Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1909-06-17
TAFT URGES AN
EARNINGS TAX
President Sends Special Message to
Congress Favoring Levy on Cor
porations.
WOULD AMEND CONSTITUTION
Thinks Federal Government Should
Have Income Tax Authority.
BUT IT HASN'T GOT IT NOW
Executive Reported to Be Confident
Of Downward Revision.
FIRST STRICTLY PARTY VOTE
on Motion to Instruct Finance Conn
mittee, Democrats All Vote In
Affirmative and Republicans
In Negative. ,>t
Executive Reported to Be Confident
of Downward Revision.
FIRST STRICTLY PARTY VOTE

! WASHINGTON. June 16.-Recommendlng
I legislation leading to the placing OF
| per cent tax on the net income Of corpora
tons and also the adoption of an amend
ment to the constitution providing for the
| imposition of an income tax without an
apportionment among the several states,
President Taft today sent to congress
message embodylng his views on the sub
ject. This action followed protracted
special meeting of the cabinet
President Taft, is was announced later
In the day. is highly gratited over the out
look. 1t is said that he regards the
prospects for tariff revision downward
as being brighter than ever.
| In his message the president speaks of
the apparent inability Of congress to agree
to an Inheritance tax, and as regards an
! income tax he refers to the decision OF the
| supreme court in the case of Pollock
against the Farmers Loan and Trust com
pany, in which the court held the tax to be
unconstitutional unless apportioned accord
! ing to population. 1T is says the presi-
dent, undoubtedly power which the gov
ernment ought to have. 1t might be indis-
pensible to the nations life In great crises"
The amendment, therefore, he declares,
was the only proper course. Such an
amendment to the constitution, he contends,
was preferable to the one proposed of re-
viving a law judicially declared to be un.
constitutional.
Big Revenue from Tax.
The amendment which he says should be
made to the tariff bill, provides for the
imposition on all corporations and joint
stock companies for profit, except national
bank otherwise taxed), savings banks and
building and loan associations of an excise
tax of 2 per cent on the net income Of said
corporations. This IL is estimated by
him, will bring an annual revenue of $685.
900 900. This is tax on privilege and not
on property" he says, "and is within the
federal power without apportionment ac'
cording TO population"
The president point out that another
merit to the tax on corporations Is the fed
eral supervision which win give to the
government the stockholders and the pub.
lie knowledge of the real business trans.
actions and the gains and profits of every Z
| corporation in the country. The adoption
of the amendment, he says, will make
long step toward that supervisory control
of corporations which may prevent a fur
ther abuse of power"
Reception of Message.
When the message reached the senate
Mr. Root, who was in the chair, made the
customary reference of the document to
the committee finance and Mr Hepburn
secured the floor and began speech ON
another subject
Senator Gore broke in and attempted to
have the committee instructed to report
on the income tax feature of the move
ment by next Friday when, under general
agreement, the income tax question is
again to be taken up for consideration. His
motion was however, voted down and for
! the first time In many weeks the division
was strictly along party lines, all the re-
publicans voting to lay on the table, while
all she democrats cast their votes against
that proposition.
Senator Bailey gave notice that he would
demand that provision be made for 4
graduation of any income tax that might
be provided for and intimated that much
time would be necessary to get through a
provision, which did not carry that quail
fication
Text OF the Message.
The text of the presidents message is
as follows
ITO the Senate and House OF Represen-
tatives 1t is the constitutional duty Of
the president from time to time to recon-
mend to the consideration OF congress such
measures as he shall judge necessary and
expedient. In my inaugural address. i'm
mediately preceding this present extraor-
dinary session of congress. 1 invited at
tention to the necessity for a revision of
the tariff at this session and stated the
principles upon which 1 thought the re-
vision should be effected. l referred to the
then rapidly increasing deficit and pointed
out the obligation on the part Of the franz
ers OF the tariff bill to arrange the duty
so as to secure an adequate income and
suggested that IL It was not possible TO do
so by import duties. new kinds OF taxation
must be adopted, and among them recon-
mended graduated Inheritance tax as cor
rect in principle and as certain and easy
of collection. The house of representatives
has adopted the suggestion and has pro-
yided in the bill it has passed for the col
lection of such tax.
In the senate the action OF it's finance
committee and the course Of the debate
Indicate that 1t may not agree to this pro-
vision. and it is now proposed to make up
the deficit by the imposition OF a general
income tax in form and substance Of al
most exactly the same character that
which in the case OF Polack against
Farmers Loan and Trust company Q57 u.
5. 429) was held by the supreme court to De
a direct tax, and therefore not within the
power OF the federal government TO impose
unless apportioned among the several
states according TO population. This new
proposal, which l did not discuss in my in
augural address or I'm my message to the
opening Of the present session makes'It ap-
propriate for me 10 submit 10 the congress
certain additional recommendations.
FavOrs Income Tax Amendment.
'"rhe decision OF the supreme court in
the income tax cases depriyes the national
government OF a power which by reason
OF previous decisions OF the court ii was
generally supposed the government has.
/ II is undoubtedly a power the national
] gnvernment ought To haYa. IL n lndisnen-