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Table Showing a Comparison of the Income from Tax

Free and Taxable Securities for 1918

Under the Federal Income Tax Law

The income from state, municipal and certain federal securities is free from the Federal Income Tax, and this table is included to enable the taxpayer to determine what must be the interest yield or basis of a taxable bond in order that the income therefrom, after the tax has been paid, shall equal the interest of a tax free bond. The top line of the table refers to the yields of tax free securities; the columns below show what must be the interest yield or basis of taxable securities in order that the net yield therefrom, after payment of tax, shall equal the tax free security yield shown at the top of the column. In comparing the relative advantages of taxable and tax free securities the basis of the taxable security used in the comparison is that basis which applies to the top part of a taxpayer's income. This has seemed the only practicable basis on which to make the comparison. For example: Assume an individual has a taxable income of $150,000. The table shows a tax of 64% on the top $50,000 of income. To net 32% on an investment, he must obtain for this top $50,000 of income a rate of 9.73% from taxable securities.

This table may be applied also in respect to other forms of income. It is continued showing the yield at higher ranges of income on the two following pages.

Interest Yield (i e Basis) of Tax Free of Securities

Range of Taxable Income

and Rates Applying

3% 32% 4% 41% 43% 41%

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5.18

$6,000/
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
80,000
32,000

Corresponding Return which Taxable_Securities must Produce in order to make an Equivalent

Return 3.19 3.72 4.26 4.52 4.65 4.79 3.23 8.76 4.80 4.56 4.69 4.83 3.49 4.07 4.65 4.94 5.08 6.23 3.58 4.12 4.71 5.00 6.16 8.89 3.67 4.17 4.76 5.06 6.81 5.86 3.62 4.22 4.82 5.12 5.27 8.49 3.66 4.26 4.88

5.34 8.49 3.70 4.82 4.94 8.25 6.40 8.75 4.37 5.00 5.81 5.46 5.62 3.80 4.43 5.06 5.38 5.54 5.70 3.85 4.49 5.13 5.45 6.61 8.77 3.89 4.54 5.19 5.51 5.67 6.84 8.94 4.60 5.26

5.58

5.74 8.92 4.00 4.66 8.88 8.66 5.82 6.00 4.06 4.78 5.40 5.73 5.90 6.07

18% 19% 20%

5.65

22% 24%

25%
26%

Table Showing a Comparison of the Income from Tax

Free and Taxable Securities for 1918

Under the Federal Income Tax Law

The income from state, municipal and certain federal securities is free from the Federal Income Tax, and this table is included to enable the taxpayer to determine what must be the interest yield or basis of a taxable bond in order that the income therefrom, after the tax has been paid, shall equal the interest of a tax free bond. The top line of the table refers to the yields of tax free securities; the columns below show what must be the interest yield or basis of taxable securities in order that the net yield therefrom, after payment of tax, shall equal the tax free security yield shown at the top of the column. In comparing the relative advantages of taxable and tax free securities the basis of the taxable security used in the comparison is that basis which applies to the top part of a taxpayer's income. This has seemed the only practicable basis on which to make the comparison. For example: Assume an individual has a taxable income of $150,000. The table shows a tax of 64% on the top $50,000 of income. To net 372% on an investment, he must obtain for this top $50,000 of income a rate of 9.73% from taxable securities.

This table may be applied also in respect to other forms of income. It is continued showing the yield at higher ranges of income on the two following pages.

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Corresponding Return which Taxable Securities must Produce in order to make an Equivalent Return. 4.92 5.05 5.18 5.82 5.45

8.68

5.72 5.85 6.11 6.88 4.96 5.10 95.84 5.88 5.51 8.66 5.78

5.91

6.18 6.45 5.88 5.62 3.67 8.81 5.96 6.10

6.25 6.40 6.69 6.98 6.44 8.59 26.74 5.88 6.03 6.18 6.32 6.47 6.76 7.06 5.50 8.65 6.80 5.96 6.10 6.25 6.40 6.55 6.85 7.14 6.67 5.72 8.87 6.02 6.17 6.32 6.47 6.63 6.93 7.23 5.64 5.79 5.95 6.10

6.25
6.40

6.55 6.70 7.00 7.81 5.71 6.86 6.02 6.17 6.33 6.48 6.64 6.79 17.10 7.41 8.77 5.93 6.09 6.25 6.40 6.56 6.72 6.87 | 7.18 7.50 5.85 6.01 6.17 6.32 6.48

