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| . ALTERNATIVE PROCEDURES UNDER THE PLAN 1. EXEMPTION CERTIFICATES - Under the plan, employers would accept the statement of employees as to marital and dependent status. An alternative procedure would be to require employees to apply to the Bureau of Internal Revenue for exemption certificates. /54/ In the application, the employee would set forth (a) the names of all persons claimed as dependents and (b) his social security number. The Bureau of Internal Revenue would prepare exemption and deduction certificate books for each social security account number. The cover of the book and each weekly exemption and deduction certificate would bear the printed social security number. Each book would contain 40 dated certificates stipulating the amount of income exempt from withholding. /55/ Each week the employee would turn over the certificate for that week to the employer. This would authorize the employer to refrain from withholding on the amount indicated on the certificate. If, due to unemployment for a period, the employee could not use any of the certificates, he would be permitted to use them during any subsequent weeks of the taxable year during which he was employed. This system of providing for allowances would probably insure more accurate reporting of marital status and dependents than the suggested plan. It would also insure that when employment was interrupted during the year, no tax would be withheld when the employee went back to work until full use of the exemption certificates had been made. The main difficulty of this system of exemptions is its cumbersomeness. Exemption certificate books would need to be issued to almost 40 million workers covered by social security. Each of these books would contain 40 coupons or a total of 1.6 billion coupons a year. Aside from the cost of printing and distribution, a considerable amount of time would be needed to set up such a system. Further the sheer handling of so large a number of coupons would be burdensome to employers and the Government and also to employees insofar as they had to fill in and mail applications for exemption certificates. Since an end of year return is required, it is doubted that the added accuracy in determining marital and dependent status for withholding purposes merits the added complexity of exemption certificates. If there should be any inaccuracy in withholding which results in collecting at source less than the proper amount, the employee would have less to credit against his total tax liability at the end of year and hence would have a larger amount of tax payable at that time. 2. Salaries and Wages of Persons not Covered by Social Security or Other Federal Retirement Plan, and Business Income - Under the suggested plan, the tax is not likely to work efficiently with respect to agricultural, domestic and casual workers. The problems involved in attempting to collect a tax at source from such workers were discussed above (page 9). As shown in Table 3, less than 4 percent of agricultural workers earned as much as $600. Wages of domestics were predominantly at a similar level. Failure of the withholding tax to apply is therefore not fatal since only a very small proportion of such employees are likely to have total annual income in excess of the allowances. With respect to business income, a procedure might be instituted which would collect the tax on such income currently. A tentative tax might be determined quarterly on the basis of one-fourth of the prior year's net income. This tax would be credited against the total tax liability as determined on the basis of an end of year return. Such a procedure may impose an undue burden on the self-employed and small business man whose income in the current year is less than his income was during the past year. Further, business income represents only 10 percent of total income (Table 4) and is therefore of minor importance from the standpoint of inflation control. Under the suggested plan, business income, like income from all other sources would be subject to tax at the end of the year. It is doubted whether collection of tax on this source of income more currently than on an annual basis is necessary. 3. RETURNS BY EMPLOYERS - Under the suggested plan, no information returns from employers are intended with respect to the withholding tax. It is believed that the system will be self-policing, the employee demanding that he receive stamps from the employer on behalf of tax withheld. Since such returns are usually required, however, consideration might be given to the possibility of quarterly returns. On these returns employees' names, addresses, social security number (if any), total wages and salaries paid during the quarter, marital and dependent status claimed and tax withheld would be shown. Attention might be given to coordinating this return with the one now required for old-age insurance purposes and which contains some-what similar information. Whether or not such a return should be required, depends upon the type of tax administration intended. If a record for each employee is to be set up which will take off the information shown on employers' returns and against which will be checked the end of year returns filed by individuals, then employer returns would be valuable. If this degree of check is not found practicable, then, aside from (a) discouraging employers from attempting to defraud employees with respect to tax withheld at source and (b) supplying statistical data, it is not evident that a quarterly return by employers would serve any necessary purpose. C. RESPONSIBILITIES OF EMPLOYERS, EMPLOYEES AND THE TREASURY UNDER THE SUGGESTED PLAN 1. RESPONSIBILITIES OF EMPLOYERS - Each employer would be supplied with a schedule showing weekly exemption and deductions allowed for purposes of the special withholding tax on salaries and wages. (See Table 20). He would receive from each employee a statement of marital and dependent status. On the basis of such statement, the employer would determine the tax at a flat rate on the amount by which the salaries and wages paid exceeded the weekly allowance. The employer would purchase stamps from post offices or the collectors' offices in such denominations as are needed to give each employee stamps equivalent to the amount of tax withheld. On payday, the employer would turn over to the employee his pay less tax and the equivalent of the tax in stamps. 