The Daily

Author Archive

The Actual Return Upon Taxable and Tax-Exempt Securities

March 7, 2014 | by

It’s late, and you’re still awake. Allow us to help with Sleep Aid, a series devoted to curing insomnia with the dullest, most soporific prose available in the public domain. Tonight’s prescription: “The Actual Return Upon Taxable and Tax-Exempt Securities,” first published in the War Taxation: Some Comments and Letters, in 1917.

1838_Schumann_Die_eingeschlafene_Strickerin_anagoria

Wilhelm Schumann, The Sleeping Embroiderer, 1838.

Dear Sir:

Your letter indicates that you do not sufficiently realize the enormous advantage in interest yield which under the income tax schedule as fixed in the House Bill is possessed by tax-exempt securities as compared to taxable securities, especially, of course, in respect of large incomes.

Permit me to call your attention to the following eloquent facts:

The yield of tax-exempt securities at prevailing prices ranges from 3-1/2% to nearly 4-1/2%. Under the rates fixed in the War Revenue Bill as it passed the House of Representatives, a taxable 6% investment would yield:

 

 

per annum

2.28%

 on incomes over

 $2,000,000

2.34%

“““

1,500,000

2.40%

“““

1,000,000

2.69%

“““

500,000

2.97%

“““

300,000

3.26%

“““

250,000

3.54%

“““

200,000

3.90%

“““

150,000

4.20%

“““

100,000

Read More »

NO COMMENTS