The Key West Citizen Newspaper, August 11, 1954, Page 8

Page 8 THE KEY WEST ¢iTizEN Wednesdey, Avguet 11, 1954 Taxpayers Will Get Break In. New Rule On Insurance Tax |At San Carlos By CHARLES F. BARRETT WASHINGTON (@—More than a million taxpayers will get a tax cut under new rules for taxing income froni annuities or life in- surance included in the giant tax revision act just passed by Con- 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 for the rest of your life, or 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 | try year on 3 per cent of that cost. ‘The remaining annuity income was free. , ose 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 $827, would be considered taxable in- come each year. The other $873, a year would not be counted as in- for tax purposes. This would continue until the $073 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. 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. 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 rolicy, 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 wo 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- ty 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. Experts estimate this would ap- ply in 9% per cent of the cases | where employers contribute te 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- to reduce taxes about 25 million dollars for about 10,000 tax- payers each year. a 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 law, this interest will be taxable for anvone but a widow. And a widow will vav taxes on anv such in- terest which exceeds $1,000. year Emperor Haile Selassie o° Fth- opia was one of the spectators at . recent game between the Yankees and the Senators at Yankee Stad- um. ———ne Stan Musial returned to first base r the first time since 1952 be- been of rookie Tom Alston’s bat- ing slump. Farm Project Ready To Go In W. Germany By CLARK FLICK-STEGER BONN, Germany, —A’ vast Project to boost food i in West Germany is ready to go into operation. Known as the Luebke plan, it calls for thorough and speedy me- chanization of ‘farms,. construction of more modern farm - houses, barns and silos, and intensified use of waste land throughout the coun- _ The plan also aims at consolidat- ing the scattered plots owned by many farmers into unbroken fields better adapted to machinery. And it calls for better educated farm- ers with more up-to-date agricul- tural knowledge. To, pay for all this, West Ger- many’s new minister of Food, Agri- culture and Forestry, Dr. Heinrich Luebke, advocates easing the tax burden for farmers and giving more and cheaper long-term farm loans. From 1945 to 1948, West Ger- many imported roughly 70 per cent of all its food. Since then, agri- cultural production has soared and today is 16 per eent above the pre- war level. Nevertheless, densely populated, highly industrialized West Ger- many still consumes 35 per cent more food than her farms produce. Closing of this gap is the ultimate aim of the Luebke plan. Increasing farm production in Germany is a problem that at first sight appears almost unsolvable. Virtually every square yard of fer- tile soil already is being tilled, and the problem is mainly one of in- tensifying production by boosting the yield per acre—a long and costly process. One of West Germany’s foremost agricultural experts, Dr. Andreas Hermes, who heads the powerful German Farmers Union, endorses the Luebke plan wholeheartedly, It will require a lot of money, pa- tience and utmost caution, he says. His experts estimate that 10 years will be necessary and that the cost dollars, The cost factor will. in it- self, compel the government to go slow in view of the scarcity of capital in West Germany today. Some quarters advocate elimin- ating small farms entirely and al- lowing them to be absorbed by the big ones which operate more effi- ciently. Neither Luebke nor Hermes will consider such a radical solution. Both believe the small farm, as a family enterprise, is justified. They say the small farmer should con- centrate on specialized products, however, and stop trying to com- pete with the big fellows. The farmers themselves are not | enthusiastic over the Luebke plan. Traditionally. conservative, _most would prefer to keep things: the way -they are—unless “they. are shown they ean profit from a change. Landmark To Be Razed NEWPORT, R. I. #—A 216-year old colonial house was’ scheduled for destruction today. No ‘one would buy it for $1. ' The People’s Credit Union, : own- er of the house, had offered the old home for sale for $1: provided it was moved off land needed by the firm. Moving costs were re- ported to be prohibitive. Probably will exceed six billion} ‘narcotics, the agents said. VISITING ADMIRAL INSPECTS.— Vice Admiral Edmund T. | Wooldridge, Commander Second Fleet, inspects members of “T” Division at Fleet Sonar School graduation exercises last Satur- day. Walking to the side and back of Vice Admiral Wooldridge is Rear Admiral Wallace M. Beakley, Commander Hunter Killer Force, U. S. Atlantic Fleet. In an address to the graduates Ad- miral Wooldridge said that-im the many years he had inspected he had never seen a group make a better appearance than did Fleet Sonar School at this ‘inspection. “I compliment you,” Ad- | miral Wooldridge. stated—Official U. $..Navy Photo, Vivid Korean ar Film Due Starting Sunday the San Carlos Theater has scheduled the show- ing of vivid Korean war picture, The Glory Brigade, starring Vic- tor Mature, with an able support- ing cast headed by Alexander Scourby. It is the story of a Greek-Ameri- can lieutenant, Mature, who is as- signed to duty with the American forces in the UN action in Korea. He is given the detail of leading his platoon across a river to act as cover for a Greek group of men headed by Scourby who have been assigned to get information on an enemy