2. RESPONSIBILITIES OF EMPLOYEES - Upon entering a new employment, each employee would certify to the employer his marital and dependent status and subsequently, any changes in such status. When the employee received stamps equivalent to amounts of pay withheld, he would countersign them in order to protect himself against theft, and accumulate them until the end of the year. At the end of the year, he would file a return reporting income from all sources and total tax liability. Against the total tax, the tax withheld at source, as evidenced by stamps, would be credited. The return, together with all stamps, would be sent to the Collector of Internal Revenue. If total liability exceeded the amount of stamps available, the difference would be paid in cash; if the amount of stamps exceeded total tax liability, the excess of stamps would be cashed by the Bureau of Internal Revenue and returned to the taxpayer. 3. RESPONSIBILITIES OF THE TREASURY - The Treasury would make available stamps in convenient denominations. These stamps would be placed on sale at offices of the Collectors of Internal Revenue and post offices. When annual returns are filed, the liability shown thereon would be taken as prima facie evidence of the correct liability. Any excess of stamps over total tax liability shown on a return would be cashed promptly and returned to the taxpayer. If, upon audit, additional amounts are found to be due, the present procedure with respect to additional assessments would be followed. APPENDIX I Description of income tax payment plan by Dr. Carl Shoup Dr. Shoup has suggested the following revision for the payment of the income tax /56/:
APPENDIX II REFUND PROCEDURE The following steps are involved in making a tax refund:
This procedure constitutes the minimum for any refund and, according to the Clearing Division of the Bureau of Internal Revenue, involves an administrative cost of from $3 to $4 per refund. The administrative work in making approximately 75,000 refunds annually costs at present almost $200,000. Under present procedure, the same steps are followed for small refunds as for large ones. The time involved for making a refund depends upon the time of the year when the claim for refund is filed. After certification by the Collector, action on a refund may take from three weeks to several months in the Bureau and an equal amount of time in the Comptroller General's office. If the volume necessitated it, the time could be cut down somewhat. With respect to the standard of auditing, the Bureau's procedure might be simplified somewhat by omitting the Bureau audit of the Collector's certification and accepting the Collector's claim without further question. It is doubted, however, that anything could be done insofar as the Comptroller General's office was concerned. At present, the Bureau is called upon from time to time to supply the Comptroller General with minute details as respects refunds of even small amounts, and serious question may be raised as to whether the Comptroller General's office would relax any of its standards with respect to auditing each claim individually. SUMMARY OF STATISTICAL INFORMATION 1. NUMBER OF EMPLOYEES AND EMPLOYERS. Most recent data indicate that the entire working force numbers between 50.6 and 55.6 million persons. Of these, from 39.9 to 41.6 or over 75 percent are employed in industries covered by the old-age provisions of the Social Security Act or other Federal retirement plans. Of the 10.7 to 14.0 million workers in the uncovered industries, about 3.3 million are agricultural workers, 2.2 million domestic servants and from 1.2 to 3.5 million casual workers. About 5 million are in public employment. The total number of employers is about 7.5 million. Of these 2.6 million or 35 percent are employers in covered industries and 4.9 million or 65 percent are employers in uncovered industries. Agricultural and domestic workers numbering 5.5 million are employed by from 4.8 to 5.1 million, or almost as many employers as employees. (Tables 2 and 16.) 2. SHIFTING LABOR FORCE. Between 1.6 and 3.7 million workers, or from 6.0 percent to 12.6 percent of the total workers covered by the old-age provisions of the Social Security Act during the period January 1938 - June 1940, were temporary employees. (Table 1.) Part-time employment was more frequent in the low-income groups than in the high ones. In 1938, 89 percent of those earning less than $200 during the year worked during one quarter of the year only; 1.3 percent of those working one quarter earned $1,000 or more. (Text, p. 9.) On the other hand, 90 percent or more of the workers earning $1,000 or more were employed during all four quarters of the year and 98 percent or more worked 36 or more weeks out of the year. (Text, p. 29, note 1.) 