The Washington herald., 1909-06-13
AN ISSUE
Both Claim Victory When
Next Vote Is Taken.
TAFT'S INFLUENCE IS FELT
senate Leaders Are Optimistic over
Outcome of Efforts TO sidetrack the
Pending Amendments and Conf
Gent of Mastering Enough sap
port 10 Pass Dividend Tax.

y
ponement is regarded as desirable. the
Finance Committee Of the Senate viii
offer an amendment to the tariff bin for
tax on certain proportion OF corpora
tion incomes as a substitute for the pend
ing individual income tax amendment,
which IS supported by the Democrats and
the radical Republicans.
In just what form the amendment viii
be drafted has not been determined. but
the indications are that it win provide for
tax on corporation incomes available
for the purpose OF paying dividends. The
Senate leaders are now inclined toward
this proposition as means OF COM
promising with their Republican asso-
ciates who favor the imposition OF an in
come tax.
There seems 70 have been considerable
misunderstanding in the minds OF Sena-
tors as TO what was proposed by Presi-
dent Taft. as way OF increasing the
governments revenues. without resorting
to the expedient OF levying a tax on In
dividuai incomes In discussing the mat
Ter among themselves earlier in the week.
Republican Senators were inclined to be-
ilieve Mr.. Taft favored a tax on dividends
paid by corporations to their stock
holders.
What Mr.. Taft had in mind. however.
according to the present understanding,
was a tax on the incomes OF corporations
out OF which dividends could be paid.
The matter Of taxing the net earnings OF
corporations. which Is regarded by SONS
Senators as amounting 20 practically the
same thing as taxing corporation incomes
| available for dividend purposes. was talk
ed over among Republican Senator'S. but
did not meet with any enthusiastic re-
ception, and was virtually abandoned
Situation Has Changed
Now. however. the situation has chang
ed to such an extent that the probability
is that the substitute 20 be offered by the
Finance Committee. representing the Re-
publican regulars, VIII provide Tor tax
on the funds OF corporations which could
be or would be used IN paying dividends.
President Taft. while 10 favor Of the
principle Of an income tax. Is doubtful OF
the propriety or utility OF providing FOR
the assessment Of a tax on incomes until
the Federal Constitution has been amend
ed 10 overcome the constitutional objec-
tions OF the United States Supreme Court
set forth IN the courts opinion in the test
case arising under the income tax provi-
sion OF the Gorman-Wilson tariff law.
For this reason he is inclined 10 regard
as impracticable the effort OF the radical
Republican Senators 70 put an income
tax amendment into the pending tariff
bill
He is represented as believing that q
tax on the incomes Of corporations would
be a much simpler and more practicable
and feasible method OF adding to the rev
enues Of the government. and Il Is under
stood he has given assurances 10 lesdtng
representatives Of his party in Congress
/ that should they deem II necessary hs
will send 10 the Senate and the House a
special message intended 20 show the ad-
vantage OF such a tax over a tax on indI-
vidual incomes.
The Republican regulars are inclined II
be optimistic over the outcome OF tht
income tax struggle IN the knowledge
that the President will assist them n
the effort to sidetrack the pending in
come tax amendment
Cummins Sees victory.
Senator Cummins. .he leader OF the IN.
come takers among the Republican. ant
Senator Bailey. who has Joined forces
with Senator Cummins in behalf Of the
Democratic Senator's. maintain with Z
confident air that they are certain tc
win when their joint income tax amend
ment is placed before the Senate Sen
ator Cumnins was claiming yesterday
that nineteen Republican Senators would
vote for the amendment These. with
the entire Democratic membership Of the
Senate, numbering thirty-One would pro-
vide fifty votes for the imposition OF ar
/ income tax, or a sure majority of FIVE.
Leaders OF the regular Republican,
smiled when they heard Of this claim. but
declined 10 comment further than 70 say
/ that the vote next Friday would show
how much the figures Of the income taxer,
could be relied on.
A tax upon the net earnings OF cor.
poratlons. 1t is said. would prevent tn,
vasion OF a payment OF a proper "a,
by corporations and accomplish the fol
/ lowing direct results, according 20 N,
administration view: Raise needed reve,
nUe. prevent watering OF stock. pro
vide desired publicity OF cooperative man
| agement. permit full inspection o.
books, necessitate a uniform system o.
/ bookkeeping. and give the government
/ all the advantages OF a Federal incorpora
I ton law.