Evening star., 1909-04-21
FOR GRADUATED RATE
Cummins Introduces Income
Tax Measure in Senate. l
TO AMEND TARIFF BILL
Imposition Upon individuals and
Not on Corporations.
DEFENDS HIS REPUBLICANISM
Disavows Any Intention to Assail
the Protection Policy Of
His Party.
DEFENDS HIS REPUBLICANISM

Senator Cummins today introduced
his amendment to the Payne-Aldrich
tariff bill. providing for a graduated in
come tax.
In presenting his amendment Mr..
Cummins said that IL any tax were lev
led on corporations it would be extreme
ly difficult to classify the corporations
to meet the requirements OF the Consti-
tuition. He declared that a graduated
income tax on corporations would result
in great corporations paying the high
est rate. although their stock might be
largely held by men OF small means.
In that way the result might be to place
the highest tax on men OF small in
comes.
"Such a result" said Mr.. Cummins.
would not only be unjust, but IL would
destroy the essential principle that un-
derlies the income duty"
Mr.. Cummins said he recognized that
his amendment challenged the opinion
Of the Supreme Court OF the United
States on the law of 1894 in respect to
the constitutional requirement regard
ing direct taxation. and he believed Ii
would be impossible to frame an income
tax law that would not antagonize that
opinion.
"If," he added. that opinion is to
stand in its full scope. then the United
States must abandon for all time. or un-
til the Constitution is amended. the ex-
ercise Of power and authority which had
been recognized for 100 years before tne
opinion was announced.
Distinguishing Features.
Explaining the provision Of his amend.
ment, Mr.. Cummins pointed out that
differs in some important particulars
from either the law of 1894 or the amend
ment offered by eSnator Bailey. 1t ex-
empts incomes below 5000. and au-
thorizes the deduction of that amount
from every dutiable income. Tho rate
provided for is as follows:
Upon incomes not exceeding $4,000.
per cent; upon incomes not exceeding
1 so, 600. 211 per cent: upon incomes not
exceeding $4,000. 3 per cent: upon in
comes not exceeding 10000. 3h per cent:
upon incomes not exceeding $4,000.
per cent; upon incomes not exceeding
500. 900. per cent: upon all incomes ex-
ceeding 100000. 6 per cent"
Mr.. Cummins believes that the grad
uated tax so provided for will produce
somewhat less revenue than q nat tax OF
3 per cent and Is of the opinion that the
amount raised under his amendment
would be about forty millions Of dollars.
Only individuals Taxed.
Another point Of difference is that the
duty is to be levied only upon individual t,
incomes. He treats corporations as mere
instrumentalities for individual profit. and
the chief reason for not including cor
porations is that to put a tax upon the
incomes Of corporations is to tax those
who are stockholders of the corporations.
but whose total incomes would not reach
(, aiCn1 ac l.
able incomes. This would be the result
with fiat rate; but he points out that
when the graduated tax is employed Ii Is
obvious that the individual income can
alone be considered: otherwise" he says,
1.-The man with the lowest dutiable income
would. in so far as 1t is derived from
corporation, oftentimes bear the max
imum rate levied upon the highest in
comes.
Object of Graduated Tax.
THE chief object OF graduated income
tax law is to put the burden of govern
ment upon those who are best able to
bear it; and to do SO 1t is necessary 10
put a higher rate upon large incomes
than upon small ones. There is no ad-
vantage in putting in corporate incomes.
because under the law of 1894. as we'll as
the Bailey amendment, the Individual mas
the right 10 deduct from his general in
come amounts received as dividends from
a corporation if the corporation pays an
income tax
minis further provides that all corpora
tions shall make annual reports. showing
their gross and net earnings ana the
amounts paid as interest and dividends.
and the persons to whom payments are
made and also the names Of all ofi1cers
or employees receiving 5000 per year or
more In this way the undivided profits
of corporation are ascertained and the
Oh, nf oNI ctr
charged a part Of his income.
Not Attack on Protection.
Senator Cummins followed his explana-
ton with a statement of his own atti-
tude toward the pending tariff bill which
attracted the attention Of the Senate and
held the interest of senators on both sides
of the chamber.
Senator Cummins repudiated in the most
vigorous manner the suggestion that his
amendment was an, insidious attack upon
the protective tariff. He declared HIM
self to be a stanch republican and dis
avowed any intention TO assail the policy
of his party.
The senator said he found when he came
to the Senate that he was under some
suspicion as to his soundness on the pro-
tective tariff policy.
If | am TO be Judged Senator Cum
Minis passionately declared. .hy the stand
ara OF lildI aggregation Oh SelHSnneSS ana
SANDER known the Protective Tariff
League. ] am unsound on the tariff: but
If | am to be judged by the standard
of the republican platform and of the
attitude of Mckinley. Garfield and Blaine.
am as good a republican on the tariff
can be found"
The senator went on to say that he was
not in favor OF an income tax for the
purpose of destroying the system of pro-
lection.
IF it is true that a tariff law can he
framed to meet the needs of the govern
ment with its revenues" he continued. II
will abandon my proposition for in
come tax. If the revenue derived frcm
such tax is not needed there ought to be
an end of the discussion. Ii Senator AL
drich's conclusions as to the amount OF
revenue to be derived from the tariff bill
are correct il would be an economic
crime to impose an income tax"
Not Property of Any Party.
Senator Cummins declared that the prin-
ciple of the income tax could not be
claimed by any political party, but was
an economic principle of long standing.
and that it had been applied most effec-
lively by republican administration i'm
time of war. He held that the demands