3. SOURCES OF INCOME. Salaries and wages constitute the most important source of income. For 1937, this source represented 57.9 percent of total income reported on returns with net income. Dividends constituted 14.4 percent and business profits 10.2 percent. (Table 4.) (a) SALARIES AND WAGES. Salaries are most important in the low-income classes. For persons with net incomes under $5,000 for 1937, salaries and wages amounted to $10.3 out of a total income of $14.0 billion, or 73.6 percent. For persons with net incomes of $25,000 or over, salaries and wages amounted to $0.8 out of a total income of $3.6 billion, or 21.6 percent. Further, salaries of those with net income under $5,000 amounted to 73.0 percent of the total salaries of $14.1 billion reported for income tax purposes. Of 5.3 million returns with statutory net income filed for 1936, 2.4 million, or 45 percent, showed salaries and wages only; 3.3 million, or 62 percent, showed salaries and wages and not more than one other source of income; and 4.0 million, or 75 percent, showed salaries and wages alone or in combination with one or more sources of income. (Table 6.) Where salaries and wages were combined with another source of income, the other source of income, except in the case of business profits, was small. (Table 7.) -------------------------------------------------- Source of Percent of returns showing income income in from specified source of combination with salaries Less than Less than and $100 $500 wages -------------------------------------------------- Interest 79.5% 96.1% Dividends 49.3 76.9 Business profit 4.8 22.7 Rents 17.8 72.1 -------------------------------------------------- (b) BUSINESS INCOME. Business income constituted the only source of income on 370,000 returns and was the only source of income for one-half or more of all persons with total incomes of not over $1,000 in 1936. (Table 8.) As noted above, business income was also a relatively important source of income when combined with salaries and wages, since 75 percent of persons receiving income from this source reported more than $500. (Table 7.) In few cases, however, did business profits exceed salaries in amount for persons receiving income from both sources. (c) OTHER. Other sources of income did not represent important sources of income either alone or in combination with salaries and wages. (Tables 4, 6, 7, 8.) 4. SIZE OF AGRICULTURAL WORKERS' AND DOMESTICS' INCOME. The total income of agricultural workers and domestics is generally below the exemption levels of the income tax. A sample study showed that 96 percent of agricultural workers and a like percent of domestics earned less than $600 a year. (Table 3.) 5. SELF-EMPLOYED. For 1935-1936 there were approximately 8.9 million self-employed. Of these 6.2 million, or 70 percent, were farm operators and 2.7 million, or 30 percent, were self-employed other than farm operators. The family incomes of farm operators were somewhat lower than other self-employed. Seventy-five percent of farm operators had family income of less than $1,500, and 5 percent had $3,000 or more. In the case of other self-employed, the percentages were 45 and 22 respectively. (Tables 9 and 10.) In the aggregate, unincorporated business represents an important portion of total national income. For 1940, it is estimated that such businesses produced 16.4 percent of total national income. (Text, p. 14.) (a) FARM PROPRIETORSHIPS AND PARTNERSHIPS. Income tax returns were filed by 54,000 farm proprietorships and 19,000 partnerships for 1936. Analysis of a sample of the returns of farm proprietors shows that about 46 percent reported total receipts of less than $5,000 and 70 percent reported total receipts of less than $10,000. Almost three-fourths of the farmers reporting for income tax purposes showed profit. (Tables 11, 12.) About 83 percent of farm partnerships reported net income. Of these, over three-fourths reported less than $5,000. (Table 15.) (b) PROPRIETORSHIPS AND PARTNERSHIPS OTHER THAN FARM OPERATORS. About 699,000 proprietorships and 211,000 partnerships other than farm operators filed income tax returns for 1936. Analysis of a sample of the returns of such partnerships shows that about 19 percent reported total receipts of less than $5,000 and 44 percent reported total receipts of less than $10,000. About 90 percent of proprietorships and partnerships other than farm operators reporting for income tax purposes showed net profit from business. (Tables 13, 14.) About 88 percent of partnerships other than farm operators reported net income. Of these, about two-thirds reported less than $5,000. (Table 15.) 6. CONSUMER INCOMES AND EXPENDITURES. For 1935-1936, total income of single individuals and families amounted to $59.3 billion. Of this amount only $18.3 billion was received by persons with incomes of $3,000 or more and only $11.6 billion, or 20 percent, by persons with incomes of $5,000 or more. (Table 18.) Expenditures were also concentrated in the low-income brackets. Of total expenditures of $50.2 billion, only $5.8 billion, or 12 percent, was spent by persons with incomes of $5,000 or more. (Table 19A.) For single persons and families combined, expenditures exceeded income in the income classes under $1,000. Those in the income classes below $1,500 spent the greatest proportion of their incomes for food, housing, household operation (fuel, light, etc.) and clothing. Seventy-five percent to 85 percent of the expenditures of these persons was for such items. As incomes increased, expenditures for these items became relatively less important and expenditures for automobiles and other consumer goods increased. Savings were shown by those with incomes over $1,000. Persons in the income class $1,000 - $1,500 saved 6 percent, or less of their total incomes. Savings increased with size of income and amounted to almost half of total income for persons with incomes of $5,000 or more. (Table 19A.)
