Another exception to the general requirement of a complete declaration of income covers the case of the taxpayer whose entire income has been assessed and the tax on it deducted at the source.  The law relieves such persons from the obligation of making any declaration of income; although it is not certain that this privilege can be secured without foregoing or sacrificing the benefits of any abatements to which the individual taxpayer might be entitled on account of business expenses, interest payments, losses, etc.  It seems probable that where the income is all assessed at the source the taxpayer may obtain the benefit of the minimum exemption without making a declaration of income.

It appears, therefore, that assessment at the source does not, under this law, operate in such a way as to afford the taxpayer any substantial relief from the necessity of making a revelation of his income to tax officials.  Whatever basis there may be for the common criticism or complaint that an income tax is inquisitorial remains under the operation of this law to nearly the same extent that it would if the tax were levied wholly and directly upon the recipients of the income, with no resort to taxation at the source.

Regarding the assessment of the additional tax not much need be said in the way of explanation.  It is, in theory at least, a comparatively simple matter.  There is no attempt here to make any application of the principle of collection at the source.  The tax is all levied directly upon the recipients of the individual incomes, and the assessment is based upon the taxpayer’s declaration, which for the purposes of this tax must cover the “entire net income from all sources, corporate or otherwise.”  The tax is thus largely distinct from the normal income tax as regards both the method of assessment and the rates.  It is, however, to be administered through the same machinery, and no doubt to some extent the information obtained as to the sources of income in connection with the assessment of the normal tax will prove useful as a check upon the returns of income required for assessment of the additional tax.  Every person whose income exceeds $20,000 will be subject to both taxes, the normal and the additional, but presumably will be required to make only one declaration.  For the purposes of the additional tax he will be required to declare his income from all sources, and therefore any relief from the obligation of making a complete revelation of income which may be secured to him through the application of the principle of assessment at the source in connection with the normal tax will be entirely sacrificed.