New-York tribune., 1909-06-29
TAX MAY BE REDUCED
CORPORATION RATE TO De
PEND ON REVENUE.
Change Not To Be Made in Senate,
but Possible IN Conference
Committee.
from The Tribune Bureau. ]


Washington, June 28.-The amendment pro
viding for tax on the net earnings of cor
porations viii not be amended on the floor Of
the Senate if the plans Of the leaders are car
ried out but it is entirely possible that the rate
of per cent may be decreased in conference,
provided the President approves such decrease.
In all discussion of the proposed tax ? per
cent has been used as a matter g convenience,
although there has never been any deternnina-
ton to fix the tax at that percentage. This fact
was explained in these dispatches 70 The Trib-
of June 16 in which it was said that the
rate will be determined by the estimates now
being prepared as to the revenue such tax
will yield. although per cent has been used in
the discussion merely as a matter of conven-
tence." When the conferrees have completed
their work or the schedules they viii be IN a
position TO determine with considerable accu-
racy the revenue to be expected from the Gus
toms duties, and the estimates of the revenue
from the corporation tax will also be before
them. If the two combined yield only sum
cient to carry on the government. there Will
be no change, but if it is apparent that tax
Of Y or "a, or even I per cent will be ample
to supplement the customs receipts, the reduc-
ton of the rate will be made.
PRESIDENTS VIEWS TO CONTROL
Regarding this question of revenue there has
been some confusion of ideas Senator Aldrlch
has been repeatedly quoted as saying that the
tariff bill as reported TO the Senate, would pro
duce all the revenue necessary TO carry on the
government There have been many reductions
from the rates as reported Moreover it must
be recalled that Mr.. AIdrch qualified his state
nent by saying that probably for two years
there would be 4 steadily diminishing deficit
after which the surplus would be ample 70 make
up the previous shortage IN the opinion OF the
President and many members Of Congress, not
only are Mr. Aldr!chs calculations extremely
optimistic, but it is unwise deliberately TO enact
a revenue measure which will result IN deficit
for the first TWO years, even # that deficit
should be wiped out later That is one reason
why the President considers some form Of spe-
cial taxation highly important. In their estimates
of the revenue which the bill should produce. the
conferrees will be guided by the view of the
President that the bill should produce ample
revenue to meet all expenses the first year after
its enactment
The leaders explain that their purpose in re-
sisting all amendments 10 the amendment is 10
avoid any possibility of rendering 1t unconsu-
tutionaL The amendment as introduced has
been approved by the President, the Attorney
General and the Secretary of State Under these
circumstances the senate leaders entertain nc
doubt whatever regarding the constitutionality
Of the amendment and they declare that they
purpose To take no chances of endangering it by
changing its provisions.
TWO AMENDMENTS OFFERED.
Notwithstanding this determination Of the
leaders two amendments 70 the corporation tax
measure were introduced to-day One by Sen
ator Clapp. strikes out the exemption from taxa
ton Of the amounts received as dividends on
stock of other corporations. etc. This is sup
posed to be the result OF certain criticisms that
because this exemption was made the amend
rnent might be construed as giving legal sane
ton to holding companies. and the further as
sertion that il nullfed the decision Of the Su-
prerne Court in the Northern Securities case
AS has been said. the amendment has received
the approval OF the Secretary OF State, who. as
Attorney General evolved that construction of
the Sherman law under which the Northern Sc
curities case was carried to a successful issue.
and which revivihed that law after it had lain
many years dormant, so that Senators believe
there is no occasion for anxiety on this score
The other amendment was introduced by Sen
ator Culberson, and provides that. in addition 10
the authority conferred on the President 10
make public the results of Investigations into
the affairs of a corporation when he may deem
wise either house Of Congress shall have power
to call for the facts and figures resulting from
such investigation. This also is intended 10
meet certain criticism of the measure. although
it is destined to receive as little serious consid-
Grafton from the leaders the CIapp PROPOSE
ton provided always that the leaders maintain
their present control of the situation.
Az the White House there is the greatest op-
timSn regarding the fate of the corporation tax
amendment and whenever the President finds
a member of either house who seems to have
doubts he suspends other business and endeaV-
ors to convince that member of the virtues and
advisability of the proposed tax. on which he has
set his heart.
Senator AldriCh reported to the Senate to-day
the joint resolution proposing amendment TO
the Constitution. The text of the amendment is
follows:
Article XVI The Congress shall have power
to lay and collect taxes on incomes from what
ever source derived, without apportionment
among the several states and without regard TO
any census enun1era ton
Mr. Aldrich asked that the resolution be i'm
r1ediately adopted. and only withdrew the
quest when Senator Borah indicated that he
desired to debate the question at length Mr.
Aldrich's course disposed of the wholly unfound-
ed report that the Republican leader purposed
to obtain the adoption of the corporation tax and
then break faith with regard to the joint reso-
luton
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