Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1909-06-21
WASHINGTON LETTER
TAFT Corporation TAX PLAN
CATCHES FAVOR.
AiCriCh willing to Accept 1t in Order
to- Dodge Income Tax. A Two
Edged Scheme. will Enable Gov
ernment to Examine Books of Cor
porations and Prevent Watering.
Special to The Herald.

Special to The Herald.
WASHINGTON, D. c., June H.
President Taft's plan to tax dividends
of corporations has suddenly loomed
up as the biggest thing of the extra
session of Congress. Originally sug-
gested by the president as a compro-
mise to avoid an income tax, it is
now found to be full of enormous pos
sibilities, including the busting Of
Trusts galore, the publication of
Wall street, the letting of water out
of over-saturated corporate concerns
into the innermost secrets of all busi-
ness concerns
Nobody paid much attention to
the Presidents suggestion when it
was made, and it seemed that it was
going to be forgotten until there sud-
denly developed desperate need in
the Aldrich camp for ammunition
with which to combat the income tax
proposition. Aldrich came to the
very reluctant realization that he
was going to be licked on the in
that something had to be done about
it, and quickly.
The Presidents Chance.
| Here was the Presidents chance,
and couple of days ago he again
made his dividend tax suggestion to
Aldrich. This time Aldrich practi-
cally decided to accept it and to in
corporate it in the tariff bill in order
to take the wind out of the sails of
the income tax people.
CCincidental with the decision of
A;drich to put the Presidents S plan in
the bill comes announcement of the
discovery that the dividend tax will
be Il Two edgc0 sword
At first Mr. Taft intended that .ha
tax should 6e levied merely on diyi-
dends actually and publicly declared.
1t was pointed out to him that 1t
would be easy for corporations to
dodge around this law, and then it
was decided to place the tax on
earnings or corporations available
for dividend purposes"
Then arose the question as to how
such earnings were to be ascertained,
and the only way found was for the
Government bOokkeepers to examine
the books of all corporations. There,
accidentally discovered, Mr.. Taft be-
lieved was the solution of the prob
lem Of Federal supervision that has
bothered SO many Presidents. And he
he is gleeful about it as if he had
beaten Travis at golf.
A Pill for Aldrich
Aldrich doesn't like any kind of
law aimed at corporations, but he is
up against it, on the income tax
question, and therefore will accept
the Taft plan, as, in his mind, the
lesser of two evils.
If the Taft plan prevails, no cor
poratiOn will escape it, The suggest
ed exception of 100000 or $780,
900 is eliminated and every penny of
money earned beyond the payment of
running expenses is given the low
tax. The proposed exception would
have passed by large number of
smaller manufacturing concerns, the
net earnings of which do not ex-
ceed the limit of 100000 as a
maximum. The change would leave
the burden for every corporation,
great and small.
President Taft is also interesting
himself now more actively in the
matter of the traiff He is letting
it be known that he expects to have
something of a voice in the matter
when the conference stage is reached.
Hopes for Reductions.
President Taft expects that when
the Tariff bill goes into conference
it will be SO framed that the lowest
rates of the Payne bill and the lowest
rates of theAldrich bill will be used.
There is a contention that the con-
, ference committee cannot go outside
the limits set by the House and the
Senate. o.. the other hand, many
. of the best parliamentarians of both
; houses insist that when the two
houses have disagreed the conference
committee can consider the particu-
| lar schedule as though no figures ever
had been set.