Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1909-06-18
CONGRESS Is SENT
MESSAGE BY TAFT
Continued from Page One

Continued from Page One
both houses by a two-thirds vote shall
propose an amendment to the constitution
comforting the power to levy an income
tax upon the national government with
out apportionment among the states in
proportion TO population.
This course Is much to be preferred
to the one proposed of re-enacting a law
once judiciany declared to be unconsti-
tutionaL For the congress TO assume that
the court will reverse itself and to enact
legislation on such an assumption VIII
not strengthen popular confidence In the
stability Of judicial construction of the
constitution. II is much wiser policy
TO accep> he decision and remedy the
defect by amendment in due and regular
course.
ONLY A SUGGESTION.
Again Il is clear that by the enact
ment Of the proposed law, the congress
will not be bringing money into the treas
ury to meet the present deficiency, but
by putting on the statute book law AL
ready there and never repealed. will sim
ply be suggesting TO the executive Of
ffcers of the government their possible
duty to invoke litigation. If the court
should maintain it's former view, no tax
would he collected at all. II 1t should
ultimately reverse itself Still no taxes
would have been collected until after
protracted delay. y
1T is said the difficulty and delay in
securing the approval of tnree-fourths
OF the states will destroy all chance of
adopting the amendment. OF course. no
one can speak with certainty upon this
point but / have become convinced that
a great majority of the people of this
country are in favor of an income tax,
and that they will secure the adoption
Of the amendment in the states, il 3ropOs-
ed to them.
REFERS TO POLLOCK CASE.
Second. The decision in the Pollock case
left power n the national government to
levy an excise tax which accomplished
the same purpose as a corporation income
tax and is free from certain objections
urged to the proposed income tax meas
ure.
Il therefore second an amendment to
the tariff bill imposing upon all corpora
lions and Joint stock companies for pro-
fit. except national banks otherwise tax
ed saving banks. and building and loan
associations, and excise tax measured by
two per cent on the net income of such
corporations. This is an excise tax upon
the privilege Of doing business as an ar
tificial entity and of freedom from gen.
eral partnership liability enjoyed by those
who own the stock.
WOULD MAKE S25.0OO,0 900.
II am informed that 2 per cent tax
OF this character would bring into the
treasury of the United States not less
than S250O0.00o.
The decision of the supreme court in
the case of the Spreckels Sugar Refining
company against McClain Q92 L. S. 800
seems clearly to establish the principle
that such a tax as this Is an excise tax
upon privilege and not a direct tax on
property, and is within the federal pow
er without apportionment according to
population. The tax on net income liz
preferable to one proportionate to a per-
centage OF the gross receipts, because 1t
is a tax upon success and not failure.
1t imposes a burden at the source of the
income at time when the corporation
is we'll able to pay and when collection
is easy.
STILL ANOTHER MERIT.
Another merit of this tax is the fed
I eral supervision which must be exercised
I in order TO make the law effective over
the annual accounts and business trans
actions of all corporations. While the
faculty of assuming a corporate form has
been of the utmost utility in the business
world. 1t is also true that substantially
all of the abuses and all of the evils
which have aroused the public to the
necessity OF reform were made possible
by the use of this very faculty II now,
by a perfectly legitimate and effective
system OF taxation, we are incidentally
able TO possess the government and the
stockholders and the public of the knowl-
edge OF the real business transactions
and the gains and profits of every cor
! poration in the country, we have made
a long step toward that supervisory con-
troll Of corporations which may prevent a
further abuse Of power.
TAFT Recommendation.
II recommend, then. first, the adoption
of joint resolution by two-thirds of both
houses. proposing to the states an amend
ment to the constitution granting to the
federal government the right to levy and
collect an income tax without apportion-
ment among the states according to popu-
lation; and, second, the enactment, as
part of the pending revenue measure.
either as a substitute for, or In addition
TO. the inheritance tax. OF an excise tax
upon all corporations measured by per
cent of the net income. (Signed)
WILLIAM II. TAFT
The White House. July 16. 1907
Taft Calls Cabinet
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