Watertown leader. [volume] (Watertown, Jefferson County, Wis.) 1909-1911, 1909-06-18
TAFT WANTS
CORPORATIONS
INCOME Taxed
ALSO ASKS TO HAVE QUESTION CT
RIGHT TO ASSESS INCOMES
SUBMITTED TO STATES.
MEANS FEDERAL CONTROL.
President Declares All Abuses Can Be
Corrected by Method Which
He Proposes.
MEANS FEDERAL CONTROL.
WILL RAISE $25,ooo,ooo REVENUE,

WASHINGTON, d. G., June 10
Recommending legislation looking to the
placing Cf per cent. tax OH the net
income of corporations and also the
adoption of IN amendment TO the CON
stitution providing for the imposition
of an income tax without an opportion
ment among the several states, President
Taft today sent to Congress q message
embodying his views OH the subject.
This action followed a protracted spe
cial meeting 0f the cabinet.
In his message the President speaks Of
the apparent inability of Congress 10
agree to an Inheritance tax, and as re-
CARDS an income tax, he refers to the de
cision of the supreme court in the case
Of Pollock VS.. the Farmers Loan and
Trust company, i'll which the court held
the tax to be unconstitutional unless
apportiOned according to population.
1t is says the President, ''undoubt-
eddy Il power which the government
ought to have. 1t might be indiSpensa
BILE to the nations life i'll great crises"
The amendment, therefore, he declares,
was the only proper course. Such an
amendment to the constitution, he con-
tended, was preferable to the one pro-
posed of reyiving a law judicially de-
clared to be unconstitutional.
The amendment which he proposes
should be made to the tariff bill provides
for the imposition upon all corporations
and Joint stock companies for profit,
except national banks otherwise taxed,
savings banks, and building and loan
associations of an excise tax of 2 per
cent. of the net income of said corpora
tiOns. This, as estimated by him, will
bring an annual revenue of $50, 100000.
This is Il tax on privilege and not on
property he says, land is within the
federal power without apportonment ac-
cOrding 20 population"
The President points out that another
merit to the tax on corporations is the
federal supervision which will give to
the government, the stockholders and the
public knowledge of the real business
transactions and the gains and profits of
every corporation in the country. The
adoption of the amendment, he says, will
make Il long step toward that super
yisory control of corporations which
may prevent further abuse Of power"
Text of Message
The text of the Presidents message
is as follows:
ITO the Senate and House of Repre-
sentatives: 1t is the constitutional duty
of the President from time to time to
gress such measures as he shall judge
necessary and eXpedient. In my in
augural address, Immediately preceding
this present extraordinary session of
Congress, | invited attention to the
necessity for a revision of the tariff at
this session and stated the principles
upon which l thought the revision should
be offered. | referred to the then rap
idly increasing deficit and pointed out
the obligation on the part of the trainers
of the tariff bill to arrange the duty so
as to secure an adequate income, and
suggested that if it was not possible to
do so by import duties, new kinds of
taxation must be adopted, and among
them | recommended Il graduated in
heritance tax as correct in principle and
as certain and easy of collection.
THE House of Representatives has
adopted the suggestion and has provided
in the bill it passed for the collection of
such = tax In the Senate, the action
of its finance committee and the course
of the debate indicate that it may not
agree to this provision, and 1t Is now
proposed TO make up the deficit by the
imposition OF Il general income tax i'll
form and substance of almost exactly
the same character as that which in the
case Of Pollock versus Farmers Loan
and Trust company (101 L. :. 429). was
held by the supreme court to be Il direct
tax and therefore not within the power
of the federal government to impose I'M
less apportioned among the several states
according to population. This new pro
posaI, which I did not discuss in my
inaugural address or in my message at
the opening of the present session, makes
it appropriate for me to submit to the
Congress certain additional recommended
tons.
Regrets Court Decision.
THE decision of the supreme court in
the income tax cases deprived the IA
tional government of a power which by
reason of previous decisions of the court
it was generally supposed the govern
ment had 1t is undoubtedly a power
the national government ought to have
1t might be Indispensable to the nations
life i'll great cities Although ] have not
considered constitutional amendment
as necessary to the exercise of certain
phases of this power, a mature consider
alton has satisfied me that an amend
ment is the only proper course for its
establishment to Its full extent. | there
fore recommend to the Congress that
both houses, by Il twO-thirds vote. shall
propose an amendment to the consttu-
ton comforting the power to levy an
income tax upon the national govern
ment without apporti0nment among the
state in proportion TO population.
This course is much TO be preferred
to the enc proposed of re-enacting law
once .judicially declared TO be unconsti-
tutional. For the Congress to assume
that the court will reverse itself. and to
enact legislation on such an assumption.
will not strengthen popular confidence
in the stability of judicial construction
of the constitution. 1t is much wiser
policy 80 accept the decision and rem
edy the defect by amendment liz due
and regular course.
Difficulties to Overcome.
Again, it is clear that by the enact
ment of the proposed law, the Congress
will not be bringing money into the