6.64 6.80 6.96 7.27 7.59 5.98 6.09 6.26 6.41 6.57

6.73

6.89 7.05 7.377.69 6.00 6.16 6.32 6.49 6.60

6.81 6.97 7.14 7.46 7.79 6.08 6.84 6.40 6.57 6.73

6.90 7.06 7.23 7.86 7.89 6.16 6.33 6.50 6.67 6.83 7.00 7.16 7.83 7.66 8.00 6.24 6.41 6.88 6.75 6.92 7.09 7.26 7.43 7.77 8.11

28%

29%

6.61

33%

6.71

6.45

Table Showing a Comparison of the Income from Tax Free and

Taxable Securities (continued)

Interest Yield (i. e. Basis) of Tax Free Securities Range of Taxable Income

and Rates Applying 3% 3% 4% 41% 43% 41% $2,000 Exemption Allowed Corresponding Return which Taxable Securities

must Produce in order to make an Equivalent

Return. 32,000.01 34,000 27% 4.111 4.80 5.47 5.81 5.98 6.16 34,000.01 36,000

4.17 4.86 5.55 5.90 6.07 6.25 36,000.01 88,000

4.23 4.93 5.63 5.98 6.16 6.34 38,000.01 40,000 30% 4.29 5.00 5.71 6.07 6.26 6.43 40,000.01 42,000 31% 4.35 15.07 5.80 6.16 6.34 6.52 42,000.01 44,000 32% 4.41 5.14 6.88 1 6 24 6.43 44,000.01 46,000

4.47 8.22 5.97 6.34 6.52 46,000.01 48,000 34% 4.54 5.30 6.06 6.43 6.62 6.81 48,000.01 50,000

4.61 5.38 6.15 6.63 6.72 6.92 50,000.01 52,000 36% 4.68 5.46 6.25 6.64 6.83 7.03 82,000.01

54.000 37% 4.76 5.55 6.35 6.75 6.96 7.16 64,000.01

56,000
38% 4.84 5.65

6.85 7.05 7.26 56,000.01 58,000 39% 4.92 5.74 6.56 6.96 7.16 7.37 68,000.01 60,000 40% 5.00 5.83 6.66 7.08 7.29 7.50 60,000.01 62,000 41% 5.08 5.93 6.78 7.20 7.41 7.62 62,000.01 64,000 42% 5.17 6.03 6.90 7.32 7.53 7.75 64,000.01 66,000

5.26 6.14

7.45 7.67 7.89 66,000.01 68,000

5.35 6.25

7.14

7.59 7.81 8.03 68,000.01 70,000 45% 5.45 6.37 7.27 7.72 7.94 18.17 70,000.01 72,000

5.55 6.48 7.40 7.86 8.09 18.33 72,000.01 74,000 47% 5.66 6.61 7.54 8.01 8.25 8.49 74,000.01 76,000 | 48% 5.77 6.73 7.68 8.16 8.40 8.65 76,000.01 78,000 | 49% 5.88

6.86

7.84 8.33 8.57 8.82 78,000.01 80,000 50% 6.00 7.00 8.00 8.50 8.75 9.00 80,000.01 82,000

6.12 17.14 8.16 8.68 18.94 9.30 82,000.01 84,000 52% 6.25 7.29 8.34 8.86 9.12 9.38 84,000.01 86,000 53% 6.38 7.45 8.51 9.04 9.31 19.58 86,000.01 88,000 54% 6.52 7.61 8.70 9.24

9.51

19.78 88,000.01 90,000 55% 6.67 7.78 8.89 9.44 9.72 10.00 90,000.01 92,000 56% 6.82 17.96 9.10 9.66 9.94 | 10.22 92,000.01 94,000

6.98 8.15 19.31 9.89 10.18 10.47 94,000.01 96,000

7.14 8.33

10.12 10.42 10.72 96,000.01 98,000

7.32 8.53 9.76 10.37 10.67 10.98 98,000.01 100,000 60% 7.50 8.75 | 10.00 10.62 | 10.93 | 11.25 100,000.01 150,000/ 64% 8.33 9.73 11.10 | 11.80 12.15 | 12.50 150,000.01 200,000 68% 9.37 10.95 | 12.50 13.28 | 13.67 | 14.06 200,000.01 800,000 72% 10.72 12.50 14.30 16.1915.63 16.08 800,000.01 500,000 75% 12.00 14.00 16.00 17.00 | 17.50 18.00 9,000.01 1,000,000 / 76% 12.50 14.59 16.67 17.71 18.22 18.75 $1,000,000

