Twice-a-week plain dealer. (Cresco, Howard County, Iowa) 1895-1913, 1909-07-02
MAY CHI TAX ON
CORPORATIONS
TALKS AMONG SENATORS OF RE.
DuclNG PER CENT OF LEVY
ONE-HALF.
NO OTHER AMENDME Mt ALLOWED
Taft Wants Revenues Bolstered From
Start.-Senator Aidrich's Scheme
to Allow Deficit to Disappear
Gradually Is Opposed.


ment providing for = tax on the net
earnings Of corporations will not be
amended on the floor of the senate If
the plans of the leaders are carried
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
of convenience, although there has
never been any determination to fix
the tax at that percentage.
When the conferees have completed
their work on the schedules they will
be in a position to determine with
considerable accuracy the revenue to
be expected from the custom duties,
and the estimates of the revenue from
the corporation tax also will be before
them. If the two combined yield only
sufficient to carry on the government,
there will be no change. but if it is
apparent that a tax of IN or IL, or
even l per cent will be ample to sup
plement the customs receipts, the re-
duction of the rate will be made.
Confusion Over Revenues.
Regarding this question of revenue
there has been some confusion Of
IDEAS
Senator Aldrich has been repeatedly
quoted as saying that the tariff bill,
as reported to the senate, would pro-
duce all the revenue necessary to car
ry on the government, but Aldrich
qualified his statement by saying that
probably for two years there would be
steadily diminishing deficit, after
which the surplus would be ample to
make up the previous shortage. In
the opinion of the president and many
members of congress, not only are Mr..
Aldrich's calculations extremely opti-
mistic, but 1t is unWise deliberately to
enact revenue measure which will
result in deficit for the first two
years, even if that deficit should be
wiped out later That is one reason
why the president considers some
form of special taxation highly import.
ant In their estimates of the revenue,
which the bill should produce, the con-
ferees will be guided by the view of
the president that the bill should pro-
duce ample revenue to meet all ex-
penses the first ypear after its enact
ment.
Scrutinize Clapp Amendment.
The leaders explain that their pur-
pose in resisting all amendments to
the amendment is to avoid any posi-
bility of rendering its demonstrations
al 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 no doubt
whatever regarding the constitutional
ity of the amendment, and they de-
clare that they purpose to take no
chances endnngering it by changing
its provisions
This means that proposed amend
ment offered yesterday by Senator
Clapp, of Minnesota, including in the
operation Of the tax those who derive
their incomes from investments in
other corporations, will be scrutini1ed
very carefully not only by the mem
bers of the finance committee, but by
the president, the attorney general and
Secretary Root. 1t will be defeated
unless these gentlemen place their
ok" upon it.
Clapp Explains His Scheme.
Senator Clapp's amendment strikes
out the provisions carried In the Aid
rich amendment. exempting from tax
alton such part of the dividends of cor
porations as arise from investments
in other companies.
The argument of the advocates OF
this exemption is that 1t subjects these
incomes to double taxation" said Sen
ator Clapp. Il do not agree with
those senators, however, to the extent
of calling this measure an income tar
proposition. 1t is an excise tax, pure
and simple. and is to be levied on these
companies for the privilege of being
corporation.
Earnings from investments in 9th
er companies should not be exempted
and have therefore proposed to strike
out that provision Of Mr. Aldrich's
amendment"
There was no discussion whom Sen
ator Clapp presented his amendment
but he will submit some remarks OF
the question in the course of the de
bate
SLIIN MoMEM. cuIh,CoE cnIor