The Oskaloosa herald. (Oskaloosa, Mahaska County, Iowa) 1885-1919, 1909-09-23
Taft DEFENDS
CORPORATION TAX
Declares 1t Best Form of In
come Tax.
CONSTITUTION is FAULTY
President Is Joined at Denver by Sec.
rotary BaIlinger for Further Con-
ference Regarding the BaIling-
er-Pinchot Controversy.

Denver, Col, Sept 22.-In his
speech at the Auditorium last night
President Taft took up the corporation
tax passed as part of the Payne tar
iff bill and defended 1t as against the
proposition to impose direct income
tax, which he acknowledged seemed
likely to pass the senate when the
corporation tax was devised as com
promise. The president strongly urTed
that all the states should adopt the
proposed amendment to the const 'tu-
ton, however, to make an incop4a tax
possible in time of need.
The president declared that ne cor
poration tax was in itself the best
form of income tax that could be
levied and pointed out that it con-
tanned many of the best features of
the income tax law of England. He
said he opposed a direct income tax
except in cases of emergency and he
believed 1t be a prime fault in the
federal constitution that no provision
is made for direct levy to meet war
time or other extraordinary expenses.
Decision Prevents Tax on Bonds.
Mr.. Taft declared that it was the
supreme court decision declaring I'M
constitutional the income tax law
passed by a Democratic congress some
years ago that prevented the leaders
in congress during the session recent
ly closed from including in the cor.
poration tax measure a provision for
a levy upon bonds and bondholders.
To tax bonds would result in the re-
duction of the rate of interest and
hence this resulted in a direct tax
upon the individual holders of the
bonds and came in contact with the
decision of the court that no direct
tax could be levied by the national
government without the resulting ap-
portionmsnt Of, the proceeds. among
the states. 81. ..sr... ..... ..sr
The president based his argument
in favor of the corporation tax, as
compared to the direct income tax.
almost entirely upon the results of the
income tax Id England.
Not Direct Levy.
He pointed out that the tax there is
not a direct levy, such as was recent.
ly defeated In the senate only through
a compromise, but that it laid the tax
upon the income before 1t came into
the hands of the individual The Eng.
lish tax is levied first on the declared
dividends of corporations, secondly on
rents before leaving the hands of the
tenants, and thirdly ON the individual
directly. 1t was found in England
that a direct income tax at ten per
cent. did not produce as much revenue
as the present method of taxation at
five per cent This he declared illus.
trated the premium that the direct tax
places upon perjury and concealment.
1t is question, the president de.
clared, whether incomes earned sal
aries and from professional work
should be taxed as heavily as incomes
derived from investments or not taxed
at all The latter he said, was the
effect of the corporation tax.
Mr.. Taft touched briefly on the tar.
in, saying that while revision had
been deemed essential, there was also
a deficit in the treasury to be met
Mr.. Taft was Joined here by the
secretary of the interior, Ballinger
who will accompany him on a part OF
the trip through the far northwest
It is likely that the president desired
a further conference with Mr.. Bal
linger, whose conduct of the interior
department he recently upheld in
long letter called out by the BalIinger.
Pinchot controversy, before making a
final exposition of the aims and OBJ.
ijects of this administration as to the
conservation CT the resources.