,030 64 44.69 67,030 68 50.52 101,030

57.68 173,030 64.61 323,030 70.30 703,030 73.65 1,473,030 74.77 2,243,030 75.66 3,783,030 76.33 17,633,030

6,720 6,960 7,200 7,440 7,660 7,920 8,160 8,400 8,640 8,880 9,120 9,360 9,600 9,840 10,080 10,320 10,560 10,800 11,040 11,280 11,520 17,620 23,520 35,520 69,520 119,620 239,520 369,520 599,520 1,199,620

41 42

12

7,550
8,110
8,690
9,290
9,910
10,550
11,210
11,890
12,590
13,310
14,050
14,810
15,590
16,390
17,210
18,050
18,910
19,790
20,690
21,610
22,560
23,510
49,510
77,510
137,510
263,510
583,510
1,233,510
1,883,510
3,183,510
6,433,610

12

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60
63

64

The following method may be used in computing the amount of income tax due on a net income of $45,000. The individual taxpayer is assumed to have a personal exemption of $2,000. For convenience and simplicity the normal and surtax rates have been combined in the example:

Amount of Tax Personal exemption of $2,000........

......... 6% on $3,000 (Amt. exceeding $ 2,000 not exceeding $ 5,000)........ 180 7% on 1,000 ( "

5,000"

6,000)........ 70 14% on 2,000 ( “

6,000"

8,000)........

280 15% on 2,000 ( "

8,000"
10,000)...

300 16% on 2,000 ( "

10,000“

12,000).

320 17% on 2,000 ( "

12,000 “

14,000)........ 340 18% on 2,000 ( "

14,000 “

16,000).....

360 19% on 2,000 ( "

16,000“

18,000)........ 380 20% on 2,000 ( "

18,000

20,000).....

400 21% on 2,000 ( "

20,000“

22,000)........ 420 22% on 2,000 ( "

22,000 “

24,000)........

440 23% on 2,000 ( "

24,000“

26,000)........ 460 24% on 2,000 ( "

26,000 “

28,000)........ 480 25% on 2,000 ( "

28,000“

30,000)........

500 26% on 2,000 ( "

30,000 “

32,000)........ 520 27% on 2,000 ( "

32,000“

34,000).

540 28% on 2,000 ( “

34,000“

36,000)........

560 29% on 2,000 ( "

36,000

38,000)........ 580 30% on 2,000 ( “

38,000“

40,000)........ 600 31% on 2,000 ( "

40,000 “

42,000)........ 620 32% on 2,000 ( "

42,000“

44,000).......

640 33% on 1,000 ( "

44,000“

45,000)........ 330

......

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