FRIDAY, AUGUST 13. IfliU
HERALD AND NEWS. KLAMATH FALLS. OREGON
PAGE THIRTEEN
Taxes On Annuities, Life
Insurance Cut By New Law
. - ' onnnLil
WASHINGTON U-i More than a
million taxpayers will get a tax
cut under new rules for taxing
income from annuities or life in.
surance included in the giant tax
revision act Just passed by Con
gress. The new rules apply to income
received after last Dec. 31.
In annuities, you generally pay
so much a year to an Insurance
company. Then at a fixed age or
year, you get back so much a
year for the rest of your life, or
Solon Lauds
Ike Defense
Program
WASHINGTON" Wi Sen. Fergu
son (R-Mich said today President
Eisenhower has taken an intense,
personal interest in seeing that the
nation's defense program is the
best that can be devised arid "our
people need have no fear."
Ferguson, chairman of the Sen
ate Republican Policy Committee,
said in a speech prepared for the
Senate that the Eisenhower ad
ministration has replaced a
Democratic policy of "commit
ments everywhere and strength
nowhere" with "a comprehensive
military program at a price the
national economy can afford.",
The Michigan senator said .this
program was aimed toward keep
ing world peace, and built around
a flexible, mobile military force
which is capable of being sup
ported by men, weapons and sup
plies in many far-flung areas
throughout the world."
Ferguson's 0,000-word explana
tion of the administration's mili
tary aims presumably was intend
ed as a reply to criticism by
many Democrats that the "mas
sive retaliation" policy enunciated
by Secretary of State Dulles
leaves much to be desired In total
defense.
Ferguson said that "massive re
taliation" the ability to strike
back quickly with atomic and hy
drogen bombs against any aggres
sorwas only one element of a
rounded program.
He said "brush fire" wars set
by the Communists would be dealt
with by using "conventional as
well as atomic weapons."
"In putting out brush fires, we
hope to rely as much as possible
on indigenous military strength,"
he said. "To that end we offer
military training, military defense
support, economic support and
logistic support."
As for "massive retaliation,"
Ferguson said that "although we
cannot guarantee that this deter
rent principle will be foolproof in
the future, certainly it has worked
to prevent a major war thus far."
Ferguson said he hopes Sir "Win
ston Churchill was right in saying
that both sides may avoid a war
which begins with what both dread
most atomic bombing.
The Michigan senator said mili
tary officials decided that "we
could get maximum defense at
minimum cost over a long period
of time by emphasizing the role of
sir power." But he said this did
not mean the army and navy
would be neglected.
Mt. Loki
Enjoying the evening were Mr.
and Mrs. Gray Brannon, Mr. and
Mrs. Wallace Thompson, Mr, and
Mrs. Howard Jackson, Mr. and
Mrs. Bud White, Mr. and Mrs. El
don Kaylor, and the guests of
honor.
Exhibits will be received until
10:30 a.m. The public is invited
from 1:30 to 5 p.m. There will be
a silver tea from 2:30 to S.
Anyone may enter their exhibits
and see the displays.
Mrs. Charley DeLap Jr., Pamela
and Lois accompanied Mrs. De
Lap's parents, Mr. and Mrs.' E. P.
Blankenship, to Wenatchee, Wash
ington, recently where they visited
friends and relatives for 10 days.
Roger and Charley Thompson
flew to Portland to visit their aunt
and uncle the Ed Ryans recently.
Mrs. Ryan and children, Ann and
Scott, came to visit Mrs. Ryan's
parents Mr. and Mrs. Scott Thomp
son. Mr. and Mrs. Percy Dixon drove
to Portland recently, parked their
car at the airport and took the
plane to Fairbanks, Alaska, where
they spent five wonderful days with
Donna who had been in Fairbanks
a month as a scout councilor. They
all flew back to Portland and on
home by car. Percy said the peo
ple in Alaska were so congenial
and generous, they really go out of
their way to be nice to you.
Mrs. Jay Fairclo traveled to
Southern Kansas recently where
she visited her brother and sister,
Ruth Patton. The three of them
took a trip to see the Black Hills
and also saw the statues of the
four presidents carved out of the
rock at Rushmore, South Dakota.
They went to Abilene whera they
grew up. Ruth went to high school
at Abilene with Ike Eisenhower.
