New-York tribune., 1909-03-23
PRESIDENT HAS BILL
TANINT DIVIDENDS
MY URGE CONGRESS- TO
ENACT MEASURE.
TM Probably Submit 1t if Senate
Rejects Pdyne's Inheritance
Tar Precision.

washington. March 22.-The President is so
..- interested in the adoption of some form of
,-,-7a tax that he has gone to the length Of
ling drafted bin taxing the dividends de-
,lared by corporations at the rate Of , per cent.
treasury experts charged with the duty of cal
c7lating the income which such a measure would
reid estimate that it would produce more than
S75oooopo a year. or S5,osH0o00 less than the
;nberitance tax included in the Payne bill. This
is somewhat discouraging to the President. but
he IS not Yet satisfied of the correctness of the
estimates. and will have the subject investi-
gated further
Congress leaders who have consulted the Presi-
dent have been informed that If the Senate re
SOS +re inheritance tax provision they may find
themselves confronted with urgent recon-
s,5ation that some form OF income tax be
,ro,i6ed for presumably that corporation
6,idends. and possibly one on the incomes Of
individuals. The President is satisfied that II
s,ob > tax were made applicable TO all incomes
= would be constitutional
The President has told the leaders Of the Sen
o+e and House that he is heartily in favor OF
,bs maximum and minimum provisions Of the
pa,re hill although he realizes that the section
my -7ouire some minor changes. such as eX-
,e,5f-g discretion 70 the Executive to Ignore IN
-,a Granting Of the minimum rate special agree
Of
.sn, local in effect or non-prejudicial 70 the
trade Of the United States.
Mr. Taft is convinced that the system which
makes the minimum rate the normal and the
maximum the exceptional is the only practical
he system. He points out that when the maxi
-r,,,n rate Is made the normal, and thus goes
ir-o effect As soon as the tariff bill is enacted
,ra-,,fscturers Immediately organize their busl-
-ass M the basis Of the higher rate: that then,
when the time comes put into effect the mini
mum schedules they complain that their busi-
ness cannot stand the reduction. He points out
further that a. long as the minimum rate is IN
existence with any country the rate hXes the
rrfoe NJ the commodity, and therefore during
the interim before the maximum rate Is en-
forced against any country there Is established
10 fictitious scale Of prices. The argument tha1
trade cannot be promoted by retributive meas
1Ires Nj Taft insists is not borne out by the
history Of recent trade Development
Senator Root. when he was Secretary Of state
gave careful consideration to this subject, and
in preparing this section Of his bill Chalrina"
Payne enjoyed the advice OF not only the Presi-
cent but OF AZ. Root as we'll 1t is understood
that these arguments have prevailed with Sen
ste leaders and that beyond the minor changes
indicated the Senate committee will not under
take 10 alter the Payne provision In TACT these
changes may be made in the House. SO thal no
change in the Senate viii be needed
The President Is not concerning himself WITH
individual schedules. He has taken the ground
that they are the problem Of Congress that ne
has abundant troubles Of his own and that LOT
the present he would be most unwlse were nc
to become involved in any controversy over
particular schedules OF specific commodities II
Is his purpose 10 deal with the problems OF the
Executive and leave Congress to work out us
Own salvation. When the tariff bill IS pract-
caly completed ne will, if necessary take
hand either in the way Of indicating that the
rates are too high or that the bill VIII not De
productive Of sufficient revenue. In the latter
event he viii urge the Incorporation OF some au-
ditiouaI form OF taxation as above lndlcaIeu-