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About Herald and news. (Klamath Falls, Or.) 1942-current | View Entire Issue (Aug. 9, 1954)
MONDAY, AUGUST 9, 1954 HERALD AND NEWS, KLAMATH FALLS. OREGON Tax Cut To Aid Citizens As Well As Big Companies This Is the sixth of a series of articles explaining how the new Ux revision act affects individuals. By CHARLES F. BARRETT WASHINGTON Wl A tax cut nailed chiefly as a boon to cor porations actually will benefit more individual taxpayers than any other one part of the new tax revision law. Experts estimate almost 10 mil lion persons will pay reduced in come taxes next spring because of much faster deductions for wear and tear on new equipment or buildings. A farmer can benefit If he gets a new tractor or bain; a grocer or other shopowner can benefit If he buys a new display counter: a lawyer can benefit on books for his law library; a doctor gets a j tax cut on new medical equip ment; a landlord benefits on per manent improvements to his pro perty; even a writer can benefit if he buys a new typewriter. Altogether, individual taxpayers are expected to get tax reductions from this provision amounting to 13 million dollars the first year, much more later. The same pro vision will cut taxes on an esti mated 600. 00 rnrnnrnltnn hu - about 291 million dollars the first year. You can claim depreciation de ductions on buildings or equipment which are used in producing in come and which have a useful liie of three years or more. You can't deduct, for example, on a home or car not used in business. If the useful life Is less than three years,, you deduct the cost of the iiem as a regular business expense but not as depreciation. Depreciation deductions are spread over the years of useful life of an item. They add up even tually to the total cost of the item. They are deducted from your in come, before you apply the tax rate. ' The new law permits much big ger deductions on new equipment or buildings in the first years of useful life. That means smaller de ductions toward the end of the period of useful life. For millions of taxpayers, it means substan tially lower taxes over the next few years. . And you can wind up with a big over-all tax cut if you sell the Item before its useful life is over after taking the big deductions in the early years. The more liberal treatment ap plies to new equipment bought aft er last Dec. 31, or to construc tion started after De;. 31. If con struction was started before then, but completed later, the more lib eral allowances apply only to that part of the construction cost after Dec. 31. The new deductions may be claimed in 19M tax returns due next April 15. Note: You can't claim the new deductions if you buy used equip ment. The old rules still apply in that case. Under the old law, generally you ngured the useful life of the new item and deducted the cost in equal annual installments over that period. Thus a $10,000 item with 10 years of life would mean a $1,000 deduction each year for 10 years. This is called the "straight-line" method. under -the new rules, you are given several possible new methods of figuring deductions. The most important are called the "declining balance" method and the sum of the years digits" method. They sound -frightfully complicated, but they aren't so dif ficult when you sit down to work them ,out. ' Under the declining balance. first you figure the percentage de- auction allowed each year under the old law. In the example above, that would be 10 per cent.' The you double the percentage. In this example, you get 20 per cent. Now. for the first year, you de duct mat percentage from the to tal cost. Thus the first year you get a deduction of $2,000 instead of $1,000. And each succeeding year, you apply that same 20 per cent to the remaining Ddl5nce of the cost not to the entire cost, you have already deducted $2,000, so In the second year you would deduct 20 per cent of $8,000. of $1,600. The third year you would deduct 20 per cent of $8,400, or $1,280. In the first three years under the declining balance methud, you would deduct $4,880 instead of the $3,000 under the old law. At a 25 per cent tax rate, that would be an actual tax cut of $470 the first three years. Under the "sum of the year's digits" plan, the rate of deduc tions is a fraction. The denomin ator of the fraction is constant the sum at all the numbers in the useful life. In the example above, that would be 1 plus 2 plus 3 and so forth up to 10. That gives you a denominator of 55. . The numberator of the fraction starts with the number of useful years, or 10. It declines by one number each year, Each year you appiy tnis traction to your total PAGE THREE n Ed 8 KF Legion Drum And Bugle Corps Repeats '30s Fame The martial music of Klamath Falls' stale championship Ameri can Legion Drum and Bugle Corps sounds a familar note in the ears of oldsters who watched that or ganization put Klamath Falls on the map in the 1930 s and are wit nessing a repetition of that fame in the 1950's. The corps was first organiied in 1933 whe the state convention was held in Klamath Falls. Being host town the local group couldn't com pete for the trophy, but members put tneir best teet forward and the following year they had crossed THE LOCAL STATE CHAMPION American Legion Drum and Bugle Corps successfully defended its title at the Coos Bay convention a few weeks ago, adding another page to the bright record the corps held in the I930's. Presenting the large loving cup to Drum Major Dick Gallagher (right) is Governor Paul Patterson. 