She returned here with Grace to
visit the family. They came home
by Idaho and Mrs. Bill Brlsdon
and two young sons drove them
here, where Mrs. Brisdon visited
a few days with her parents, the
Fairclos', and other relatives.
tn,oy heaim, mt, comfort and hosorfolrtv
omidit pleaiont surroundings. Cemotetely
Furnished Sloping ond Housekeeping
Cabins, with oil modem loc'Mtes.
HOT MINERAL end MUD BATHI
For Rheumetism, Arthritis, Neuritis,
Sttetfce, Nervousness
CARBON DIOXIDE VAPOR IATHI
Are eseellefit see Itieree, New, ee lrsrB
tions, Hieti end Lev Bleed rmsers
"Your Heotm Is Our Business '
e.r Reiervetlent eed taferswetien Ae'tfreM
Seckherrt Minerol Serins, Rf. 1. Asfcleee",
Oregon er Phone Len, Ditteee.
Or, H'rrMn wen.r. Director
Chiropractic pnyticion
for a fixed number of years.
The big question, taxwise, is how
much of the money paid to you is'
simply a return of the money you
paid in and how much is interest
or profit and therefore "taxable.
Under the old law, you first
figured the total amount you paid
in the total cost of the policy to
you. Then you were taxed each
year on 3 per cent of that cost.
The remaining annuity income was
tax-free.
For example, say a policy cost
you $10,900 and at age 65 you were
to get back $1,200 each year for
the rest of your life. Under the old
law, 3 per cent of 10,900, or 327.
would be considered taxable in
come each year. The other $873 a
year would not be counted as in
come for tax purposes.
This would continue until the
$873 of tax-free income a year
added up to the cost of the policy,
or $10,900. From then on in this
example from the 14th year on
you would be taxed on the full
$1,200 a year.
This sudden increase in taxes
was considered a hardship in many
cases, 1
Under the new law, you first
figure your total cost just as be
fore. .Then you figure your re
maining years of life expectancy,
or the fixed number of years, over
which you are to receive repay
ments. Then you divide your cost
by this number of years. That is
the amount of income you can re
ceive tax-free, and the rest is tax
able. EXPECTANCY
In the example above, say you
had a life expectancy of 10 years,
or a fixed 10 years in which the
policy says you are to receive
$1,200 a year. Your total cost of
$10,900, divided by 10, amounts to
$1,090 and that amount of annual
income is considered tax free. You
would pay taxes on the remain
ing $110 each year.
These amounts would remain the
same throughout even after you
had recovered the full cost of your
policy, and even if you actually
lived longer than your life expec
tancy. Thus, under the old law, you
would pay taxes on $327 a year for
a while and then you would pay
taxes on $1,200 a year. Under the
new law you would pay taxes on
only $110 a year throughout.
The new rules are different in
cases where an employer contrib
utes much of the cost of an annu
ity or pension policy to an em
ploye. If the employe receives back
all of his cost within the first three
years of payments to him, he
doesn't pay any tax during those)
first three years. Then after three
years, he pays income taxes on
the full amount he receives.
ESTIMATE
Experts estimate this would ap
ply In 5 per. cent of the cases
where employers contribute to pen
sion or annuity contracts. So the
new life expectancy rules will
chiefly benefit those who buy com
mercial annuity policies on their
own.
There's one helpful provision in
the new act. You don't have to go
through complex arithmetic to fig.
ure how much of your- annuity is
taxable. The insurance company,
when it starts payments to you,
will compute your life expectancy
and tell you how much of your
annuity income will be taxable.
Another provision gives a big
cut in testate taxes. Under the old
law, if you paid premiums on a
life insurance policy, proceeds of
the policy were considered part of
your estate when you died. Your
survivors paid an estate tax on
them. But from now on if you
make the policy irrevocably pay
able to your beneficiary, it is not
included as part of your taxable
estate. This provision alone is ex
pected to reduce taxes about 25
million dollars for about 10,0()0 tax
payers each year.
But another change will Increase
taxes for some. Under the old law,
the beneficiary of a life insurance
policy could leave the principal
with the insurance company and
receive tax-free interest in annual
installments. Under the. new Jaw,
this interest will be taxable for
anyone but a widow. And a widow
will pay taxes on any such in
terest which exceeds $1,000 a year.
State Bounty
Payments Told
SALEM !P Thirty-two counties
will collect $30,000 from the -state
for payment of bounties on preda
tory animals for the year ended
June 30, the State Department of
Agriculture said Thursday.