[Part 1 of 2]
Table 1
Estimate of number of part-time employees in industries covered by
the old-age provision of the Social Security Act, January, 1938-June
1940
-----------------------------------------
Number of employees earning
Year Taxable wages
and On last day Total
quarter or payroll during year or
in quarter quarter
-----------------------------------------
1938 - 31,200,000
Jan.-March 23,000,000 25,100,000
Apr.-June 23,000,000 25,100,000
July-Sept. 23,800,000 25,900,000
Oct.-Dec. 23,600,000 26,700,000
1939 - 33,600,000
Jan.-March 24,300,000 25,900,000
Apr.-June 25,300,000 27,300,000
July-Sept. 26,000,000 28,100,000
Oct.-Dec. 25,700,000 29,400,000
1940
Jan.-March 26,700,000 28,400,000
Apr.-June 26,600,000 28,900,000
-----------------------------------------
[Part 2 of 2]
Table 1
Estimate of number of part-time employees in industries covered by
the old-age provision of the Social Security Act, January, 1938-June
1940
--------------------------------------------------------------
Part-time employees - Part-time employees
Year Difference between number as a percent of
and employed during quarter and total number of
quarter on last day or payroll in employees during
quarter year
--------------------------------------------------------------
1938 - -
Jan.-March 2,100,000 8.4%
Apr.-June 2,100,000 8.4
July-Sept. 2,100,000 8.1
Oct.-Dec. 3,100,000 11.6
1939 - -
Jan.-March 1,600,000 6.2
Apr.-June 2,000,000 7.3
July-Sept. 2,100,000 7.5
Oct.-Dec. 3,700,000 12.6
1940
Jan.-March 1,700,000 6.0
Apr.-June 2,300,000 8.0
--------------------------------------------------------------
Treasury Department, Division of Tax Research. Source: Social Security Bulletin, November 1940, page 79.
Table 2
Employments not covered by the old-age provisions of the Social
Security Act or other Federal retirement plan: number of
workers, amount of earned income and number of employers,
1940
--------------------------------------------------------------------
Number of Earned Number of
Type of worker /1/ workers income employers
(thousands) (millions) (thousands)
--------------------------------------------------------------------
Agricultural workers 3,300 745 /4/ 2,600
Domestic servants 2,200 - 2,500 1,200 - 1,350 2,200 - 2,500
Employees in public
employment /2/ 3,300 - 3,800 4,600 - 5,300 160
Employees of non-profit
institutions 700 - 900 730 - 840 /5/
Miscellaneous /3/ 1,200 - 3,500 600 - 1,050 /5/
--------------------------------------------------------------------
FOOTNOTES TO TABLE
Treasury Department, Division of Tax Research
Source: (1) Number of workers and earned income (except
agricultural workers' earned income) based on informal estimate from
Bureau of Research and Statistics. Social Security Board: (2)
agricultural workers' earned income from Survey of Current Business,
June 1941: (3) number of employers based on 1930 Census of
Agriculture, Municipal Yearbook, 1940 and informal estimates from
Bureau of Research and Statistics, Social Security Board.
/1/ Excludes employment on work relief programs.
/2/ Includes employees of State and local governments and their
instrumentalities and those employees of the Federal Government and
its instrumentalities not covered by Federal retirement plans.
/3/ Primarily casual workers.
/4/ Includes estimated value of board and room.
/5/ Not available.
