New-York tribune., 1909-11-14
NEW TAX REVENUE
TAFToS ESTIMATE LOW
Treasury Erpects se7 100000
from Corporations.
IFrOm The Tribune Bureau. ]

lflolhe ttufcAl
Washington. Nov. I3-lt is the belief Of
Treasury officials that the corporation tax
provision OF the Payne law viii bring 10 the
government an annual revenue Of approx
mately ss7.soOoso None OF this money will
be available for expenditure in the present
fiscal year. but II is understood that in the
estimates for the next fiscal year the cor
pcrsiion tax viii he listed as a producer
OF income exceeding s27.ooo0o0.
IN she course of a week or ten days Sec
retery MacNesgh will make public the reg
ulations for the administration OF this tax.
lie devoted the greater part of his summer
vacation 20 a study of this question. and
believes that the regulations now being
formulated VIII fully answer the question
Of what constitutes the net income OF
corporation. The law attempts 90 dehne
what shall be net income. and 10 this end
provides that various deductions shah he
made from the gross income OF a corpora
ton. The Treasury officials early in their
Investigations found 81 necessary 90 define
gross income. IL was pointed out that there
was a difference between gross receipts and
gross income Accordingly the first prob
lem which presented itself 10 Secretary
MacNeagh was the determination Of what
gross income" In some respects this was
a more difficult question 20 answer than the
question OF what is a corporations net IN
come.
II is learned that about l22.ooo corpora
tions. including Joint stock companies. in
suuanoe companies and banks VIII be re-
o,rired 20 make returns 10 the Treasury
Department on or before March ], 1910. for
the purpose OF enabling the government 10
administer the law. OF course, II is I'M
possible 10 estimate even approximately
how many Of these ooO corporations VIII
be required 10 pay the tax OF ! per cent
This tax is 10 be computed on corpora
lions net income in excess OF S5.ooo year
and is 20 be based on net income for the
present calendar year A corporation whose
books now show a profit Of more than sS'OV0
for the ten and a half months OF this year
might easily meet business reverses in The
remaining month and a half. which would
wipe out its entire profits and make it i'm
rnune 20 the government tax. The tax Is 10
be PAID on or before June 30. 1910.
in his special message 10 Congress on
June lG in which he recommended the en-
actment Of a law for a special excise tax OF
per cent on the net profits OF corporations.
President Taft said he had been Informed
that such a tax would bring into the
Treasury not less than s2S.OJo,000." As the
question was studied by the governments
stat!sticians. IL became apparent that the
Presidents estimate was too low, aid an
the Senate debates IL was predicted that
per cent would yield saO.oO0.ooo annually.
Just before the tax amendment was adopt
ed Senator Aldrich said that the tax would
bring in not less than S5o.ooo.ooo. or even
more. President Taft made IL clear that he
Nas not IN favor OF raising by taxation
more money than was needed by the gov
ernment. and consented that the rate of she
tax should be reduced 10 ! per cent. II
was his desire that about S25Oo0,ca0 should
he raised from this source. and present in
dications are that this win Se close 10 the