The bounties are for killing 9.931
animals, including 3.537 coyotes,
1,709 bobcats, 330 foxes, 117 bears,
and 20 mountain lions.
Douglas County gets the biggest
share, $3,330.
Amounts nairl tn nthnr rniinlioo
Include:
Baker $800. Behton $800. Clacka
mas $800, Gilliam $800, Grant $570,
Hamev Sl.OrXI .Iflrkcnn toon .1neB-
phine 660, Klamath $1,540,' Lake
ji.jju. Lane 11.460, Lincoln $320
Linn $800. MalhPlir 11 1l)n Vlnrrnuf
$850, Sherman $850, Umatilla 1.-
uw, union $800, Wallowa $800
Wheeler $530.
DISEASE
NEW DELHI, India im A
mystery disease spreading over
northern India has caused the
deaths of about 100 children, med
ical sources said Thursday,
EAGLES PICNIC
Will Be Held At
DENTON PARK
(Gravel Pit) Fort Klamath
SUNDAY, AUGUST 15
Brinq Your Own Picnic Lunch and Silverware
Watermelon, Coffee, Sugar, Cream, Pop, Ice Cream
Will Be Furnished
r-er m
ft, y
Wi fi
J. ' ' - t. - K L : J .
EIGHT is your lucky number at Griggs Superior Foods this
weekend as T. C. Griggs, left, and Carl Woods observe the
eighth anniversary of the establishment of the big market at
South Sixth and Shasta Way. .
Pro-British Iraqi Leader
Plans Anti-Red Offensive
BEIRUT, Lebanon, Wl ' The
return to power of a veteran Iraqi
warrior who once hanged Com
munists in the streets may herald
a Siew British agreement in the
Middle East a revision of the
British-Iraqi treaty.
Iraq's new premier, 66-year-old
Nurl Said, recently returned to
Baghdad after a lengthy stay in
London. He formed a tough-fisted
cabinet, dissolved parliament, and
announced two major objectives
crushing of subversive activity and
revision of the treaty with Britain.
Following closely British settle
ment of knotty problems in Egypt
and Iran, agreement with Iraq
may be another major step in
London's drive to, set her Mid East
house in order. . ,
If a fresh British-Iraqi agree
ment is in the offing, Nuri Said is
considered the man to push it
through. He has long been a friend
of Britain and has kept his country
in the Western camp. The unques
tioned strong man of Iraq, his cur
rent cabinet is the 12th he has
headed since 1930. He usually takes
power in times of crisis.
Nurl never has been the popular
type of leader. Nationalists have
bitterly criticized his pro-British
leanings. Intellectuals consid
er him reactionary and undemo
cratic. Three times he has- been
chased out of the country. But
always he has come back with
rare exceptions he has been boss
of Iraq since 1930.
Part of Nuri's preparation for
a settlement with Britain will be
a drive against internal commu
nism. Leftists and fellow travelers
gained their first parliamentary
foothold in Iraq in the June 9 elec
tions this year. While Nuri was ill
in a London hospital, seven left
wingers of the National Front
coalition were elected to parlia
ment on a platform assailing
American military aid and adher
ence to the Turkish-Pakistani pact.
If Nuri reaches a new agreement
with Britain, this small bloc could
use the floor at parliament to
launch a popular campaign against
it. This is one ot the chief reasons
Nuri dissolved the chamber on his
return, even though it had had
only one meeting.
New elections probably will be
held in September. Between now
and then, Nuri is expected to use
every form of pressure at his com
mand to crush leftist activity and
to guarantee a parliament which
will back any new agreement
strongly.
If this is Nuri's objective, it
means bad news for leftists. Iraq's
Communists still shudder at. the
it leaves you
breathless
mirnpjf
'., name
VODKA
60 proof Midf from ! 005 (rain neutral lpintb
St. Pierrt SmrrnofT Fli. Inc., Hanford.Conn.
111 l3"!
I So smooth l25UtI
iv .
1
HUM
memory of 1949, when Nuri hanged
five reds In the streets of Baghdad
and left their bodies swinging for
half a day.
Keep Oregon Green banquet ploct cords, cigar
ette snuffers, key chains, metal car bumper tags
and display posters. Just telephone any of these
members of the Klamath County Keep Oregon
Green Committee: Hal Ogle, Klamath Forest-Protective
Association, 3282; Bob Cooper, U.S. Dis
trict Forest Ronger, 3801; or Joe LaCloir, 7292.
