Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-06-27
Many Amendments as to Exemption
of Corporations.
ALL THOSE OFFERED WERE LOST
Mr.. Hill Begs for Something He
Can Defend.
NJ ALTERS IN THE HOU S E

Twenty minutes were spent awaiting the
appearance of a quorum. A bill to amend
the act providing for the times and places
for holding terms of United States courts
in the state of Washington was passed.
| Then, at 1880, the debate on the income
tax provisions of the tariff bill was re-
suned. The pending amendment was that
! of Mr.. Allison, to exempt corporations
companies or associations having a capital
stock Of less than slOOOO. Mr.. Hill IN. "
| Immediately took the floor. The theory of
this income tax. he said was that the in
| comes from individual investments unless
| they exceeded $4,000 should not be sub
jected to the tax. But no such Limitations
! existed as to corporations. He could see
no reason for the distinction. He thought
some amendment should be adopted that
| would give. small corporation the same
| exemption granted to individuals.
Corporations Entitled to No Exemp-
tiOu.
| Mr.. Vest. in reply to Mr. Hill, said that
under the present system Of taxation, un-
der the tariff system, the citizens paid
upon consumption. 1t was unjust and un-
equal. The poor paid practically as much
as the rich. Property and incomes, in his
opinion. should pay for the protection of
the government. Why should taxes be
levied not upon the property but upon the
wants OF the citizen? The AOp exemption
| to individuals whether the figure was the
correct one or not. was the amount fixed
as the cost of living. Corpora tions con-
| suned nothing. They were entitled TO no
exemption. and should have none
MI. Vest called attention to the fact that
curing the war tax OF per cent was
levied against the output OF corporations or
companies. Here was a proposition to pay
not on the. output, but per cent on the net
pronts if the corporation lost money 1t
paid nothing.
Mr. Vest thought the bill was peculiarly
Just and considerate of corporations II
the rule that applied to individuals how
ever, was to be applied to corporations the
exemption of $1,000 should be allowed cor
tporations, large small The amount of
the capital stock of a corporation was no
criterion. OF the business 1t did or the profits
II made Corporations with a capital Of
$b.Oo or $lU,OOo often did as much bus
mess as corporations whose capital stock
ran into the millions.
Mr. Allison MOdihes His Amendment.
Mr.. Allison modified his amendment so az
to exempt corporations whose capital and
surplus did not exceed 500. .OOO the cost of
insurance. etc. Of any manufacturing or
| trading company to be considered in es-
timating operating expenses. Unless small
stock holders could be made exempt as was
proposed In an amendment of Mr. Smith
SN,J2, Mr.. Allison said the small stock
holders could be. to some extent protected
by exempting small corporations as was
proposed in his amendment. The Smith
amendment provided that the amount Of
any dividend paid single stockholders not
In excess of $1,000 should be deducted nv
the corporation from any estimation Of
profits upon which IL would otherwise paw
me tax but the amount of such dividend
snould be included In the income Of the in
dividuai In case the income exceeded 81. 4.OO0
The Amendment Withdrawn.
Mr.. Allison finally decided. in view of Mr.
|
which he had offered.
MIR. Teller Col) thought there was a
great deal Of nonsense in the talk of pro-
tecting the interest Of the poor in CORPORA
tons. The poor did not own the railroads
and the banks. and all this anxiety man
irested here for the poor would be properly
interpreted by the country as a cover for
an attempt to protect the interests of the
rich.
! II poor man did have 500 income from
railroad it would not hurt him II he paid
s. to the government. He would be lucky
II the corporation did not rob him of all of
1t. Railroad stocks did not offer good in
Vestments to the poor. The small holders
were squeezed out at the will of the man
ipulators. Railroad stocks which were
worth SIOO,OOO.OOO a few years ago were
worth In the market less than S1O00OOO
today. lntrinsically they were worth prob
here for the small stockholders Mr. Teller
characterized as pure buncombe He did
not want to see the income tax made
odious.
Have you heard of farmer in the
United States who does not favor t?'
asked Mr.. Lindsay (KyD.
II have not replied Mr.. Teller. II
think they are practically unanimous in
their support of it,
To Exempt Savings Banks.
Mr.. Perkins (Cal) offered an amendment
in the shape Of a proviso exempting from
1 . H. Al
banks doing a commercial business whose
capital stock is held as a special guarantee
] fund for the benefit of their dapositors
He sent to the clerks desk and had read
a telegram from the presidents of thirty
three California savings banks, representing
131,00O depositors. with slO0OO0,OOO Of de-
posits. suggesting and advocating the
amendment. These depositors ranged less
than $1,000 each and should in justice and
equity be exempt.
Harris moved to lay the amendment on the
! table. Mr.. Perkins protested against hav-
| ing the debate on his amendment summar-
lily cut off. You have no right to do this"
! said he. appealing to Mr. Harris.
But l will assert the right" replied the
Senator from Tennessee.
Mr.. Perkins thereupon withdrew his
| amendment at the suggestion of Mr. AL
drich, who said he would later offer an
| amendment covering the same point cx-
empting savings banks organized on the
mutual plan solely for the bencfit of their
| depositors
Mr.. Smiths Amendment.
Mr.. Smith of New Jersey at this point
offered the amendment of Mr.. Mcpherson
to exempt dividends of corporations to in
dividuals not exceeding $1,000.
| Mr.. Smith (N.J) supported the amend
ment in a brief speech, in which he dwelt
upon the fact that If the income tax pro-
visions W ere passed without the adoption of
some such ar amendment there would be a
discrimination against the widow, the or
| phan and the man Of moderate means
Small investors in corporations should not
be Disseminated against.
| LAS / understand the amendment" said
Mr.. Hunton Na), interrupting Mr.. Smith
| 1T proposes to except from the payment of
the income tax small stockholders"
| That is right
Then l want to ask the Senator" con-
| tinued Mr.. Hunton, whether he thinks IL
his amendment prevails that there would
be any large stockholders. Would the large
among their wives. children. uncles, aunts
nephews and nieces, and thus destroy ali
revenue from this prop osed tax on corpora
tionsy'
| Mr.. Smith replied that there was nothing
| in the income tax provisions which would
prevent a man, IL he saw fit, from trans
| ferring his individual investments in a like
manner. and thus avoid the payment of an
| income tax. The question involved in this
| amendment was whether small investors in