Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-06-23
The Corporation
Two Per Cent. Tax.

Washington, June 22.-Details of the
proposed measure for the taxation of
net earnings of corporations were ar
ranged tonight at the most important
conference that has been held at the
White House since Mr.. Taft assumed
the Presidency
There were present as the Presidents
guests at dinner Attorney General
Wickersham and Senator Root, who are
charged with the task of drafting the
measure. Secretary of State Knox,
Senators Aldrich, Burrows, Penrose,
Hale, Cullom, Flint Smoot, McCumber
and Lodge, constituting the Republi-
can membership of the Senate commit
tee, Speaker Cannon, Rep. Payne,
chairman of the House committee on
ways and means. and Rep. John
Dwight of New York, the Republican
whip of the House.
The statesmen sat down to dinner in
the state dining room at o'clock. No
business was discussed at the dinner,
but for two hours afterward the cor
poration tax measure which had been
prepared in the form of an amendment
to the tariff bill, was viewed from every
angle.
Many changes from the form in
which it was presented were suggested
and not a few of these We're declared
to be wise.
The result was that the carefully pre-
pared copy given to each member of
the party by Attorney General Wicker
sham were returned to him at the end
of the conference.
President Taft himself suggested that
the copies should not be taken by the
members of the party until the amend
ment had been perfected. All agreed
not to make the form of the amendment
public until it is ready to be introduced
in the Senate as a finance committee
amendment to the tariff bill
The bill provides that all corporations
having capital stock and organized for
profit shall pay a tax of 2 per cent up
on their net earnings. Corporations
coming within that designation will be
compelled to make returns to specially
named agents of the bureau of inter
nal revenue of the treasury depart
ment, giving the amount of their gross
receipts, capital stock. bonded indebt-
edness and all other debts Separated
from these returns the corporations
will be compelled to report the amount
of their net receipts after deducting
their general and ordinary running ex-
pences, interest on bonds up to the
amount of the capital stock of the cor
poration, interest on notes and other
forms of tangible Indebtedness, and any
unusual loss that may have been in
Cured in business which loss was not
made up by insurance or other form of
return.
The amendment will define in the
broadest way possible the character of
losses which may be deducted from the
net earnings upon which the tax is to
be collected. This loss will include bad
accounts of a mercantile corporation,
losses upon securities held by banks,
uncollectable notes and all other forms
of bad debts which are usually charged
to profit and loss accounts.
AS has been stated before the per
cent. tax will apply to all corporations
organized for profit but each corporation
will be allowed $1,000 exemption, which
means that the tax will not be collected
except upon earnings in excess of s5OOO
Any corpor htions which make a false
report to an agent of Internal revenue
who has been designated to collect infor-