Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-06-16
President FavOrS
Corporation Tax,

w dSnlHStOn, June l5.-PreSldent Taft
/ tomorrow will send to Congress a mes
sage urging the passage of an amend
ment to the tariff bill imposing a tax Of
per cent. upon the undistributed net
| earnings of corporations and the adop-
| ton of a resolution submitting to the
several states an amendment to the
constitution giving Congress the power
| to impose a tax on incomes. This un-
| derstanding was reached at a session
of the cabinet today and was approved
| by Republicans leaders of the Senate
! who conferred with the President dur
ing the afternoon and evening.
In order that there shall be no ques-
ton that the two propositions to he
| recommended have the support of the
| administration, Attorney General
Wickersham, according to present
plans, will draft both the amendment
ard the resolution. 1t is expected that
the corporation amendment. when in
troduced. will be referred to the COM
mittee on finance. ard that the resolu-
ton submitting the question of amend
ing the constitution, will go to the COM
mittec on Judiciary Doubtless both Of
these committees will report promptly
SO that all of the questions involved
may he disposed Of on Friday when the
pending income tax amendment viii be
taken up.
In view of the emphatic stand taken
by President Taft against a direct tax
on incomes in face of the decision of
the supreme court of the United States
on that subject, and his preference for
the proposed tax upon the earnings OF
corporations, q number of the Progress
sive Republicans having signified their
intentions Of following his recommends
tons At the same time not all OF the
Progressive Republicans are satisfied
with this administrative program. and
it is probable that some of them will
voice vigorous protests. Democratic
senators also arc expected to indulge
in strong criticisms denunciatory or
the tax on corporations as substitute
for q direct tax on incomes.
Not only is the President favorable to
an amendment providing for tax upon
the net earnings OF corporations because
of the added revenue it would product,
but mach more so on account of the fact
that he believes it would bring about a
helpful and healthy degree of publicity
relative to the affairs of the corporations
of the country. This he, as well as many
of his advisors, believe would he re-
form which would produce great satisfac-
ton to the people at large and al the
same time give the business corporations
a standing which otherwise it would DO
impossible for them to attain.
This benefit to the corporations. II IL
urged, would arise from the fact that II
| would in a way stamp upon them the ap-
proval of the national government, ana
sentimentally. If not legally, supply Inc
federal endorsement which 1t Is believer
would not only increase their credit WIFI
domestic investors but with the owhers
of foreign capital
The President is said to be convinced
that if the suggested amendment Is prop
erly drawn it would give the government
access to the books of all corporations
and thus publicity would be assured. sue"
legislation would mean superVlSio.
which. it is contended, would be neip'Ai
to the corporations and satisfying 10 NV
general public. 1t is believed that ',','
publicity would prevent what Is eohSu
cred to be one of the evils of the DAY =.
that it would eliminate the poss'pl"F
of concealed equities and, in the ''"-
gLage of one of the Presidents adVsof''
do away with corporation melon GUY
ting and insure the responsibility
corporation management to the s'o'A7
| holders. ,,,,s
II is understood to be the president
opinion that provisions for the impo,'
ton of such a tax can be framed Oh -"
basis of the internal revenue law So ,a
the government full power to in ves''sa
the books of corporations for the puip ~
! of determining their earnings. ne
believes that such a provision cou'u
| drawn so as to be held by the SUPP,
court to be constitutional. IL Is pe.' -
| the President will recommend t'a' .,,s
| tax should be unlimited as to time 40
| feature is considered essential 10 the IN.
cess of the proposed law in insnrlns ~
,icitv. which has come to be consiuei'o
Of sufficient importance to dwarf ~
the revenue producing element
amendment.