Use them -help keep Oregon green!
JCIIEVENT FiUlESX FIHES-
Ike May Take
WASHINGTON Wl President,
Elsenhower appears to be inching
into a leading role 1)1 the battle
for control of Congress despite his
avowed plans to remain aloof from
local political skirmishes.
Administration leaders said to
day Eisenhower hopes to go on
television and radio with a 30-min-ute
talk on the administration's
legislative record within 24 hours
after Congress ends its regular
work, probably next week.
Eisenhower told his news con
ference yesterday he was plannuig
what he called a little bit of a
talk to review Congress' record
since he took office in January
1953. He added he didn't want to
cheat on himself by saying any
more at this tune. ,
But administration officials who
asked anonimity said preparations
for the appearance have been under
way for a long. time.
NATIONAL REPORT
Although the President's talk
will be billed as a report to the
nation. Democrats indicated they
may demand equal time to count
er what some of them said they
regard as a Republican kickoff for
the congressional campaign.
Despite Eisenhower's repeated
statements that he would avoid
getting involved in local' political
NOW
f " : burned today-
jjooa cahsthuiA ....
Leading Role
fights, his schedule already In
cludes appearances in Illinois,
New Jersey and Kentucky. Pres
sure is reported beginning to build
up heavily from' other areas. The
President has also taken time to
pose for pictures with more than
100 GOP House members.
GOP National Committee offi
cials have turned to Vice Presi
dent Nixon to carry the heavy bur
den of a political stumping tour.
N.ixon starts his active campaign
ing with a speech at the Ohio
State Fair Sept. 15 and is expected
to make several excursions to dif
ferent parts of the country before
the November voting.
GOP KECOKD
Mnny Republicans say, however,
that there eis no voice equal to
Eisenhower's in defending the re
cord of the OOP-coutrolled Con
gress. Eisenhower has insisted that
the Republicans must stand or fall
on the record made, on the admin
istration's program.
As expected, there Is a sharp
division of political opinion on that.
Sen. Carlson (R-Kan) said he
thinks the Eisenhower administra
tion "can be proud of the record
it has made in reducing taxes and
expenditures and in handling for
eign affairs," and he added: "I'm
going out in the campaign and
IN KLAMATH FALLS!
"The World Famous"
lOc HAMBURGER
' A Delicious Mealtime Treat
NEAL'S Fountain
1229 Main St.
r orcst fires are a tragedy. When the woods burn,
little trees die. These are the trees upon which we de
pend for our future supplies of paper, lumber and
other products so necessary to comfort, welfare and
security. Because nearly all forest fires are man
caused and preventable, this waste can be stopped.
Do your part . . . Keep Oregon Green.
This message is mada possible by tha Advertising Council and tht Klamath County Keep Oregon Green Committee,
end is brought to you as a public servict by
Weyerhaeuser Timber Company
In GOP Fight
talk about it."
Sen. Symington (D-Mo) said he
doesn't believe the farmers are
satisfied with the administration's
program in that field and will show
it with their votes.
However, Sen. Aiken (R-Vt), who
piloted the President's flexible
price support program through the
Senate, said he believes farm prices
are going to strengthen.
FARM VOTE
"If the farmers believe they are
In good shape in November, they'll
vote Republican," he declared.
Sen. Monroney (D-Okla)- said it
is his opinion that Eisenhower will
have difticulty in finding anything
"to brag about" in the Republican
record of the Congress coming to
a close.
"As of now, the administration's
batting average is extremely low,"
he declared. "Eisenhower's big vic
tory and he is welcome to claim
it Is in reducing farm prices on
the five basic crops which have
BALSIGER
Main at Esplanade
For Congress
cost the least In government nun.
ports in the last 20 years."
ORDER
BUENOS AIRES OB Presl.
dent Peron's government, which
has been distributing newsprint
for more than two years an
nounced Thursday it will let pa
pers buy their future stocks direct
from the manufacturers.
AND SIDING
$$$ SAVE $$$
Dtal with fti man wh does the work
W. S. "BILL HEIMANN
Phone ISM lis Hilchen
Gel away for fun and re
laxation thruout the yearl
The 15' is the most pop
ular travel trailer and
more people buy the
Shasta than any
oiner make. j
FeaffceiweigtoJ
HSOpoundj.l
Sleeps 5. Hoi
every mod.
em feature.'
MOTOR CO.
Ph. 3121
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W.
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