Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1909-06-24
IMPORTANT
CONFERENCE
Pres. Taft Talks of Proposed Cor
poration Tax with Repub-
licaN Leaders.
DETAILS ARE ARRANGED
An Amendment 10 Tic Made Defining
LOSSES Tint May he Deducted
from Net Enrniugs-A Penalty
for Fraudulent Return to
he $1,000 to $4,000.

| Washington. juno 2o.-Dctails Of the pro-
posed measure for the taxation of net
| earnings of corporations were arraigned
tonight at the most important confer
ence that has been held at the White
House since MIR. Taft assumed the prcsl-
dency.
There were present rs the Presidents
guests at dinner Attorney General Wick
rsham and Senator Root. who are
charged with the task Of drafting the
measure; Secretary Of State Knox. Sena-
tors Aldrich. Burrows. Penrosc. Hale.
Cullom. Flint. Smoot; McCumber and
Lodge constituting the republican mem
bcrshp of the Senate finance committee;
Speaker Cannon. Representative Payne
chairman of the House committee on
ways and means. and Representative
John y. Wright Of New York, the rcpub-
lican whip of the House.
| The statesmen sat down to dinner In
the state dining room at eight o'clock.
No business w3s discussed at the dinner
but for two hours afterward the corpora
ton tax measure, which had been pre-
pared In the form of an amendment to
the tariff bill. was viewed from every
anl,e Many changes from the form In
which it was presented were suggested
md not n few OF these were declared 10
be wise.
The result was that the carefully
prepared copies which was given to
erch member Of the party by Attorney
General Wic,ersham were returned to
him at the end Of the conference.
President Taft himself suggested
that the copies should not be taken
by the members of tho party until
the amendment had been perfected.
All agreed not to make the form of the
amendment public until Il Is ready
to be introduced in the Senate
finance committee amendment to the
tariff bill
The terms Of TIE measure as finally
agreed upon, although not yet whip
ped into form. provide that all cor
porstions having capital stock and Of
ganized for profit shall pay a tax pc:
cent upon their net earnings. Corpor
ations coming within that designation
will be compelled to make returns to
specially named agents Of the bureau
of internal revenue Of the treasury
department, giving the amount of
their gross receipts capital stock,
, bonded Indebtedness and all other Wis
ible debts. Separated from these re-
, turns the corporatione Will be com
PEELED to report the amount Of their
net receipts. after dcductinK their
, general and ordinary running ex-
pensos. interest on bonds up to the
: amount Of capital stock OF the corpor-
alton. tho interest on notes ana other
forms of tangible Indebtedness. and
any actual loss that may have been
incurred in business, which loss was
not made up by salvage or other form
: of return.
The amendment will define in the
broadcast possible woy the character OF
! losses which may be deducted from the
net earnings upon which the tax is TO
be collected Those losses Will include
bad accounts Of mercantile corpora
ton losses upon securities held ny banks
uncollcctible notes and all other forms OF
bad debts which are usually charged 10
profit and loss accounts.
A 5000 EXEMPTION.
= As ha. been stated before the two per
cent. tax will apply to all corporations
organized for profit by exchange but
: avery corporation will be allowed a s, 0ve
; exemption which means that the tax will
not be collected except upon earnings IN
excess OF 5000.
ANY corporation which makes false
report to an agent OF internal revenue
who has designated to collect information
regarding earnings or has made n
fraudulent return upon any OF the sub
iects covered by the law will be sub
icctcd to a penalty. The amount Of this
! penalty is the only feature Of the bill
b which was not decided tonight, Most OF
the participants In the conference OK
pressed the opinion that this penalty
= should range from :, on TO SloMO. the
amount to he fixed by United States
court upon presentation of all OF the facts
> connected with such fraudulent terms.
The tax will be collected upon the en-
= tire amount OF preferred and common
> stock Of every corporation and upon the
" bonds Of a corporation where they ex-
coed the total amount OF capital.
, NO LIMIT ON THE LIFE OF THE
BILL.
q II is intended that tho tax bill shall
9 become operative Immediately upon the
i passage of the law. The life Of the
: measure was made indeterminatc. In
r stead Of two years or some other tix~|
= Limitation such as had been suggested
t originally. The present years tax will
|. be collectablc July /. 1910. the beginning
d Of the next fiscal year,
e Some fear was expressed that agents
d of tho internal revenue bureau might
h use information obtained In some way
: so as TO injure the business OF a cor
: ncration This danger was discussed to-
e night and 1T was decided that only es-
It pec,ally designated agents OF the bu'
n reau should be permitted to interrogats
= CORPORATIONS concerning their business
q The corporations make their returns d.
q rectly to the bureau of Internal revenue
J. In Washington.
- INSURANCE COMPANIES INCLUDED
=. 1t was decided at the conference to-
~ night that all Incorporated insurance
- companies organized for profit shall be
. brought within the terms OF the proposed
!. corporation tax law. This will not ex-
y, empt so-called mutual insurance COM
a panics which admittedly or which car
be proved to have been organized AZ
profit taking institutions Neither viii
lit exempt fraternal insurance concerns
which come within that interpretation
of the law.
N Estimates given tonight place tho
l. amount that would be raised by the
u proposed two per cent. tax on net earn
n ings OF corporations, after taking Into
t, consideration all Of the exemptions stat