END OF FOOTNOTES
Table 3
Employments not covered by the old-age provisions of the
Social Security Act or other Federal retirement plan:
frequency distributions of income
A. Agricultural workers: total annual income from all sources, 1936
----------------------------------
Workers
Total annual Percent of
income classes Number
total
----------------------------------
Under 200 878 45.8
200 - 400 791 41.3
400 - 600 177 9.2
600 and over 69 3.7
Total 1,915 100.0
----------------------------------
Treasury Department, Division of Tax Research
Source: Survey of Agricultural Labor Conditions conducted by the
Works Progress Administration during 1936 in the following
counties: Wayne, Pa.: Archuleta, Col.: Livingston,
Illinois; Hamilton, Iowa: Pawnee, Kan.: Todd, Ky.:
Concordia Parish, La.: Lac Qui Parle, Minn.: and Karnes,
Texas. Prepared under the direction of the U.S. Department
of Agriculture, 1937.
Table 3
(Continued)
Employments not covered by the old-age provisions of the
Social Security Act or other Federal retirement plan:
frequency distributions of income - (Continued)
B. Domestic servants: cash wages
I. Monthly Wages
--------------------------------
Monthly wage Servants
classes Number Percent of
total
--------------------------------
Under 15 27 3.4
15 - 25 235 29.5
25 - 35 310 38.9
35 - 45 139 17.4
45 - 60 73 9.2
60 and over 13 1.6
Total 797 100.0
--------------------------------
II. Weekly Wages
----------------------------------
Weekly wage Servants
classes Number Percent of
total
----------------------------------
Under 3.50 25 2.9
3.50 - 7.50 326 38.3
7.50 - 11.50 198 23.3
11.50 - 15.50 235 27.6
15.50 and over 67 7.9
Total 851 100.0
----------------------------------
Treasury Department, Division of Tax Research
Source: For sample based on monthly wages, "Household Employment in
Seattle" prepared by the Advisory Committee on Social
Security to the Board of County Commissioners, King County,
Washington, 1937 and study of Household Employees in Los
Angeles, prepared by the YWCA, 1939; for sample based on
weekly wages, "Household Employment in Hartford, Waterbury
and Litchfield, Connecticut" published by the Connecticut
Department of Labor in cooperation with the YWCA of
Hartford, 1936.
Table 4
Individual returns with net income, 1937 /1/: Selected sources
of income, frequency of each source, and percent each
source is of total income
(Amounts in thousands of dollars)
---------------------------------------------------------------------
Number
Sources of income of Amount Percent
returns
---------------------------------------------------------------------
Salaries, wages, commissions,
fees, etc. 5,120,168 $14,148,510 57.9
Dividends 1,694,281 3,514,293 14.4
Taxable interest 1,745,293 910,304 3.7
Partnership profit 242,410 1,139,301 4.6
Rents and royalties 681,455 758,444 3.1
Business profit 787,712 2,493,426 10.2
Other income /2/ /3/ 1,489,821 6.1
Total income 6,350,148 /1/ $24,454,099 100.0
---------------------------------------------------------------------
FOOTNOTES TO TABLE
Treasury Department, Division of Tax Research
/1/ 6,350,148 returns with net income were filed for 1937.
/2/ Includes income from fiduciaries, net capital gain and other
income not separately shown.
/3/ Not available.
