Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-09-22

| adopt the proposed amendment to the
constitution, however, to make an in
come tax possible in time of need.
The president declared that the cor
poration tax was in itself the best form
of income tax that could be levied and
pointed out that 1t contained many of
the best features Of the income tax
law. Of England. In urging that the
states should vote for the amendment
to the constitution permitting the levy
of direct income tax without appor-
tioning the proceeds among the states
according to their population, the pres
ieent declared that it would be possi-
BILE so to amend the corporation tax as
to include within it's scope every de-
sired feature of an income tax except
the levy upon incomes derived from ac-
tual salary and professional services.
An Emergency Measure.
The president said he opposed a di-
rect income tax except in cases of en-
ergency and he believed it to be a
prime fault In the federal constitution
that no provision is made for direct
levy to meet war time or other extra
ordinary expenses.
Mr.. Taft declared that 1t was the SUI
preme court decision declaring uncon- :
stitutional the income tax law passed
by a democratic congress some years
ago that prevented the leaders in con-
gress during the session recently closed
from including in the corporation tax
measure a. provision for a levy on
bonds and bond holders. To tax bonds
would result in the reduction Of the
rate of interest and hence this resulted
In a direct tax upon the individual
holders of the bonds and came in con-
tact with the decision Of the court that
nc direct tax could be levied by the
national government without the re-
sulting apportionment of the proceeds
among the states.
The president based his argument in
favor of the corporation tax, as COM
pared to the direct income tax, almost
entirely upon the results of the income
tax in England. He pointed out that
the tax there is not a direct levy, such
as was recently defeated in the senate
only thru a compromise, but that it laid
tax upon the income before it came
into the hands of the Individual
The English tax is levied first on the
declared dividends of corporations, sec
ondly on rents before leaving the hands
of the tenants, and thirdly on the indi-
vidual directly. 1t was found in Eng
land that direct income tax at 10 per
cent did not produce as much revenue
as the present method Of taxation at S
per cent. This, he declared, illustrated
the premium that the direct tax places
upon the perjury and concealment. 1t
is question, the president declared,
whether incomes on earned salaries
and professional work should be taxed
as heavily as incomes derived from in
vestments, or not taxed at all. The
latter, he said, was the effect Of the
corporation tax
Touches on the Tariff.
Mr. Taft touched briefly on the tar
iff, saying that while revision had
been deemed essential, there was also
deficit in the treasury to be met. This
partly will be met by cut of $40,-
100000 to $50,O00.000 in the appropria-
tions to be made by congress and part
~ by the income from the new cor
poration tax law, Mr. Taft said he had
favored at first an Inheritance tax, but
the objection that the states had pre-
empted that field, had sufficient weight
to defeat the proposition. The presi-
dent continued:
"A part of the republicans and all of
the democrats of the senate united in
pressing for consideration a general in
come tax on individuals thruout the
United States. The law was as near as
1t could be made to that income tax
law which had once been considered by
the supreme conrt some ten years ago
and which was held to be unconstitu-
tional by vote of five to four 1t was
conceded that the tax would probably
raise $150,00O,O00 to 100000, ,OO0 which
was far in excess Of the needs of the
government if the tariff bill was to re-
tain its general form, as proposed, and
so to produce revenues which should
be reasonably expected Our friends,
the democrats, favored the income tax
with a view to substituting it for the
tariff as an income producing measure,
thus minimizing the effect of the tariff
in promoting the industries of the
country In other words, the passage
of the income tax bill would have lent
support probably to the proposition to
have tariff for revenue only and
would have interfered with the protec-
tive policy in which the republican par
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