The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1871-01-05

the Dill as reported by the SENATE Il nance
Committee the letter of the law is such
as to postpone until August, 1871, the re-
lief which was designed to be immediate.
Section II provides that sections 1870, lo1
and 1872 of the act of June 80, 1864, as
amended, shall be construed to impose
the taxes therein mentioned to August !,
1870, and no longer. Section Is provides
that there shall be levied and collected
for, and during the year 1871 a tax Of
two ana a half per centum on the amount
of all interest or coupons paid, or bonds
or other evidences of debt, issued and
payable in one or more years after date
Oy any of the corporations in this sec.
ton hereafter mentioned, and the amount
of all dividends of earnings in or gains
hereinafter declared by any bank, trust
company, saving institution, insurance
company, railroad company, canal com
pany, turnpike company, canal navigation
company, and slack water company, when
ever and wherever the same Shall be
payable, and to whatsoever person the
same may be due, including non-resdents,
whether citizens or aliens. 1t is believed
to have been the intention to continue
and to substitute tax Of "a per cent.
therefor on and after that date, but,
owing to the peculiar language Of the
statute, no tax can be withheld from
coupons falling due during the last five
calender months of 1870. According to
recent decision of the Circuit Court in
the State of Pennsylvania, no tax can be
withheld from dividends. coupons, or in
terest payable during the first seven
months of 1870, and it is further main
tanned that corporations cannot be re-
quired to lay any taxes unon the divi-
dends payable during the remaining five
months.
The right to withhold tax from the
salaries of persons in the civil, military
or naval service of the United States du-
ring the first seven months of 1870, turns
also upon The points involved in the
case above named The amount of tax
indirectly involved in' this question is
very little less than six millions of dol
lars. 1t is of such Importance that have
not felt at liberty to acquieSce in the de
cision of the Circuit Court until it shall
1e affirmed by the court of last resort
Steps have been taken, therefore, to have
the opinion OF the Supreme Colrt Of the
United States pronounced upon the CUES
tion at issue therein.
deem it proper to state that as early
as January 4, 1870, called the attention
OF Congress, Through its appropriate com
mittee, to the antiquities of the law
then in force, and the difficulties likely
in al IF
and asked for legislation upon the sub.
ject. This request was repeated Feb 8,
April and %, and May 26 following,
and was repeated orally and in person at
several other times. The legislation was
finally enacted July IA, but has been de-
clared by the Circuit Court of Pennsyl
vania to have been too late to serve the
purpose desired. It is provided in sec
ton Is that when any dividend is made
or interest paid, which includes any part
of the surplus or contingent fund of any
corporation which has been assessed and
the tax paid thereon or which includes
any part of the dividends, interest. or
coupons received from other corporations.
whose officers are authorized by law to
percentum on the same, the
amount of tax so paid on that portion of
the surplus 70 contingent fund, and the
amount of tax which has been withheld,
and paid on dividends, interest, or cou
pons so received, may be deducted from
the tax on such dividends or interest.
Owing to change in the rate of taxation
from 5 per cent. to ~ per cent taxes
paid upon surplus prior to Au
gust may now be again appropriated to
the payment of taxes upon earnings
since that date, so that in some cases
these later earnings escape valuation en-
tlrely. 1t would have resulted different
ly if the law had provided for deduc
ton Of tax from tax.
By my direction, the collection Of tax
es on shipbuilders, assessed under the
fourth section of the act of March 81
1868, was ordered to be suspended II
would recommend that Congress provide
for t he remission OF all such taxes assess
ed but not collected on the sales of shin
builders.
By act of Congress, approved August 5.
1851, direct tax of twenty millions Der
snnum was apportioned to all of the then
existing States and Territories and the
district Of Columbia This act provided
that erch State, Territory, and the Dis
;rict of Columbia, might pay it's own
quota, if notice of the intention thereof
should be properly given on or before
,he second Tuesday of February next
thereafter. Under this provision of law
Ill the States, Territories, and the Dis |
riot of Columbia, formally assumed the
of the tax, except Delaware, the
rerritery of Colorado and the eleven in |
States, Provisions were
made for collections to be made in Dela.
ware and Colorado by internal revenue
officers, and in the eleven insurrectionary
States by the appointment of United
States direct tax Commissioners nndor