Orange County observer. [volume] (Hillsborough, N.C.) 1880-1918, 1909-06-24

of President Taft on the subject OF
taxing incomes Of corporations was
received in the Senate and read lmme-
diately. 1t is as follows;
cit is the constitutional duty OF the
President from time to time to recon-
mend to the consideration OF Congress
such measures as he shall Judge neces-
sary and expedient. In my inaugural
address, Immediately preceding this
extraordinary session Of Congress, l
invited attention to the necessity for
a revision of the tariff at this session,
and stated the principles upon which
T thought the revision should be ef-
fected.
81 referred to the then rapidly in
creasing deficit and pointed out the
obligation on the part OF the trainers
of the tariff bill to arrange the duty SO
as to secure an adequate income, and
suggested that if it was not possible
to do so by import duties. new kinds
CO taxation must be adopted, and
among them I recommended a grad
uated inheritance tax as correct IN
principle and as certain and easy OF
collection.
"The House Of Representatives
adopted the suggestion and has pro-
vided in the bill it passed for the col
lection of such a tax. In the Senate
the action of it's Finance Committee
and the course Of the debate indicate
that it may not agree to this provision
and it is now proposed to make up n
deficit by the imposition Of a general
income a in form and substance OF
almost exactly the same character as
49, A.L =. &h~ ooGh ~ Dnl1nnH
VS.. Farmers Loan & Trust Company
!(157 U. S. 429) was held by the Su-
preme Court to be a direct tax and
therefore not within the power of the
Federal Government to impose unless
aprortioned among the several States
according to population. This new
proposal, which I did not discuss
in my inaugural address, Of in my
message at the opening of the present
session, makes it appropriate for me
to submit to the Congress certain
additional recommendations.
Amend Constitution.
"The decision Of the Supreme Court
in the income tax cases deprived tho
National Government Of a power
which, by. reason Of previous decisions
of the court, it was generally sup
posed that Government had. It is un-
doubtedly a power the National Gov
eminent ought to have. It might be
indispensable to the Nations life in
great crises. Although I have not
considered a constitutional amend
ment as necessary to the exercise of
certain phases of this power, a ma
ture consideration has satisfied me
that an amendment is the only proper
s. s+o 1o%oh1;c1-oo- - tic
full extent. 1ss4ss--
II therefore recommend to the Con-
gress that both Houses, by a two
thirds vote, shall propose an amend
ment to the Constitution comforting
the power to levy an income tax. upon
the National Government without ap-
portionment among the States IN pro.
portion to population.
This course. is much to be pre-
ferred to the one proposed Of re-en
acting a law once judicially declared
to be unconstitutional. For the Con
gross to assume that the court will
reverse itself, and to enact legislation
on such assumption, will not strength.
en- popular confidence In the stability
of judicial construction Of the Con
stitution. 1t is much wiser policy tt
accept the decision and remedy tbs
defect by amendment in due and reg.
ular course.
Again, it is clear that by the en-,
actmsnt of the proposed law the Con
gress will not be bringing money int
the treasury to meet the present de
ficie-cy, but by putting on the statute
books law already there and neve.
repealed, will simply be suggesting tt
the executive officers of the Govern
ment their possible duty to invok'
litigation. If the court should main
tain it's former view, 10 tax would b
collected at all. If it should ultimate
ly reverse itself, still nc taxes woul
have been collected until after Pre-
7tracted delay.
People Favor It.
r. at is said the difficulty and della
in securing the approval of thres
fourths of the States will destroy a
chance of adopting the amendmen
Of course, no n can speak with ce
tainty upon this point, but I have b
come convinced that a great major11
of the people of this country are
favor of vesting the National Cover.
ment with power to levy an incon
tax, and that they will secure II
duOpC1On OIL Inc dueuumeuI IL u
States, if proposed to them.
Second, the decision in the Polio
case left power in the National Go
eminent to levy an excise tax WIFI
accomplishes the anne purpose as
corporation income tax, and is fir
from certain objections urged to t
proposed income tax measure.
II therefore recommend an amen
ment to the tariff bill imposing up
all corporations and joint stock co:
panies for profit, except nation
banks otherwise taxed), savin
banks and building and loan assoc
tons, al excise tax measured by t
per cent. on the net income of su
corporations. This is an excise I
upon the privilege of doing busin'
as an artificial entity and of freed
from a general partnership liabil
enjoyed by those who own the sto
/ am Informed that a two per ce
tax Of this character would bring il
the Treasury Of the United States
less than $25,O0O,0O0
"The decision Of the Supreme Co
in the cas- Of the Spreckels SUI
Refining Company against McCl