END OF FOOTNOTES
[Part 1 of 2]
Table 5
Individual returns with net income, 1937 /1/, by net income classes:
Selected sources of income, frequency of each source, and percent
each source is of total income
(Net income classes and amounts in thousands of dollars)
-------------------------------------------------------------------
Net income classes
Sources of income Total
Under 5 /2/ 5 under 10
-------------------------------------------------------------------
Salaries, wages, commissions,
fees, etc.:
Number of returns 5,120,168 4,663,873 309,550
Amount $14,148,510 $10,328,531 $1,849,041
Percent 100.0 73.0 13.1
Dividends:
Number of returns 1,694,281 1,246,946 261,469
Amount $3,514,293 $733,763 $479,600
Percent 100.0 20.9 13.7
Taxable interest:
Number of returns 1,745,293 1,361,145 218,587
Amount $910,304 $430,426 $162,253
Percent 100.0 47.3 17.8
Partnership profit:
Number of returns 242,410 149,673 55,318
Amount $1,139,301 $312,243 $276,943
Percent 100.0 27.4 24.3
Rents and royalties:
Number of returns 681,455 525,383 97,515
Amount $758,444 $433,575 $134,930
Percent 100.0 57.2 17.8
Business profit:
Number of returns 787,712 651,904 99,615
Amount $2,493,426 $1,430,551 $565,498
Percent 100.0 57.4 22.7
Other income /3/:
Amount $1,489,821 $368,700 $235,348
Percent 100.0 24.8 15.8
Total income:
Amount $24,454,099 $14,037,789 $3,703,613
Percent 100.0 57.4 15.2
-------------------------------------------------------------------
[Part 2 of 2]
Table 5
Individual returns with net income, 1937 /1/, by net income classes:
Selected sources of income, frequency of each source, and percent
each source is of total income
(Net income classes and amounts in thousands of dollars)
-------------------------------------------------------
Net income classes
Sources of income
10 under 25 25 and over
-------------------------------------------------------
Salaries, wages, commissions,
fees, etc.:
Number of returns 113,452 33,293
Amount $1,192,217 $778,721
Percent 8.4 5.5
Dividends:
Number of returns 135,979 49,887
Amount $721,875 $1,579,055
Percent 20.5 44.9
Taxable interest:
Number of returns 116,220 49,341
Amount $165,078 $152,547
Percent 18.1 16.8
Partnership profit:
Number of returns 27,636 9,783
Amount $279,487 $270,628
Percent 24.5 23.8
Rents and royalties:
Number of returns 43,466 15,091
Amount $103,385 $86,554
Percent 13.6 11.4
Business profit:
Number of returns 30,342 5,851
Amount $337,600 $159,777
Percent 13.5 6.4
Other income /3/:
Amount $308,729 $577,044
Percent 20.7 38.7
Total income:
Amount $3,108,371 $3,604,326
Percent 12.7 14.7
-------------------------------------------------------
FOOTNOTES TO TABLE
Treasury Department, Division of Tax Research
/1/ 6,350,148 returns with net income were filed for 1937.
/2/ Estimated.
/3/ Includes income from fiduciaries, net capital gain and other
income not separately shown.
END OF FOOTNOTES
[Part 1 of 4]
Table 6
Individual income tax returns with statutory net income, Forms 1040
and 1040A, for 1936: Number of returns showing only one or two
sources of income with salaries and wages as a source of income,
classified by size of salaries and wages and by source of income /1/
---------------------------------------------
Total number of returns
Size showing not more than
of two sources of income
salaries and wages with salaries and wages
as one of the sources
---------------------------------------------
Under $ 500 25,020
$ 500 - 800 23,862
800 - 1,000 26,706
1,000 - 1,500 1,085,140
1,500 - 2,000 552,773
2,000 - 2,500 278,980
2,500 - 3,500 739,040
3,500 - 5,000 333,883
5,000 - 7,000 121,797
7,000 - 10,000 52,372
10,000 - 25,000 34,931
25,000 - 50,000 2,777
50,000 - 100,000 356
100,000 - 1,000,000 50
1,000,000 and over 2
Total 3,277,689
Under $ 500 100.0%
$ 500 - 800 100.0
800 - 1,000 100.0
1,000 - 1,500 100.0
1,500 - 2,000 100.0
2,000 - 2,500 100.0
2,500 - 3,500 100.0
3,500 - 5,000 100.0
5,000 - 7,000 100.0
7,000 - 10,000 100.0
10,000 - 25,000 100.0
25,000 - 50,000 100.0
50,000 - 100,000 100.0
100,000 - 1,000,000 100.0
1,000,000 and over 100.0
Total 100.0
---------------------------------------------
[Part 2 of 4]
Table 6
Individual income tax returns with statutory net income, Forms 1040
and 1040A, for 1936: Number of returns showing only one or two
