EMPLOYMENT TAXES with the provisions of this subchapter, be applicable with respect to the taxes imposed by this subchapter. SEC. 1431. EFFECTIVE DATE OF SUBCHAPTER. This subchapter shall take effect on the first day of that quarter of the calendar year occurring next after the enactment of this title. SUBCHAPTER B-EMPLOYMENT BY CARRIERS Part I-Tax on Employees SEC. 1500. RATE OF TAX. In addition to other taxes, there shall be levied, collected, and paid upon the income of every employee a tax equal to the following per- centages of so much of the compensation of such employee as is not in excess of $300 for any calendar month, earned by him after the effective date of this subchapter- 1. With respect to compensation earned during the calendar year 1939, the rate shall be 23/4 per centum; 2. With respect to compensation earned during the calendar years 1940, 1941, and 1942, the rate shall be 3 per centum; 3. With respect to compensation earned during the calendar years 1943, 1944, and 1945, the rate shall be 3/4 per centum; 4. With respect to compensation earned during the calendar years 1946, 1947, and 1948, the rate shall be 3/2 per centum; 5. With respect to compensation earned after December 31, 1948, the rate shall be 33/4 per centum. SEC. 1501. DEDUCTION OF TAX FROM COMPENSATION. (a) REQmREM1mNT. - The tax imposed by section 1500 shall be col- lected by the employer of the taxpayer by deducting the amount of the tax from the compensation of the employee as and when paid. If an employee is paid compensation by more than one employer with respect to any calendar month, then, under regulations made under this subchapter, the Commissioner may prescribe the proportion of the tax to be deducted by each employer from the compensation paid by him to the employee with respect to such month. (b) INDEMNIFICATION OF EMPLoYER. -Every employer required un- der subsection (a) to deduct the tax shall be made liable for the payment of such tax and shall not be liable to any person for the amount of any such payment. (c) ADJUSTMENTS.- If more or less than the correct amount of tax imposed by section 1500 is paid with respect to any compensation payment, then, under regulations made under this subchapter by the Commissioner, with the approval of the Secretary, proper adjust- ments, with respect both to the tax and the amount to be deducted, shall be made, without interest, in connection with subsequent com- pensation payments to the same employee by the same employer. SEC. 1502. OVERPAYMENTS AND UNDERPAYMENTS. If more or less than the correct amount of the tax imposed by sec- tion 1500 is paid or deducted with respect to any compensation pay- ment and the overpayment or underpayment of the tax cannot be adjusted under section 1501 (c), the amount of the overpayment shall be refunded, or the amount of the underpayment shall be collected in such manner and at such times (subject to the statute of limitations properly applicable thereto) as may be prescribed by regulations under this subchapter as made by the Commissioner, with the approval of the Secretary. SEC. 1503. NON-DEDUCTIBIUTY OF TAX FROM NET INCOME. For the purposes of the income tax imposed by chapter 1 or by any Act of Congress in substitution therefor, the tax imposed by section 1500 shall not be allowed as a deduction to the taxpayer in computing his net income. 179
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