13.04 | 15.20 17.40 18.49 | 19.03 19.58

43%

7.01

57%

58% | 59%

9.58

77%

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8.44

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7.78

Table Showing a Comparison of the Income from Tax Free and

Taxable Securities (continued)

Interest Yield (i. e. Basis) of Tax Free Securities 43% 42% 43% 5% 53% 54% 53% 54% 5% 6% Corresponding Return which Taxable Securities must Produce in order to make an Equivalent Return

6.33 | 6.50 6.67 | 6.85 7.02 7.19 7.36 7.53 7.87 | 8.22 6.42 6.59 6.77 6.94 7.11 7.29 7.46

7.63 7.98 8.33 6.51 6.69 6.87 7.04 7.21 7.39

7.56

7.74 8.09 8.45 6.61 6.79 6.97 7.15 7.32 7.50

7.67

7.85 8.21 8.57 6.70 6.88 7.06 7.25 7.43 7.61 7.79 7.97 8.33 8 69 6.79 6.98 7.16 7.35 7.53 7.72 7.90 8.09 8.45 8.82 6.89 17.08 7.27 7.46

7.65
7.84
8.03

8.21 8.58 8.96 7.00 7.19 7.38 7.57 7.76 7.95 8.14 8.33 8.71 9.09 7.11 7.30 7.49 7.69 7.87

8.06 8.25

8.82 9.23 7.22 7.42 7.61 7.81 7.98 8.18 8.38 8.58 8.96 9.37 7.34 7.54 7.74 7.94 8.12 8.32 8.52 8.73 9.12 9.53 7.46 7.66 7.86 8.06 8.26 8.46 8.66 8.86 9.27 9.68 7.57 7.98 8.19 8.39 8.60 8.80

9.01

9.42 9.83 7.70

7.91 8.12 8.33 8.53 8.74 8.94 9.16 9.58 10.00 7.81 i 8.04 8.25 8.47 8.68

8.90

9.11 9.33 9.75 10.17 7.96 8.17 8.39 8.62 8.83 9.05 9.26 9.48 9.90 10.23 8.11 8.33 8.55 8.77 8.99 9.21 9.43

9.65 10.07 10.53 8.25 8.47 8.69 8.92

9.14
9.37
9.59

9.83 10.25 10.70 8.39 8.62 8.84 9.07 9.30 9.53

9.76

10.00 10.45 10.90 8.56 18.79 9.02 9.25

9.48
9.71
9.94

10.18 10.64 11.10 8.72 8.96 9.19 9.43

9.66 9.90 10.13 10.37

10.83

11.32 8.89 9.13 9 37 9.62

9.86 10.09 10.33 10.57 11.04 11.52 9.06 9.31 9.56 9.81

10.06 10.29 10.53

10.78 11.26 11.78 9.25 9.50 9.75 10.00 10.25 10.50

10.75

11.00 11.50 12.00 9.45 9.70 9.95 10.20

10.45 10.71 | 10.96 11.21 11.73 12.25 9.64 9.90 10.15 10.40 10.66

11.18 11.45 11.97 12.50 9.84 10.10 10.36 10.62 10.89

11.16 11.43

11.70 12.23 12.77 10.05 10.32 10.59 10.87 11.14 11.41 | 11.68 11.96 12.50 13.05 10.27 10.55 10.83 11.11

11.38 11.66 11.94 12.22 12.77 13.33 10.50 10.79 11.07 11.36 11.64 11.93 12.21 | 12.50 13.07 13.65 10.76 11.05 11.34 11.63 11.92 12.21

12.50 12.80 13.38 | 13.95 11.02 11.32 11.62 11.92 12.21 | 12.51 | 12.80 | 13.10 | 13.69 | 14.29 11.28 11.59 11.89 12. 20 12.50 12.80 13.10 13.40 | 14.02 | 14.64 11.56 11.87 12.18 12.50 12.81 13.12 13.43 13.75 14.37 15.00 12.85 | 13.20 13.55 13.90

14.24 14.59 14.93 15.28 15.97 | 16.67 14.45 14.84 15.23 15.62 16.01

| 16.80 | 17.20 17.97 18.75 16.52 16.97 17.42 17.87

18.31 18.75 | 19.20 19.65 20.54 | 21.43 18.50 19.00 19.50 20.00

20.50
21.00
21.50

22.00 23.00 24.00 19.27 | 19.79 20.31 | 20.84 21.36 21.88 22.40 22.92 23.96 | 25.00 20.13 | 20.68 21.23 21.74 22.28 | 22.83 23.37 23.90 25.00 26.09

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