The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1909-09-22

effect Of the corporation tax.
The president received a most en-
thusiastic welcome IL Denver. Signs
We're hung at intervals all over the
city reading. welcome to Denver, the
Summer Capital"
While here the president is the house
guest of United States Senator
Hughes. democrat. He held pub
lie reception OF two hours this after
noon at the state capitol.
AT the auditorium tonight, after
few preliminary remarks about the ex-
tent and purpose OF his trip through
the west. Mr.. Taft touched briefly on
the tariff. saying that while re-
vision had seemed essential. there was
! also a deficit in the treasury to be
met. This partly will he met by cut
of s4o,0o0.e00 to s50.o0o,0O0 in the ap-
preparations to be made by congress.
and partly by the income from the
new corporation tax law. Mr.. Taft
said he had favored at first an in
heritance tax. but the objection that
/ the states had empted that field
had sufficient weight to defeat the
/ proposition.
/ Income Tax.
The president then continued:
"A part of the republicans and all
Of the democrats of the senate united
in pressing for consideration a gen.
eral income tax on individuals
throughout the United states. The
law was as near as could be made to
that income-tax law which had once
been considered by the supreme court
some 10 years ago. and which was
held to be unconstitutional by vote
of five to four. 1t was conceded that
the tax would probably raise $50. 000.-
900 to 5000. 000 900. which was far in
excess of the needs of the government
IL the tariff bill was to retain its
general form, as proposed. and SO to
produce revenues which should be rea-
7 sonably expected. Our friends the
democrats favored the income tax
with view to substituting II for the
tariff rs an income producing meas
ure. thus minimizing the effect of the
tariff in protecting the industries of
the country.
I'm other words. the passage of the
income-tax bill would have lent sup
port probably to the proposition to
/ have II tariff for revenue only, and
would have interfered with the pro-
tectfve policy To which the republican
party is pledged. One further objec-
I tion to the income-tax amendment
was that ii had been declared uncon-
stituuonal by the supreme court. and
to involve second decision upon that
issue was to question the uniformity
! of the decisions of the supreme court
and to drag the court into IA political
discussion which, whatever it's de-
cision, would not make for its stand
ing as an impartial tribunal before
the people. 1t indicated a diversity
of view between congress and the
! courts-two ordinate branches-with
reference to the constitutionality of
the law which 1t seemed unwise to
perpetuate in Il statute. The income
tax amendment seemed quite likely to
pass by the votes of all the demo-
Gratis and a sufficient number of re-
publicans. Therefore. those who were
opposed to the income-tax amendment
+ looked about to see II compromise
could not be proposed less objection
able than the income-tax amend
ment. which would satisfy enough re-
pubtcans who were inclined to favor
the income tax to prevent the pas
sage of that amendment. Such a COM
/ promise was found in a proposal to
pass the present corporation tax, and
also the joint resolution already re-
ferred To, proposing an amendment of
i the federal constitution to the states
authorizing the general government
3 TO impose an income tax without APP
portionlng 1t as n direct tax according
to the population of the states.
Exemptions.
THE provisions for the corporation
tax in the bill exempt all corporations
whose net income does not exceed
5000. 1t is. therefore. In effect an
income tax; that is. it taxes earnings
actually made. 1t Is a tax upon sue
cess. and not failure.
THE most Objectionable feature of
direct-income tax is the premium
! upon perjury which it offers to those
] who are willing To conceal their in
come. matter lot at all difficult to
do. and who thus subject to a much
heavier proportionate burden those
who are conscientious in making their
returns and who pay their tax as the
law intended. So great vas this evil
in the levy of an income tax In Eng
/ land that when that lax was imposed
directly upon Individuals, rs was pro-
] based here in the so-cillcG income
j tax amendment bill. it Was found
that the proceeds of the tax at 10
per cent were less than the proceeds
Of an income tax af ! per cent inn
posed. as our CORPORATION tax is not
! upon the individuals directly. but
5 upol. the income befoca il comes into
/ their hands.
/ This is practical argument in "a
yar ,f I'll. enrpara iran -inrama fay