The sun. [volume] (New York [N.Y.]) 1833-1916, 1909-06-15
SUBSTITUTE FOR INCOME TAX
ALDRICH TO OFFER 1T WITH
PRESIDENTS APPROVAL.
1t VIII Place . Tax on Net Incomes Of
Corporations n Provide for Sub.
hitting an Amendment Allowing
Congress to Tax Private incomes.

WASHINGTON. June 14.-After consul
tation with President Taft the Senate
leaders have decided to offer an amend
ment to the pending tariff bill which In
addition to imposing q tax on the in
comes Of corporations available for the
payment OF dividends will provide for
submitting to the States for ratification
q constitutional amendment granting
authority to Congress to enact a law
placing a tar on individual incomes.
The amendment will be reported from
he Committee on Finance and will be
offered al a substitute for the Bailey
Cummins amendment to impose a tax
on individual incomes without waiting
for constitutional emendation to meet
the objections SGT forth by the United
States Supreme Court in its opinion
on the income tax provisions Of the Demo-
cratic tariff law of 1894.
1t was realized by the President and the
Senate leaders that the sentiment In favor
OF an income tax among the Republican
Senators was 40 strong that unless some
concession was made the Bailey Cummins
amendment might be adopted. Some Of
the Republican Senators who believe that
in the absence OF constitutional amend
ment an income tax would be unconstitu-
tional are nevertheless in such a position
on account Of the attitude OF their con-
stituencies. that they will vote for the
Bailey-Cummins amendment II 1t we're
placed before them squarely. They pre-
fer to vote for a proviso that will pave tho
way to amend the Constitution, and 1t
seems TO be assured that enough OF these
Senators will stand with the regular Re-
publicans to obtain the adoption Of the
substitute for submitting the matter to
the States.
President Taft. as Washington des-
patches to THE SIN have said. believes
in the principles Of an income tax but lie
doubtful OF the authority Of Congress. in
view Of the Supreme Court dictum. to
impose this form Of direct taxation until
the Constitution has been amended.
the President IL OF the
opinion. and he 80 informed callers to-
day, that he regarded the taxation OF
Incomes as q proposition
which should be held in reserve for appli-
cation only in the event Of war or some
such great emergency requiring a heavy
in the Governments
To pave the way for the imposition OF an
tax for war or other extraordinary
purposes the President would like the
Of amending the Constitution
to the Legislatures OF the
With such emendation. an in
come tax could be imposed whenever an
emergency justified it.
1t vas the understanding around the
Senate this evening that the proposal for
granting authority In the tariff act for
amending the Constitution came from
the President. The Senate leaders were
20 much in sympathy with the PROPOSE
ton. however. that it is a toss up whether
were not as quick as Mr.. Taft to
amendment to the tariff bill would be a
good thing, even a necessary thing, in the
light Of present conditions in the Senate.
Senator Alirich, chairman Of the Finance
had luncheon with President
Taft to-day. They discussed the PROPOSE
ton TO place a tax on the undivided net
OF corporations and to amend the
Constitution 90 that a tax might DO levied
on individual incomes. Afterward Mr..
Aldrich laid the Presidents views before
his Republican colleagues OF the Finance
and other Senators and found
that conditions were encouraging for the
OF the plan to amend the tarin
bill in the manner outlined.
The Bailey Cummins amendment will
before the Senate on next Friday.
By that time the Finance Committee will
be ready with it's amendment for taxing
OF corporations and changing
the constitution TO permit the imposition
OF a tax on individual incomes. Before
President Taft will have talked
with many Republican Senators. and it
s regarded as probable that some OF
those inclined to vote for IN income tax
will be converted to the Presidents view
that the first step toward that end should
b the adoption Of the proposed amend
ment to the tariff bill to enable the States
to change the Constitution.
Just what the rate OF taxation shall
DO on the incomes Of corporations avail
lble for dividend purposes, or whether
the collection OF this tax shall b limited
10 q specified period had not been dstsr-
mined by those who will decide upon the
terms OF the Finance Committees amend
ment. but everything indicates that the
nts will be 2 per cent. and the period
will be two years.