Evening star., 1909-06-26
TAFT PLAN GIVEN OUT
Details of Corporation Tax
Amendment
MADE KNOWN TO SENATE
If Schedules Are Completed Monday
It Will Be Taken Up.
PREVIOUS OUTLINES VERIFIED
Two Per Cent Tax Imposed Upon Net
Earnings, $4,000 to Be Exempt.
Returns to Be Made Annually.
PREVIOUS OUTLINES VERIFIED

| PreSldent IaftS corporation tax plan
was presented to the Senate late yester-
day afternoon by Mr. Aldrich, chairman
of the finance committee, and was or
dered printed as a committee amendment
to the tariff BILL If schedules are com
pleted by Monday the corporation tas
| amendment will then be taken and hello
before the Senate until final disposition Is
made of it and of amendments on the
subject of a direct tax on incomes.
In general form the corporation tax
measure follows the outline already given
| by The Star following the conference at
the White House Tuesday night, when
the subject was considered by the Presi-
| dent lawyers of his cabinet and Senate
and House republican leaders. AS draft
ed by Attorney General Wickersham anG
Senator Root the measure is believed to
be amendment-proof and an effort will ue
made to put 1t through Congress un-
| changed. 1t will be designated as 1.-The
| Taft plan the weight of the President s
name being dependedkupon largely to en-
| compass its enactment
Two Per Cent on Net Earnings.
Briefly stated. the plan imposes q tax
of per cent upon the net earnings
Of every corporation. joint stock COM
pany or association. organized for profit
and having a capital stock represented
by shares and every insurance company
| organized under the laws of the United
States or of any state. territory or dis
| trict, or organized under the laws Of any
foreign country and engaged in business
within the United States.
| Every latitude is given to concerns sub
| ject to the tax for the exemption of ex-
penses, cost of maintenance. the depreci-
i dohfc md ipofo
! thereon, other forms of taxation and ali
| expenditures usually taken from earn
| inss' accounts. Every corporation is also
| given an exemption of $1,000 Of earnings
| before the tax shall apply
All of the machinery relating to the
collection. remission and refund of in
1 ternal revenue taxes is made applicable
| to the corporation tax, and the respon-
sibility for the enforcement of the pro-
posed law rests with the commissioner of
| internal revenue in the same manner as
other internal taxes.
While the corporations are required to
supply information of most intimate
character relating to their business, pro-
vision is. made to safeguard them against
wrongful use of data obtained for the
| purpose of assessing the tax. Penalties
are provided in case of false or fraudu-
lent returns
The Concerns Affected.
Practically every character OF incor-
porated institution organized for profit
| is brought within the provisions of the
corporation tax. 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 repre-
sented by shares. and every insurance
company, now or hereafter organized un-
Ger the Ia the I"nifaH nf
any state or territory of the United
States. or under the acts of Con-
| gress applicable to Alaska or the District
of Columbia, or organized under the laws
of any foreign country and engaged in
business in any state or territory of the
United States in Alaska or in the
District of Columbia, shall be subject to
pay annually a special excise tax with
respect to the carrying on or doing busi-
ness by such corporation. joint stock
company or association, or insurance
company. equivalent to per centum
upon the entire net income. over and
above $4,000. received by it from all
sources during such year. exclusive of
| amounts received by it as dividends upon
stock of other corporations joint stock
companies or associations. or insurance
companies subject to the tax hereby i'm
posed, or if organized under the laws of
any foreign country, upon the amount of
| net income. over and above 5000, re-
ceived by it from business transacted and
capital invested within the United States
and it's territories, Alaska and the Dis
| trict of Columbia, during each year. ex-
| elusive Of amounts SO received by it as
dividends upon stock of other corpora
| tions, joint stock companies or associa-
| tions. or insurance companies, subject to
the tax hereby imposed.
Ascertaining Net Income.
''Such net income shall be ascertained
| by deducting from the gross amount of
the income of such corporation, joint
stock company or association or insur-
ance company from all sources:
| "All the ordinary and necessary ex-
penses actually paid within the year out
of income In the maintenance and opera
tion of it's business and properties
"Ail losses actually sustained within
the year and not compensated by In
surance or otherwise. including a rea-
sonable allowance for depreciation of
property. II any, and in the case Of in
surance companies the sums required by
| law to be carried to premium reserve
| fund.
Interest actually paid within the year
on its bonded or other ebtedness to an
| amount of such bonded and other indebt-
| edness not exceed ng the paid-up capital
stock of such corporation, joint stock
company or association or insurance COM
pany outsta nding at the close Of the year.
'All sums paid by it within the year
| IOT taxes lIHposeu uIiuor the autnOF1ty OF
the United States or of any state or ter
ritory thereof.
''All the amounts received by 1t within
! the year as dividends upon stock Of other
corporations. joint stock companies or as
| sociatlons or insurance companies sub
ject to the tax hereby imposed
| Provided, That in the case of cor
| poration, joint stock company or associ-
alton or insurance company, organized
| under the laws OF a foreign country, such
net income shall be ascertained by de-
| Quoting from the gross amount of it's in
| come from business transacted and capi-
tai invested within the United States and
any of its territories. Alaska and the
| District of Columbia.
| .All the ordinary and necessary ex
penses actually paid within the year out
of earnings in the maintenance and opera
| tion of its business and property within
the United States and its territories,
Alaska and the District of Columbia
| "All losses actually sustained within
| the year In business conducted by 1t
within the United States not compensated
| by insurance or otherw Sc, including n
reasonable allowance for depreciation of
property, If any, and in the case OF in
surance companies the sums required by
law to be carried to premium reserve
fund
Interest actually paid within the year
on its bonded or other Indebtedness to
an amount of such bonded and other in
debtedness not exceeding the proportion
of its paid-up capital stock outstanding
| at the close OF the year. which the gross
amount of its income for the year from
business transacted and capital invested
within the United States and any of its
territories. Alaska and the District Of
Columbia. bears 10 the gross amount of
its income derived from all sources wi hin
and without the United States: