The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-06-22
TAFT WATCHES IT.
President Gives Personal Supervision
to Corporation Tax Amendment.

Washington, June 22.-President
Taft will personally supervise putting
the finishing touches upon the propos-
ed amendment to the tariff bill pro-
viding for the imposition of a two per
cent tax upon the net earnings of cor
porations. This will be done at
conference at the White House. There
VIII be present Attorney General
Wickersham and Senator Root who
are drafting the amendment, Secre-
tary Knox and Senators Aldrich, Bur-
rows, Penrose, Hale, Cullom, McCum-
Der, Smoot and Flint, constituting the
republican membership of the finance
committee The draft prepared by
Messrs. Wickersham and Root will be
discussed at the conference. Such
changes as are agreed upon will be
made by the attorney general on
Wednesday, and it is expected the
perfected amendment will be ready
for Introduction in the Senate on
Thursday.
The attorney general and Mr.. Root
had long discussion at the capitol
and reached an agreement on pracu-
caily every feature of the corporation
tax plan. The portion which has been
giving them the greatest trouble re-
1ateS to the government control of
corporations necessary to carry the
law into successful operation.
There has been no little opposition
to subjecting the corporations to the
amount of publicity that. will be re-
quired for the enforcement of the law
and to prevent manipulation of stocks
and bonds for the purposes of eva
sion.
Members of the finance committee
as well as Mr.. Root and Mr.. Wicker
sham agree with President Taft that
such publicity must be given and that
without it the law would be failure.
This feature, it was said, certainly
will be incorporated in the amend
ment. The authors Of the draft are
experiencing difficulty in finding an
effective way of reaching the situa-
ton.
Among the details of the bill de-
termined are that the tax to be levied
will be at the rate of two per cent,
and that it will be collected from all
corporations. All banks will come
within the range of the tax bill and
deductions will be allowed national
banks to the amount of taxes paid
upon their circulation. An important
provision to be included in the bill is
a definition of net earnings. This
will follow as nearly as possible the
definition of earnings collected in the
interstate commerce act relating to
railroad corporations
Mr.. Taft is decidedly optimistic ov-
er the outlook for his corporation tax
but a number of senators who called
at the White House declared the
proposition would keep the senate in
|
ator E1kins was one of the callers. He
believes all corporations would at
| tempt to avoid payment of the tax.
| Additional salaries and all manner of
| expenditures would be resorted to, he
| thinks.
! President Taft, on the other hand,
| does not believe two per cent tax on
| net earnings is heavy enough to make
| any of the larger corporations resort
| to evasive measures. Some provision
may be made as to the issuance of
| bonds in the future to provide that
| the interest shall be paid only from
net earnings. The right to impose
such a tax has been distinctly upheld
| in a case before the supreme court
that of Spreckels against the United
States. The collection of the corpora
ton tax would be under the direction
of the internal revenue bureau.