The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1909-06-17
SUBMITS
A SPECIAL
MESSAGE
RECOMMENDS AN INCOME TAX
ON NET INCOMES OF THE
CORPORATIONS.
EXPLAINS PROPOSITION

| finance Committee With Instruc-
| tons to Report Not Later Than Next
| Friday Defeated by Party Vote.
| washington, June 16.-Recommenf1-
| ing a 2 per cent tax on the net in
| come OF corporations and the adoption
| OF an amendment to the constitution
| providing an income tax, without an
| apportionment among the several
states, President Taft today sent to
! Congress message embodying his
| views on the subject.
| The president speaks Of the apparent
inability of congress to agree to an in
| hefitance tax, and as regards an in
come tax, he refers to decision of
| the supreme court in the case Of Pol
| lock VS.. The Farmers Loan &, Trust
company, in which the court held the
| tax to be unconstitutional unless an
portioned according to population.
| 1T is says the president, .'un-
doubtedly a power which the govern
ment ought to have. 1t might be in
dispensable to the nations life in
| great crises
| The amendment suggested providing
for the imposition on All corporations
and joint stock companies for profit,
| except national banks (o(therwise
| taxed) savings banks and building and
| loan associations. Of an excess tax of
2 per cent on the net income Of said
corporations.
The president points out that an
other merit to the tax on corpora
| tons is the federal supervision which
! will give to the government, the stock
holders and the public, knowledge of
the real business transacted.
The message was brought into the
senate while Senator Burton was
| speaking. Senator Root being in the
chair ordered the reading Of the doc
ument as soon as the Ohio senator
stopped speaking.
When the purport Of the message
was made known, both republicans
and democrats remained in their seats
and all listened attentively.
Senator Gore moved to refer it to
| the committee on finance with in
structions to report by next Friday
/ resolution for an income tax in ac-
cordance with the presidents recom-
/ mendations. A motion by Senator AID
| rich to lay Mr. Cores motion on the
table was carried, 81 to 25, by a
strict party vote.
The Message.
| The message follows:
ITO The Senate and House Of Repre-
sentatives:
| 1T is the constitutional duty of the
| president from time to time to pre-
! sent to the consideration of congress
such measures as he shall judge nee
essary and expedent In my inaug-
| ural address, Immediately preceding
| this present extraordinary session of
congress, I invited attention to the
| necessity at once of revision of the
tariff at this session, and stated the
principles upon which I thought the
| revision should be effected. l referred
to the then rapidly increasing deficit
and pointed out the obligation on the
| part of the trainers of the tariff bill
| to arrange the duty so as to secure
an adequate income, and suggested
| that il it was not possible to do so by
| import duties. new kinds of taxation
| must be adopted, and among them I
| recommended a graduated inheritance
| tax as correct in principle and cer-
| tain and easy of collection. The
house of representatives has adopted
| the suggestion and has provided in the
| bill for the collection of such tax. In
| the senate the action of its finance
committee and the course of debate
| indicate that it may not agree to this
provision, and it is now proposed to
make up the deficit by the imposition
| of a general income tax in form and
| substance of almost exactly the same
| character as that which in the case
| of Pollock vs. the Farmers Loan Il
Trust company 157 L. S. 149) was held
by the supreme court to be direct
tax and therefore not within the pow
er of the federal government to i'm
pose unless apportioned among the
several states. according to population.
This new proposal, which | did not
discuss in my inaugural address, or
in my message at the opening of the
present session, makes it appropriate
! for me to, submit to the congress eer-
tain additional recommendations.
A Deprivation.
"The decision of the supreme court
in the income tax case deprlvos the
national government OF power, winch
| by reason of previous decisions Of the
court. it was generally supposed the
government had. 1t is undoubtedly
a power the national government
ought to have. 1t might be inaispen-
sable to the national life in great
crises. Although l have not consid-
cred a constitutional amendment nee
essary to the exercise of certain
phases of this power mature con-
sideration has satisfied ME that an
amendment is the only proper course II