offensive. When. the Greeks go on ahead, Mature and his men wait and learn from their scouts that some of the Greeks have surrendered. Mean- while some of Matur’s men are ambushed and killed. The plot evolves when the Greeks return and Mature looks for signs that they have defended their men. Failing to see the signs he seeks, Mature thinks they lack courage. After much misunderstanding and trouble, the two groups finally come to understand each other. This picture covers another phase of the Korean action, that of men of different countries fight- ing side by side for the same vic- tory. Action lovers should be pleas- ed by the well-plotted movie, Farmer Turns To Selling Dope After Drought KANSAS CITY #—U. $. narcot- ies agents said a one-armed Kan- sas farmer told them he tried to sell opium because the drought ruined his 160-acre pasture. Officers who arrested Lawrence H. Bowman, 41, said they found a pound of opium worth $60,000 in his possession. Bowman, of Bur- lington, Kan., was being held in jail today in default of $2,500 bond. The agents said Bowman's al- leged accomplice, Elwyn Earl Slane, 34, 2 printer, was arrested in Burlington with 30 grains of opium in his possession. The two men will have a hearing in federal court Friday, The agents quoted Bowman as telling this story: In 1946 he smuggled opium into the United States from Japan, where he was stationed as a Mar- ine. He kept the drug at home. He lost his right arm below the elbow in a threshing machine ac- cident three years ago. This summer his 80 head of He- reford cattle ran out of pasture and he had no money to buy feed, so he decided to sell the opium. Guided by information from Slane, the farmer came to Kansas | City and tried to sell two ounces | of opium to a man, who turned out | to be a federal undercover agent. | Neither Slane nor Bowman is an addict or has a record of selling | WOMAN DRIVER SURPRISES COPS CHARLOTTE, N.C. #—A wom- | an driver was charged with reck- | Jess driving here after her car} crashed into the police headquar- | ters building. | Police said Mrs. Ruth B. Smith | of Hickory told them her foot | slipped from the brake to the ac-| celerator as she turned a corner, Mrs. Smith was not hurt. Al Rosen of the Cleveland . In- dians was nicknamed “Flip” when he pitched on a softball team while in high school. In-his professional boxing career Rocky Marciano has never lost a fight or been held to a draw. Members At Anglicans List 40 Million MINNEAPOLIS # — Anglic: have a membership of over 40 mil- lion parishioners, some five per cent of the global church popula- tion, the Archibishop of Canterbury told the World Anglican Congress here today. The Rt. Hon. Geoffrey Fisher, in a statement, estimated total world church membership at about 800 million and said that reference books setting the Anglican total at about 30 million are incorrect. His report came as the 600 church and lay delegates continued discussions on “Our Message,” one of four general topics under review and to be reported on at Friday’s closing sessions. Archbishop Fisher said that Roman Catholics estimate their ad- herents over the world at 423 mil- lion, with the Orthodox Church population set at 160 million. Of other churches, he said Lutherans claim 68,500,000, Presbyterians and Reformed 41,100,000, Baptists 40 Special Car Provided For War Cripple LOS ANGELES (#—An ex-Mar-|ine who can’t sit down now has an 5 |auto he can operate standing up. million, Methodists 30 million and| . The car was delivered yesterday Congregationalists 5 million. to Kenneth Porter, 35, a Phoenix, “The Anglican total is given in| Ariz., tax consultant. As a result some reference books as 30 mil-|of a war wound he is rigid from llions,” the archbishop went on. | neck to knees, and does his work “But this is a serious understate-'at an elbow-height desk. He eats ment as a probable figure would Standing up, and gets into bed with \be over 40 million. the aid of a hoist. “On the basis of these figures,, Porter bought a parcel delivery lit can be said as rough guide that, Chassis some months ago, and or- of the whole Christian population, | 1¢Ted an air-conditioned body with |gome 52 per cent are Roman SPecial rear-view mirrors, a driv- Catholics, 23 per cent belong to in& Platfrom and a built-in bed. the various Protestant bodies, 20 The vehicle has automatic shift, per cent are Orthodox, and 5 per | Power steering and power brakes. cent Anglican. aos are pane erate i . 7 } ie iy EF |qine, archbishop said the figures! piiders of the body, made Porter | because calculations were based on nin er pagina ea the peommper, of children peas oF radio for the car was presented by ie a reat Roraicet the AFL United Auto Workers. geographical boundaries. \READ THE. CITIZEN DAILY NEW PC SKIPPER — Lt. (jg) Donald J. Maynard, left, new commanding officer of the PC 580, shakes hands with outgoing skipper Lt. Charles F, Willard, right, after change of command ceremonies aboard the PC yesterday. Captain of the PC 580 for the past 22 months, Lt. Willard’s next duty station will be the Naval Communications Station, San Juan, Puerto Rico. Lt. (jg) Maynard served as Executive Officer aboard the USS Robert F. Keller (DE-419) preceding his assignment here.—Official U.S. Navy Photo. ‘ Let US bring you the finest... ~“ FSU New PER- e Du Mont WITH BUILT-IN BRILLIANCE CONTROL F i WITH CHASSIS 4 The ov RST MATCHED PERFORMANCE Now own a Du Mont Teleset’ s only one Monr for as little as $17 95' j iadizs The 17-inch Du Mont BARTON Contemporary styling. Walnut, mahogany on blond groin finish. $1.7995 Television's Biggest S Value! f00O BRPRA ERARGE for fell-yeor pistore tobe Worronty, 90-doy ports Womonty, Federal Excise Tax, built-in antenna. Priees stightty Ngher for limed oak, blond, ond some mahogony models. 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