sources of income with salaries and wages as a source of income,
classified by size of salaries and wages and by source of income /1/
--------------------------------------------
Returns showing
Size
of Salaries Salaries
salaries and wages only and
dividends
--------------------------------------------
Number of returns
Under $ 500 4,646 1,888
$ 500 - 800 7,901 1,928
800 - 1,000 12,086 2,391
1,000 - 1,500 904,135 42,783
1,500 - 2,000 427,659 28,815
2,000 - 2,500 192,232 24,207
2,500 - 3,500 526,645 70,483
3,500 - 5,000 215,706 51,145
5,000 - 7,000 69,319 27,892
7,000 - 10,000 26,784 15,568
10,000 - 25,000 14,024 14,258
25,000 - 50,000 764 1,500
50,000 - 100,000 108 176
100,000 - 1,000,000 18 24
1,000,000 and over - 1
Total 2,402,027 283,059
Percent distribution
of returns
Under $ 500 18.6% 7.5%
$ 500 - 800 33.1 8.1
800 - 1,000 45.2 9.0
1,000 - 1,500 83.3 3.9
1,500 - 2,000 77.4 5.2
2,000 - 2,500 68.9 8.7
2,500 - 3,500 71.3 9.5
3,500 - 5,000 64.6 15.3
5,000 - 7,000 56.9 22.9
7,000 - 10,000 51.2 29.8
10,000 - 25,000 40.1 40.8
25,000 - 50,000 27.5 54.0
50,000 - 100,000 30.3 49.5
100,000 - 1,000,000 36.0 48.0
1,000,000 and over - 50.0
Total 73.3 8.6
--------------------------------------------
[Part 3 of 4]
Table 6
Individual income tax returns with statutory net income, Forms 1040
and 1040A, for 1936: Number of returns showing only one or two
sources of income with salaries and wages as a source of income,
classified by size of salaries and wages and by source of income /1/
----------------------------------------
Returns showing
Size
of Salaries Salaries
salaries and wages and and
interest rents
----------------------------------------
Number of returns
Under $ 500 1,598 1,911
$ 500 - 800 2,021 1,792
800 - 1,000 3,338 1,927
1,000 - 1,500 92,919 13,688
1,500 - 2,000 57,783 13,016
2,000 - 2,500 30,967 13,020
2,500 - 3,500 75,504 32,448
3,500 - 5,000 34,930 14,772
5,000 - 7,000 11,761 5,409
7,000 - 10,000 4,354 2,152
10,000 - 25,000 2,847 1,293
25,000 - 50,000 232 71
50,000 - 100,000 31 9
100,000 - 1,000,000 5 -
1,000,000 and over 1 -
Total 318,291 101,508
Percent
distribution of
returns
Under $ 500 6.4% 7.6%
$ 500 - 800 8.5 7.5
800 - 1,000 12.5 7.2
1,000 - 1,500 8.6 1.3
1,500 - 2,000 10.4 2.4
2,000 - 2,500 11.1 4.7
2,500 - 3,500 10.2 4.4
3,500 - 5,000 10.5 4.4
5,000 - 7,000 9.7 4.5
7,000 - 10,000 8.3 4.1
10,000 - 25,000 8.2 3.7
25,000 - 50,000 8.4 2.6
50,000 - 100,000 8.7 2.5
100,000 - 1,000,000 10.0 -
1,000,000 and over 50.0 -
Total 9.7 3.1
----------------------------------------
[Part 4 of 4]
Table 6
Individual income tax returns with statutory net income, Forms 1040
and 1040A, for 1936: Number of returns showing only one or two
sources of income with salaries and wages as a source of income,
classified by size of salaries and wages and by source of income /1/
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Returns showing
Size Salaries Salaries Salaries
of and and and all other
salaries and wages business partnership types of income
income income /2/
--------------------------------------------------------------
Number of returns
Under $ 500 10,195 2,928 1,854
$ 500 - 800 6,333 2,208 1,679
800 - 1,000 3,799 1,362 1,803
1,000 - 1,500 10,099 4,021 17,495
1,500 - 2,000 8,096 3,890 13,514
2,000 - 2,500 5,619 2,939 9,996
2,500 - 3,500 6,330 3,965 23,665
3,500 - 5,000 2,757 2,416 12,157
5,000 - 7,000 1,269 1,351 4,796
7,000 - 10,000 533 705 2,276
10,000 - 25,000 296 544 1,669
25,000 - 50,000 17 43 150
50,000 - 100,000 1 10 21
100,000 - 1,000,000 - 1 2
1,000,000 and over - - -
Total 55,344 26,383 91,077
Percent distribution of returns
Under $ 500 40.8% 11.7% 7.4%
$ 500 - 800 26.5 9.3 7.0
800 - 1,000 14.2 5.1 6.8
1,000 - 1,500 .9 .4 1.6
1,500 - 2,000 1.5 .7 2.4
2,000 - 2,500 2.0 1.0 3.6
2,500 - 3,500 .9 .5 3.2
3,500 - 5,000 .8 .7 3.7
5,000 - 7,000 1.0 1.1 3.9
7,000 - 10,000 1.0 1.3 4.3
10,000 - 25,000 .8 1.6 4.8
25,000 - 50,000 .6 1.5 5.4
50,000 - 100,000 .3 2.8 5.9
100,000 - 1,000,000 - 2.0 4.0
1,000,000 and over - - -
Total 1.7 .8 2.8
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Treasury Department, Division of Tax Research
Source: U. S. Treasury Department, Division of Tax Research,
Statistics of Income Supplement Compiled from Federal Income Tax
Returns for 1936, "Individual Incomes," Section III, Tables 1 and 2.
