The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-07-02
SENATE ABOUT
READY TO VOTE
ON INCOME TAX
Continued from Page /.

Continued from Page i.
He read extracts from a speech by Sena-
tor Lodge made in 1858 in strong oppOsi-
ton to the corporation tax then proposed
by the Democratic minority.
Senator BOrah charged that the men
who were now advocating the plan OF
submitting the income tax question to
tine states for amendment Of the cOnsti-
tuition would be found against the amend
ment when il reaches their own states.
This charge aroused Mr. Flint of the fl
nance committee who said he would ia
vOr the amendment in California and ex
pressed confidence that the amendment
would carry. He predicted that the cor
poration tax would not be repealed as
Mr.. AldTich had prOphesied.
Mr. Borah declared the people would
have nothing to do with the disposal of
either question, as everything would be
left to Senator Aldrich, who had shown
himself strong enough to prevent the en-
actment of an income tax law when
there was majority in the senate for
that tax
Muck-R aking Plan.
Mr.. Bourne of Oregon predicted the en-
actment of the corporation tax amend
ment into law would result in the public
ity Of corporate affairs and eventually be
much advantage TO the public. The Ques-
ton Of revenue, he said, was secondary.
Senator Root champion of the admin
lStratOn and one OF the authors OF the
amendment, followed Senator Bourne. He
said the first draft Of the corporation tax
amendment was made by the attorney
general on request Of the president. This
draft, in the handwriting of the attorney
general and interlined by the president
himself, was sent to the ways and means
committee, he said. That committee had
preferred the inheritance tax, but where
the senate finance committee had stricken
II out, the corporation tax amendment
had been slightly amended and brought
forth again.
Gentlemen, I may say I am for cor
pOratiOn tax to beat the income tax" said
Mr.. Root. Il am for the corporation tax
because I think it is better policy, better
patriotism and higher wisdom than the
general income tax at this time and under
these circumstances. l wish to beat the
income tax provisions because 1 think
Roots Reasoning.
Advocating the pending provision for a
corporation tax, as opposed to the Bailey
Cummins income tax amendment, Mr.
Root said:
1.-The corporation tax saves all of the
provisions of the income tax that are
excellent and can be enforced. The in
come tax is, TO my mind, unwise, unjust
and unconstitutional, while the cOrpO-
ration tax is wise and Just and cOnsti-
tutiOnaL"
He viewed the income tax as a means
for dislOdging the protective tariff and
declared in his judgment the proposed
income tax would raise from $3.50 000.OG0
to 500 900 900 annually.
Il think" said the New York senator
the United States ought to have the
power to lay and collect income taxes
because I want my country to have the
power to summon every dollar possible to
its relief in times of stress
He said he would advocate the approval
by the legislature of New York for the
proposed constitutional amendment for
that purpose. Replying to Mr.. Bacon, Mr..
Root said those who had considered and
framed the pending corporation tax had
agreed that they could not reach the
bonds of corporations in the hands of
the bOndhOiders and at the same time
frame a law in accordance with the de
cisions of the supreme court.
Easily Dodged.
Mr.. Bacon suggested it would be within
the power of these corporations TO con-
vert their stocks into bonds and thus de
feat the payment of the tax He wished
to know whether that could be prevented.
1t was to avoid that Mr.. Root said, that
the provision was placed in the amend
ment preventing the payment OF interest
on Indebtedness in excess Of the amount
of its capital stock.
Mr. Bacon thought this was not suffi-
Cient as the amount of stock of the cor
porations could often be increased by
mere resolution of board OF directors.
Severely CritiCising the corporation tax
Senator Clapp called attention TO the pres I
dents message, in which he said saw |
lngS banks. ana DuuulnE anu loan assn
Citations should be excepted from the pro-
visions of such a measure.
Denounced by Mr.. CIapp.
The publicity feature of the corpora
ton tax measure, he said. provided only
for honest returns for the purpose of
taxation. It was not framed, he said,
to bring out any secret agreements that
might exist between corporations, and I
was in fact mere myth
Denouncing the corporation tax as a
plan to shift the burden of taxation on
consumers, Mr.. Clapp predicted its early
repeal when the people come to under
stand its real meaning
Interpreting the language Of the con-
stitutiOn relating to the laying of direct
taxes as referring to the states and not |
to individuals. Senator Owen declared |
that this view ought to be considered
by the supreme court. The court, he said,
had never had that Interpretation brought
to its attention, and if it should sustain
that view there would be no question
bout the constitutionality Of an income
tax amendment.