2. *If the sales tax is not passed, a 1%
withholding tax on all wages and sal
aries will become effective January 1,
H Q
3. If the sales tax is approved on O c
tober 7, 1947, the personal^ exemptions
are tô be increased as follows: "Single
person from $750 to $900; head of
family^ or married person,from ?$;l,500
to $1,800; and for each dependent
frdm* $300 to $400.«'-'
It is of interest, also to learn that
regardless of the outcome of the vote
o n . the sales tax measure, the income
tax', rate on net income over $8,000 is
to be 8 p e rc e n t instead of 7 per cent,
and that the present top rate of 7 per
c e n t s ’ to be applied to net incomes
I of ‘$4,000-8,000. Also, the standard re-
I ductiòh is decreased, from '6 per cent
to H per cent,- on
hncomesf',to
ysf^J)0b, and from $3 5y>to
50 on in
comes above,$ 5,000“.
property tax reserve account of excess
sales tax income above $22 million a
year to a total reserve of’ -$¿>000,000,
Also, it seems apparent .that j defeat
of the sales tax measure would deprive
the counties^ cities and school districts
of about $ 1 1 ,O$sb,O$Q a year expected
from. sales/tax revenues.
Estimated Cost of Sales Tax
To Average Family
Based on U. S. Bureau of Labor statis-
tics, it is estimated that a four person
family (average) will be affected an-
ftually by the proposed sales tax, about
as follows:
Adjusted
Gross Income
H I 1,-000
H Q E
¿ S t o W ’'
Av. Expend. Estimated 3%
Sales Tax
- Sub. to Tax
Q H Q
H 401
.830
I 1 ’0 7 3
1Q Q
H Q
Q H &
H H
L307
|H Q
I 3 5
11 5 ,o a ÿ ï
49
Q Q H
63 •
H I
1Q Q H
Effect on State General Funds
O H
• 50,000
I A summary of the total annual stolte
H
Q
HT,-5' o °
h’ÏÔ0,000 '
-revenue under th e .. several t^xf-sèt/ups
68 H
1 2>,700-
- JQ0,000
under discussion/is- eStima/ed to be ^s-
follows.:?-*
It is 1 Interesting to note , that the
’ Present state income/tax
6,000/0,00 'above named reliable /sources believe
I No'¿sales/t-ax;, and new* in-
that a family spends, mofe as the fam
I peònie tax
20,000,000
ily provider- brings home m ore'of the
' I ProposedysâleS tax and
<<Bacot£.”J Thus/^ it appears that the
M g ^ m e ^ ^ x ' I ___ . _ 34,0»0p,000
average family/jin more fortunate', fi
If the salés ,tax .is<passed, of the nancial circumstances will pay more.
above $34 million" about;
million/ ^sileSzXax/than those, l^ss amply pro
revenue is expected from the s^es;.fax vided with purchasing power; i
H Q about $12 »million. from the re
Effect of the Alternate Plans:
duced income tS k ./In 'this, fe|se, the,,
Two * alternatives,, are b o p o r e the
general fund of the State would‘.receive
about U‘$7 T /3 mi$h@M‘ or .One-third, people on October 7. Stated briefly
1 Vf rom the sales tax, and about $12 mil they a re '(,l) to pass a rg ^ g js ^ g ^ tax,
lion from the income tax; making a of 3 per cent an<f reduce the state in
total of about $19 1/3 million. This come tax, and (2) defeat the sales tax,
appears about two-thirds of a ’millioh increase‘ the State income tax, , and pro
dollars’ short of expected' state, revenue vide a 1 per I cent//withholding - tax to
, if the sales tax is. defeated and the ré be credited, against income tax pay
sultant automatically? jufçréased state ments.
To illustrate these' tw o- alternatives,
income tax then were I in effect.. 11
The above apparent shortage does let us/fissume* a, hypothetical case of a
not, however, take into âcébunt thè four-person familyVgross income $3,000
/./$'3\2^3 million from Sales' tax credited a year, federal income tax $140, and
r . to the state “ public welfare. I account, new community property law in- effect,
(Continued on page 10) "
nor the additional credit to the state’s