The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-06-26
Tariff Amendment Taxing Net
Earnings Of Corporations
Is Offered in the Senate by Sem
ator Aldrich
BACKED BY PRESIDENT
1t Is Expected to Go Through
With Little Opposition.
Provisions and Penalties Car
ried by the Measure.

ried by the Measure.
washington, d. c.. June 26-President
rats much heralded CORPORATION
TAX plan was presented to the senate
Just before adjournment last night
py MI Aldrich, chairman of
the finance committee and was or
dered printed as a committee amend
ment to the tariff bill. If schedules
are completed by Monday the cor
poration tax amendment will then be
taken up and held before the senate
| until final disposition is made of it
and of amendments on the subject
| OF direct tax on incomes.
| IN general form the corporation
| Tax measure follows the outline given
by the Associated Press after the
l conference at the White House on
tuesday night when the subject was
CONSIDERED by the president, lawyers
publican leaders. AS drafted by At
| torney General Wickersham, and
| senator Root the measure is believed
to be amendment proof and an effort
| VIII be made to put it through con-
gress unchanged. 1t will be
designated as "the Taft plan,". the
weight of the presidents name be-
ing depended upon largely to encom-
pass 1tS enactment.
Briefly stated, the plan imposes a
| tax OF two per cent upon the net
earnings of every corporation, joint
| STOCK company or association or
| ganized for profit and having a cap
ital stock represented by shares. and
| every insurance company, organized
| under the laws of the United States
or of any state, territory or district,
organized under the laws of any for
eign country and engaged in business
within the United States
| Exemption of $4,000.
| Every corporation is given an ex-
emption of $1,000 of earnings before
the tax shall apply Provision is
\ made to safeguard against wrongful
use of data obtained for the purpose
Of assessing the tax. Penalties are
provided in cases of false or fraud
ulent returns. The provision defining
! the concerns from which the tax will
be collected is as follows:
THAT every corporation, joint stock
company or association organized for
| profit and having a capital stock
represented by shares and every in
surance company, now or hereafter
| organized under the laws of the
/ United States or of any state or ter
ritory of the United States, or under
| the act of congress applicable to
Alaska or the District of Columbia or
organized under the laws of any for
eign country and engaged in business
1
United States or in Alaska or in the
District of Columbia, shall be sub
| ject 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 two
per centum upon the entire net in
come, over and above five thousand
dollars, received by it from all sources
| during such year exclusive of amounts
received by 1t as dividends upon stock
of other corporations joint stock COM
/ panies or association or insurance
companies subject to the tax hereby
| imposed or II organized under laws
of any foreign country upon the
amount of net income over and above
five thousand dollars, received by it
from business transacted and capital
invested within the United States and
its territories. Alaska and the District
OF Columbia, during such year, ex-
elusive of amounts so received by 1t
1 as dividends upon stock of other cor
| porations, joint stock companies or
associations or insurance companies,
subject to the tax thereby imposed.
How Ascertafned.
"Such net income shall be ascer-
1 tanned by deducting from the gross
amount of the income of such cor
poration, joint stock company or asso-
citation. or insurance company from
all sources, all the ordinary and
necessary expenses actually paid
within the year out of income in the
maintenance and operation of its
business and properties.
"All losses actually sustained within
a year, and not compensated by insur-
lance or otherwise, including a. reason
able allowance for depreciation of pro-
lperty if any, and in the case of in
lsurance companies the sums required
by law to be carried TO premium re-
tserve fund.
Interest actually paid within the year
on its bonded or other Indebtedness not
lexceeding the paid up capital stock of
such corporation joint stock company
lor association. or insurance company
loutstandfng at the close of the year.
s.An sums paid by 1t within the year
for taxes imposed under the authority
lof the United States or of any state
or territory thereof.
| IAN amounts received by ii within
1.-The year as dividends upon stock OF
i other corporations, joint stock COM
Ipanies or associations or insurance com
lpanies subject to the tax hereby i'm
provided that in the case of a cor
lporatiou joint stock company or asso-
lciation, or insurance company, organ
lied under the laws OF foreign coun-
lfry such ret income shall be ascer-
ltained by deducting from the gross
lanount OF its income from business
transacted and capital invested within
1.-THE United States and any of its ter
r1tOr1es, Aidshd diiu eaiO D1soiSt VI
|, Columbia.
Expenses Deducted.
"AlI the ordinary and necessary ex-
tpenses actually paid within the yeal
iout of earnings in the maintenance ane
lcperation Cf It's business and property
within the United States and its ter
Iritories, Alaska and the District of Col
umbia-
.All losses actually sustained within
1.-The year in business conducted by i
:. thin the United States not cofnpen
: stated by insurance OF otherwise inclu0in;
Ian allowance for depreciation of pro
Continued on Page Four.l