The sun., 1909-06-23
CONFER WITH TAFT ON TAX
CONGRESS LEADERS NAVE LONG
SESSION AT WHITE HOUSE.
Proposed Amendment 10 Levy on In.
comes OF Corporations is Consltl.
credit VIII He Pressed to Vote At
This Session--No Limit on Operation.


comes OF Corporations Is ConsItl.
credit VIII He Pressed TO Vote NJ
This SessiOn-No Limit on Operation.
WASHINGTON. June % With the object
OF reaching final agreement on the
terms Of the amendment to the pendin g
tariff bill providing for a per cent. tax
on the net incomes of corporations Presi-
dent Taft had conference tonight with
the Republican members OF the Senate
Finance Committee and others whose
advice and assistance he regarded as
necessary to the success of the propo-
sition.
Thoss who participated in the confer
ence came early and stayed late, The
discussion Of the points involved was
begun at dinner and wa4 continued
over the coffee and cigars.
In addition to the President. those who
were present at the dinner conference
were Attorney General Wickersham,
Senator Root. to whom was entrusted the
important task Of framing the terms
Of the proposed amendment; Secretary
Knox, Speaker Cannon. Representative
Payne. chairman Of the House Com
mittee OH Ways and Means; Repre-
sentative Dwight Of New York. the
Republican whip Of the House, and
Senator's Aldrich, Burrows. Penrose.
Hale. Cul!om, Lodge. McCumber. Smoot
and Flint Of the Senate Committee on
Finance.
1t was determined at the conference
that Secretary Knox. Attorney General
Wickersham and Senator Root should
perfect the terms OF the amendment in
accordance with the views expressed
by the conferees before it Is submitted
to the Committee on Finance, which Will
report it to the Senate.
The belief prevailed when the con-
ference adjourned that the Finance Com
mittee would not be able to report
the amendment before Thursday. The
amendment as presented to those gath
cred at the White House is brief and is
expressed in clear. terse terms, As far
as the conferees were able to disclose
from their knowledge OF the subject there
will be little opposition to the corporation
tax among the Republican members Of
the Senate.
y One thing determined was that the
imposition Of the tax should not be limited
to a term OF years. The Republican
leaders OF the Senate were at first inclined
to insist that the tax should not be in
existence for more than two years, but
yielded to the Presidents desire that
its life should not be curtailed.
An important provision Of the amend
ment requires that corporations shall
make returns on their groas rs well az
their net incomes. but it-b provided also
that there shall be no investigation OF
the accuracy Of such returns unless the
Of the Treasury has reason to
suspect that false statement has been
made. In such cases the Secretary Of
the Treasury is authorized to make an
This is regarded as a most importan.
provision Of the amendment in the line
OF inauisitorial functions given to the
Federal Government, but it is declared to
be not nearly 30 radical in an inauisi-
torial way as some OF the features OF the
Bailey -Cummins amendment which the
Democrats and the more radical OF the
Senate insurgent Republicans hoped to
attach to the tariff bill
There was lot OF talk around the Sen.
ate to-day that the Republican leaders
the Democrats and the insurgents by
which the consideration OF the income
tax and the corpora ton tax would be
until next December.
At the White House conference it was
that the amendment should
be brought forward for action at the pres
ent extra session and pressed to vote.
Under the terms Of the amendmen; "a
drawn by Mr. Root and Mr.. Wickersham
II will become effective Immediately. but
the collection of the tax will not take place
until June, 1910 This tax will be for the
year previous to that time. Speaker Can
non and the other members Of the House
present were able to give the satisf actory
assurance to the President and his guests
that the situation in the House would be
favorable to the adoption Of
the amendment.
According to estimates made tonight
the new law will yield from S25 900, 900 TO
$50 OOO, 900 a year. The tax will apply to
insurance companies. including mutual
concerns.
The penalty for violation Of the law
has not been fixed. but it will probably be
in sums ranging from $1,000 to $4,000
In the discretion Of the court. The
for enforcing the law will be
in the Bureau OF Internal Revenue.
The proposed amendment provides for
the imposition Of a 2 per cent. tax on
the net incomes OF all corporations, with
a proviso that 5000 OF the net income
OF every corporation shall be exempt
from this excise assessment
1t is provided further that national
banks shall be taxed the same as other
but a rebate to the amount
paid by them under the law requiring a
tax on the circulating notes issued by
banks shall be allowed. In order
to prevent corporations from converting
the stock into bonds and thus evading
the purpose OF the proposed law it is
provided that funds set aside by corpora
tions for the purpose Of meeting interest
obligations OH bonds shall he taxed only
for the proportionate interest payments
on bonds issued In excess OF the amount
OF capital stock OF each corporation con-
cerped. This means that u corporation
with a capital stock OF si00C issued
tI- A. H. .,,,,,ot ~ Nsnn mn 10 ,,,;u -,