8 REPORT OF THE COMPTROLLER OF THE TREASURY

Acts of 1941, has been functioning in pursuance of that Law. You
made appropriations for the fiscal years 1944 and 1945 to provide
the money to supplement departmental budgets where this was
necessary to give effect to the scale of salaries and wages prescribed
by the Board, where it was not possible to absorb this additional cost
in the regular departmental budget. The amount used for this pur-
pose was $592,851.00 in 1944, and it is estimated $729,000.00 will
be required in 1945.

Income Tax. This is our most productive tax for general purposes.
I have included in this year's report a special income tax statement,
showing the receipts of this tax since its beginning. The figures by
years, both as to the tax years and the fiscal years in which received,
should not be compared without understanding that the rates were
not the same for all years and that other factors, such as personal
exemptions, etc., are to be taken into consideration in any study
which might be made of the figures. The first income tax law was
passed in 1937. It provided for the taxing of incomes for the years
1937 and 1938, the rate being one-half of one per cent. The Session
of 1939 enacted another income tax law, classifying income as either
ordinary or investment income and taxing the former at two and
one-half per cent and the latter at six per cent. The rate of tax on
corporations was one and one-half per cent. At the same time the
tax on intangible property, generally referred to as the securities
tax, was discontinued—the tax on investment income being a suc-
cessor tax.

The Session of 1941 amended the income tax law, reducing the
rates on ordinary and investment income to two per cent and five
per cent, respectively.

The Session of 1943 made further amendments to the law, and
while not changing the basic rates of tax on the two classes of in-
come, authorized the taxpayer to take a credit of thirty-three and
one-third (33-1/3) per centum of the tax calculated on the basic
rates. The session of 1943 also authorized the Board of Public Works
to increase the credit to be taken by the taxpayer in the event the
State's surplus exceeded the estimate; and the surplus haying
exceeded the estimate, the Board of Public Works duly prescribed
an increase in the credit to fifty per cent on returns other than for

corporations for the taxable year 1943.

Post-War Construction. At your 1943 session the Budget you
passed appropriated $2,000,000.00 to the Board of Public Works,
for construction and other capital improvements at State Institu-
tions, and for other Agencies, in connection with carrying out any
program to be adopted by the State in providing for post-war pro-
jects, to be available July 1, 1943. You will find a supplemental
statement showing the post-war construction fund following the
regular budget statements in this report. The appropriation of
$2,000,000.00 has been supplemented to the extent of $685,946.77
by transfers of the balances, at June 30, 1944, in the war emergency