Omaha daily bee., 1909-06-26
Every Character of Proft-Making
Corporations is Affected.
UNNING EXPENSE DEDUCTED
RETURNS TO BE UNDER OATH
Government Agents Forbidden, Undes
Penalty, from Disclosing Con-
adentiRl Information TO
Business Rivals.

WASHINGTON, June 25. - President
Taft's much heralded corporation tax
plan was presented to the senate today by
Mr.. Aldrlch. chairman of the finance com
mittee and was ordered printed com
mittee amendment to the tariff bill, IL
schedules are completed by Monday the
tax amendment will then be
taken up and held before the senate until
final disposition is made Of il and of
amendments on the subject of a direct
tax on incomes.
In general form the corporation tax
measures follows the outline given by the
Associated Press after the conference at
the White House on Tuesday night, when
the subject was considered by the presi-
dent, lawyers of his cabinet and senate
and house republican leaders. AS drafted
by Attorney General Wickersham and
Senator Root, the measure is believed to be
amendment proof and an effort will be
made to put 1t through congress un-
changed. 1t will be designated as the
Taft plan" the weight of the presidents
name being depended upon largely to en-
compass its enactment.
Tax on Earnings.
Briefly stated, the plan imposes a tax
of 2 per cent upon the net earnings of
every corporation, joint stock company or
association, organized for profit and hav-
ing a capital stock represented by shares,
and every insurance company organized
under the laws of the United States or
Of any state, territory or district or or
ganized under the laws of any foreign
country and engaged in business within
the United States.
Every latitude is given to concerns sub
ject to the tax for the exemption of ex-
penses, cost OF maintenance, the depre-
ciation of property, debts and the interest
thereon, other forms of taxation and all
expenditures usually taken from earnings
accounts. Every corporation is also given
an exemption of s. 900 of earnings before
the tax shall apply.
All of the machinery relating to the col
lection, remission and refund of internal
revenue taxes is made applicable to the
corporation tax and the responsibility for
the enforcement OF the proposed law rests
with the commissioner of internal revenue
in the same manner as other internal
taxes.
While the corporations are required to
supply information OF a most intimate
character relating TO their business, pro-
vision is made to safeguard them against
wrongful use of data obtained for the
purpose of assessing the tax. Penalties arc
provided in cases of false or fraudulent
returns
Scope of Tax Wide.
Practically every character Of incorpo-
rated institutions organized for profit is
brought within the provisions of the cor
poration tax. The provision defining the
concerns from which the tax will be col
lected is as follows:
That every corporation, Join stock com
pany or association, organized for profit
and having a capital stock represented by
shares, and every insurance company, now
or hereafter organized under the laws of
the United States or of any state or terri
tory of the United States, or under the
acts Of congress applicable to Alaska or
the District of Columbia. or organized un-
der the laws of any foreign country and
engaged in business in any state or terri
tory Of the United States in Alaska
or in the District of Columbia, shall be
subject to pay annually a special excise
tax with respect to the carrying on or
doing business by such corporation, Joint
stock company or association, or insurance
company, equivalent to 2 percentum upon
the entire net income. over and above 5000,
received by II from all sources during
such year, exclusive OF amounts received
by II as dividends upon stock of other
corporations, joint stock companies or asso-
Citations, or insurance companies, subject
10 the tax hereby imposed, or II organized
under the laws of any foreign country.
upon the amount Of net income, over and
above IS, 900, received by 1t from business
transacted and capital invested within the
United States and it's territories, Alaska
and the District of Columbia, during such
year. exclusive Of amounts so received by
It as dividends upon stock Of other cor
porations, joint stock companies or asso-
Citations or insurance companies, subject
to the tax hereby imposed
Legitimate Expense Deducted.
such net income shall be ascertained by
deducting from the gross amount OF the
income of such corporation, joint stock
company or association, or insurance COM
pany from all sources all the ordinary and
necessary expenses actually paid within
the year out OF income in the maintenance
and the operation of it's business and
properties.
"AlI losses actually sustained within the
year and not compensated by insurance or
otherwise including a reasonable allow
ance for depreciation Of property II any,
and I'm the case OF insurance companies the
sums required by law to be carried to
premium reserve funds.
Interest actually paid within the year
on it's bonded or other Indebtedness not
exceeding the paid-up capital stock Of such
corporation, joint stock company or as
sociation, or insurance company Outstand-
ing at the close OF the year.
"All sums paid by 1t within the year for
taxes imposed under the authority OF the
| United States or any state or territory
| thereof
/ IAN amounts received by Il within the
year as dividends upon stock Of other cor
/ poratons, joint stock companies or as
sociations, OF Insurance companies, sub
ject to the tax hereby imposed; provided
| that in the case OF a corporation, Joint
stock company, or association, or insur-
ance company, organized under the laws
Of a foreign country such net income shall