1 cost, to figure the deduction. Thus the first year your deduc tion ' in this example would be 10-55tns of $10,000, or-$1,818. The second year it would be 9-55ths of $10,000, of $1,636. me third year it would be. 8-55th, or $1,454; and so forth until the tenth year your deduction would be 1 -55th, or only $182. ... In this case, your deductions the first three years would total $4,908. This compares with $3,000 under the old straight-line method an additional deduction of $1,908. If you're in a 25 per cent tax bracket. that would be an actual tax cut of $477 the first three years. Still other methods are allowed, but none of the others may exceed the declining balance rate at any one point during the first two thirds of useful life. You can use the declining balance method for part of the period, and then shift at any time to the straight-line method of deducting your remain ing balance of cost. the threshhold to championship. Under the able direction of Bob Elder, the first drum major, the Klamath Falls corps successfully defended its title In 1935. In 1936 Klamath Falls relin quished the crown to Portland but made a quick comeback in 1937 which, incidentally, lasted through 1939. i That year, the corps refused the large revolving loving cup to spike rumors that rival groups planned to disband since the revolving cup had ceased to revolve and seem ingly held a permanent place here. So, at the 1939 convention In Sa lem, Klamath Falls returned the cup to competitive circulation. Competition took a new turn in the years to follow, when war be tween nations cancelled contests between corps, and the local corps, like most, disbanded. But the war ended, and in 1952, Klamath Falls again held the po sition of host city to the state American Legion convention. Dick Gallagher, formerly drum major with the Sons of the American Legion Drum and Bugle Corps also champions (but- therein lies another tale!) was asked to or- BERSERK TOKYO Wl A 36-year-old man went berserk yesterday, and stran gled his wife, hacked his four chil dren to death with a knife, set fire to his house and perished in the blaze, police reported today. ganiie another host corps. Again, the novice group was- ineligible for competition, but, again, mem bers had their feet in the door and the following year walked through that door marked "champs." Tills was at the Seaside convention af ter only one year's organiiatlon. Recently, the corps successfully defended that state championship title. Now they antlclDate takine -their talent even farther, than state boundaries: they hope to represent Klamath Falls in Washington, D.C. at thi national convention and compete for national honors. A fund established very recent ly by the State American Legion to send the championships corps to national is too new to be of much help to these 30 musicians; but lack of appropriation support hasn't sounded a death note to their trip yet. The corps plans to raise funds themselves to support the Journey. , . Members of the corps Include Dick Gallagher, drum major, who also holds the state championship drum major title;. Sharon Schwartamiller, stale champion drum majorette; Bob Fredrlckson, state champion buglar and local director: Jerry Withers, state champion snare drummer. Joe Cogdill, Clint- Lorber, Ted Otterbetn, Stan Etell.'Jack Otter bein. Jim Herbert. F. S. (Red) Schilling, Rex Dye, Tom Young, George Baumgardner, George De metrakos, Mike Elttrelm. Louie Bath, Bruce Hall, Clarence Adreon, Dick Adreon, Leon Adreon, Don Horn, Herman (Bud) Stelnslefer, Warren Fett, Fred Floetke, Arthur Schwartzmlller. There's a postscript to the corps' story: Four of the members were Indoctrinated for championship as members of the Sons of the Amer ican Legion Drum and Bugle Corps. They were George Demetra- kos, bass drum: Jack otterbeln. snare drum; Steve Green, color guard and Dick Gallagher, drum major, and the oldest member. Young, was a member of the first organised championship corps. History so far has repeated It self to the credit of Klamath Falls. That the record will con tinue Is not doubted by the many who have been entertained by the Klamath Falls corps in their many invitational publio appearances. Get your Locker or Deepfreeze WHOLESALE Broken quarters, quarters or halves select feed lot beef. BEEF 3i 29l SQUARE CHUCKS I nlKlN Trimmed, T-Bonet AO l,V,llJ Sirloin Steoks lb. 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