[Part 1 of 2]
Table 7
Individual income tax returns with statutory net income Forms 1040
and 1040A, for 1936: number of returns showing salaries and wages,
and one other source of income of less than (A) $100 and (B) $500
------------------------------------------------------
Source of income reported in
combination with salaries and
wages
Interest Dividends
Size of wages Number Percent Number Percent
and salaries
of of of of
returns total returns total
------------------------------------------------------
A. Less than $100
Under $800 1,135 31.4 679 17.8
800 - 1,000 1,418 23.5 709 29.7
1,000 - 1,500 80,224 86.3 32,282 75.5
1,500 - 2,500 71,316 80.4 29,386 55.4
2,500 - 5,000 87,063 78.8 62,342 51.3
5,000 - 10,000 10,327 64.1 12,125 27.9
10,000 - 25,000 1,370 48.1 1,976 73.5
25,000 - 50,000 75 32.3 116 7.7
50,000 - 100,000 12 38.7 20 11.4
100,000 and over 2 33.3 3 12.5
Total 252,942 79.5 139,638 49.3
B. Less than $500
Under $800 2,157 59.6 1,368 35.8
800 - 1,000 2,867 85.9 1,567 65.5
1,000 - 1,500 91,251 98.2 39,717 92.8
1,500 - 2,500 85,675 96.5 44,213 83.4
2,500 - 5,000 106,749 96.7 99,776 82.0
5,000 - 10,000 14,683 91.1 25,723 59.2
10,000 - 25,000 2,303 80.9 4,845 34.0
25,000 - 50,000 167 72.0 321 21.4
50,000 - 100,000 22 71.0 46 26.1
100,000 and over 5 83.3 4 16.0
Total 305,879 96.1 217,580 76.9
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[Part 2 of 2]
Table 7
Individual income tax returns with statutory net income Forms 1040
and 1040A, for 1936: number of returns showing salaries and wages,
and one other source of income of less than (A) $100 and (B) $500
------------------------------------------------------
Source of income reported in
combination with salaries and
wages
Business profit Rents
Size of wages Number Percent Number Percent
and salaries
of of of of
returns total returns total
------------------------------------------------------
A. Less than $100
Under $800 239 1.4 193 5.2
800 - 1,000 97 2.6 172 8.9
1,000 - 1,500 514 5.1 2,924 21.4
1,500 - 2,500 721 5.3 4,098 15.7
2,500 - 5,000 885 9.7 8,742 18.5
5,000 - 10,000 162 9.0 1,628 21.5
10,000 - 25,000 27 9.1 263 20.3
25,000 - 50,000 2 11.8 14 19.7
50,000 - 100,000 1 100.0 2 22.2
100,000 and over - -
Total 2,648 4.8 18,036 17.8
B. Less than $500
Under $800 1,678 10.2 1,084 29.3
800 - 1,000 682 18.0 1,054 54.7
1,000 - 1,500 2,176 21.5 10,371 75.8
1,500 - 2,500 3,613 26.3 17,726 68.1
2,500 - 5,000 3,735 41.1 36,913 78.2
5,000 - 10,000 583 32.4 5,266 69.6
10,000 - 25,000 82 27.7 766 59.2
25,000 - 50,000 4 23.5 29 40.8
50,000 - 100,000 1 100.0 5 55.6
100,000 and over - - - -
Total 12,554 22.7 73,214 72.1
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Treasury Department, Division of Tax Research Source: U. S. Treasury Department, Division of Tax Research, Statistics of Income Supplement, 1936 "Individual Incomes", Section III, Table 5. |
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