Evening star., 1909-06-30
Senator Cummins Opens At
tack on Corporation Tax.
ITS VALIDITY IN QUESTION
"Contravenes Sacred Principles Of
Governmental Compact
PECULIAR TO ITSELF
Has All the Faults of the General
Income Tax Proposition and
More of Its Own.

Senator Cummins of Iowa, leader of
the republican income-taxers in the Sem
ate. took issue with President Taft on the
floor today over the question of the adop-
ton of the proposed corporation tax
which the President has recommended in
a special message.
He said, while it was the duty of every
senator to carefully consider presidential
recommendations, he did not consider
them as commands. In this instance. he
said he could not agree with the con-
clusions of the President in favor of
the corporation tax.
Mr.. Cummins began his speech late
yesterday afternoon, soon as Senator
Flint of California. who Is to have
charge of the corporation tax amendment
on the floor. had concluded his opening
remarks. 1t was SO late. however, that
the 1owan decided to make new start
this morning.
The issue respecting an income tax has
suddenly changed, declared Senator
CumminS today.
Until within few days the issue was
whether any income tax should be au-
thorized by Congress. 1t now seems to
be what kind of an income tax shall
be adopted. The amendments offered by
the senator from Texas and myself,
which have now been merged into a sin
gle amendment provided for a general
income tax to be paid by all persons
copartnerships and corporations with net
annual earnings in excess of 5000, so
adjusted that the tax would not be laid
upon any person unless he enjoyed such
an income, even though a part of it is
derived from a corporation.
A Fundamental Difference.
The amendment recommended by the
President and offered by the finance
committee provides for special income
tax laid only upon corporations and
measured by their net earnings The
difference between the two plans is fun
damental. and involves the most vital
principle in the authority of any gov
ernment to tax it's citizens and their
property
lieved it to be the duty of senator
to give recommendations of the Presi-
dent careful consideration. he did not
consider such recommendation COM
mand. nor did he believe the President
would want any senator to accept 1t
unless it is in harmony with his own
judgment He felt that he could not
argee with the Presidents conclusions.
Il believe, said Mr. Cummins, that
the special income tax which has been
proposed by the finance committee not
only contravenes the most sacred prin-
c1pleS OF our governmental compact. not
only Overrides the deepest convictions
that civilized man holds with respect to
taxation, but that it collides with the
decision of the Supreme Court, so often
mentioned in this debate. at the same
point and with the same force as does the
general income tax provision which We
in conflict with the Pollock case, but I
believe that it has constitutional
weakness peculiar to itself, and that its
validity is much more doubtful than the
validity of the amendment that we have
Mr.. Cummins suggested that the very
existence of the protective tariff system
would make necessary some other means
OF raising revenue than that now fol-
lowed. The people, he said would not
consent to the excessive duties that would
be necessary to obtain all the revenues
needed from imports.
Some Objectionable Features.
Il do not pretend" said Senator Cum
Minis. that the income tax has not some
Objectionable features, but when you
come to weigh the objections that are
urged against it with the objections that
can properly be brought against any
other form of taxation open to Congress
they will be found to be trivial and
ephemeral. If it has been fairly estab-
lshed that we ought now or in the near
future to resort to some form of taxa
llOl IiOS III" cIlIIOyeO, tHcTc can De II-
tie doubt that we should take incomes
rather than any other kind of property.
whether tangible or intangible. the OBJ
ject of our additional taxation"
Fully analyzing the receipts and expendi-
lures OF the government in recent years
and considering the probable policy that
would be adopted In the near future, the
Iowa senator concluded that If the gov
ernment depends upon its present re-
sources it will have a large deficit in 1911.
As nr3ctical matter he regarded if &c
necessary to find some means for of
setting by a new form of taxation which
would be imposed upon the people best
able to bear 1t.
Mr.. Cummins reviewed many decisions
bearing upon the income tax The
amendments proposed by the finance COM
mittee. he said. were subject to all the
objections from a legal point Of view that
were urged against the income tax pro-
Fosed by him. Reviewing these objections
he said:
Difference in Name.
Il. 1t is tax upon incomes, and the
fact that it brings within its provisions
the incomes of corporations only does
not and cannot change it's character. The
Spreckels case. which / have already men
toned, gives no more support to the
validity of this amendment than to ours
''2. 1t does not change the nature of a
tax to bestow upon 1t different name;
and If a mere name was important or in
fiuential, the tax proposed by our amend
ment could be called an excise tax just
as easily and just as correctly as can that
term be applied to the tax proposed by
the committee.
-. The stroke of pen will make the
tax authorized by our amendment tax
upon the right to receive and enjoy
certain income: and 1t will be as well
described as the tax which the committee
insists upon, when ii is said that it Is
laid upon the net incomes of corporations
with respect to the carrying on of their
business
German Garden Cities.