The Detroit times., 1909-06-18
WILL PROTECT
SMALL INVESTOR
Finance Committee Is Expected To
Exempt From Taxation Corpora
tons Having Limited Earnings.

WASHINGTON, June lS.-Consluer-
able opposition Is being manifested al
ready In the senate TO the Taft AID
rich propositions 10 put tax OF two
percent eh-the net incomes OF all
corporations.
AS q result II is possible that when
the amendment Is reported from the
finance committee II will contain pro-
visions which Will exempt from taxa
ton the incomes or corporations which
do not exceed a certain figure, and
may also exclude from the Operations
of the law the incomes derived from
corporations OF individuals which do
not exceed certain figure. and may
also exclude from the operations OF
the law the incomes derived from cor
porations OF individuals which do not
exceed a certain amount In Other
words. an effort Is to be made TO pro-
tect the small stakeholder and throw
the bunden of the proposed two per
cent tax. small as It is, upon wealth.
One OF the first objections raised
to the plan proposed by Senator Aid
rich and endorsed by President Taft
Is that the pending suggestion Will
affect everybody who has even the
smallest kind Of an interest In a cor
poration or Joint stock company OF
any kind
Depend on Dividends.
Railroads for example. not only In
the east but In the west. count among
their stockholders thousands of people
in very moderate circumstances who
are usually dependent upon the divi-
dends accruing from their stock hold
ings In these roads II Is claimed that
many widows and orphans dependent
upon stock legacies Of corporations.
would find their inmose materially re-
duced on account OF the amount which
the federal government would take oil
the net earnings of the corporations
whose stocks are held in trust for such
Widows and orphans, or Sor' the bene-
At of charitable institutions, a large
part of whose income is derived from
dividends from corporation stock
According to figures obtained today
from the interstate commerce commits
sion, the net earnings OF the railroads
OF the country for the nine months or
the present fiscal year ended March
81 aggregated more than S53O.OOO,O0
which makes an average or about Soo-
600 900 a month. Should the same rate
be maintained, the grand total would
approximate see. 100000 upon which
two per cent tax would yield $4,000
900 or more than half of the amount
which the president estimates should
| be collected from all of the corpora
! lions OF the country.
Senators Borah and Bristow. two or
the most ardent Republican support
ers OF direct income tax. Joined III
statement as to the effect OF the
proposed tax on corporations, as fol-
lows:
"A tax upon the net incomes OF cor
porations alone will very imperfect'y
reach the desired result. II Will tax
tens OF thousands OF stockholders
whose total incomes are very small,
and will exempt In large measures the
immense personal incomes OF the
country.
May Shift Tax Burden.
There Is no reason for exempting
from taxation the vast incomes OF In
dividuals like Carnegie, Rockefeller
and others, very large part OF whose
fortunes do not consist Of corpora
ton stocks.
lions. especially the larger ones. can
in most instances shift the burden OF
the tax on the public. by imposing
upon the people increased charges and
prices"
II is certain that II the plan 70 be
proposed by the finance COMMITTEES
does not contain exemptions 70 cover
the cases Of small corporations and
Joint stock companies, amendments
will be offered on the floor by senators
who object TO the assessment OF taxes
upon the net earnings OF these small
concerns.
Senator Cummins. who, with Bailey,
Is the Joint author OF he pending
amendment for direct income tax.
does not admit that the fight has been
lost. although admitting that the sup
port given by President Taft has great
" strengthened the hands Of Aldrich.