The citizen. (Honesdale, Pa.) 1908-1914, 1909-06-18

court will reverse itself and to- enact
legislation on such an assumption will
not strengthen popular confidence in
the stability Of judicial construction Of
the constitution. 1t Is much wiser
policy to accept the decision and rem
edy the defect by amendment In due
and regular course.
again, 1t Is clear that by the enact
ment of the proposed law the con.
gress viii not be bringing money into
the treasury to meet tho present de-
aciency, but by putting on the statute
book law already there and never re-
pealed Will simply be suggesting to
tho executive officers Of the govern
ment their possible duty to invoke lit
lgation.
Fears Supreme Court Delay.
"If the court should maintain its
former view, no tax would be collected
ut all If it should ultimately reverse
itself, still no taxes would have been
collected until after protracted delay.
1T is said difficulty and delay In as
suring the approval of threc-fourths of
the states, will destroy all chance Of
adopting the amendment. OF course
no one can speak with certainty upon
this point, but l have become con-
vinced that a great majority Of the
people Of this country are in favor OF
vesting the national government with
power to levy an income tax and that
they will secure the adoption Of the
amendment in the states If proposed
to them.
| Second the decision in the Pollock
case left power in the national gov
ernment to levy an excise tax which
accomplishes the same purpose as
corporation income tax and Is free
from certain objections urged to the
proposed income tax measure.
Expects to Raise $25, 100000.
+ II therefore recommend an amend
ment to the tariff bill imposing upon
all corporations and Joint stock COM
panies for profit, except national banks
| otherwise taxed, savings banks and
building and loan associations, an ex-
else tax measured by per cent on the
net income of each corporation. This is
an excise tax upon the privilege Of do
ing business as an artificial entity and
! Of freedom from Il general partnership
! liability enjoyed by those who own the
! stock.
Il am informed that per cent tax
, of this character would bring into the
treasury Of the United States not less
than $25,0O0,9OO.
The decision of the supreme court
in the case of the Spreckels Sugar Re-
fining company against McClain Q02 L..
S., 300 seems clearly to establish the
principle that such tax as this is an
excise tax upon privilege and not a
direct tax on property and is within
the federal power without apportiOn-
mcnt according to population.
The tax on net income is preferable
to one prOportiOnate to percentage
of the gross receipts because it is a
tax upon success and not failure. 1t
imposes Il burden at the source of the
income ut II time when the corpora.
tion is well able to pay and when col.
lection is easy.
Benefits of Publicity.
Another merit of this tax is the fed
eral supervision which must he eXer
cised in order to make the law effec
tive over the annual accounts and busi
ness transactions of all corporations
While the faculty of assuming a cor
porate form has been of the utmost
utility in the business world, it is also
true that substantially all of the abuses
and all of the evils which have aroused
the public to the necessity Of reform
were made possible by the use of this
very faculty.
"If now by a perfectly Legitimate
and effective system of taxation We
are incidentally able to possess the
government and the stockholders ant
the public Of the knowledge of the rea
business transactions and the gains
and profits of every corporation in the
country, we have made long step to
ward that supervisory control of cor
porations which may prevent a fur
ther abuse of power.
81 recommend, then, first, the adop
ton Of joint resolution by two-third'
of both houses proposing to the state!
an amendment to the constitution
granting to the federal government
the right to levy and collect an income
tax without apportionment among thu
states according to population, and
second, the enactment as part Of thu
; pending revenue measure, either as {
substitute for or In addition to the in
heritance tax, of an excise tax upol
all corporations measured by PEI
cent of their net income.
WILLIAM H. TAET.
'"The White House, June 16, 1909"
Aldrieh Acts Quickly.
? Senator Aldrich called a meeting o.
, the committee on finance to conside
! both of the propositions in the presi
dents message.
In a series Of roll calls the senat
rejected all proposed amendments t
the Philippine paragraph in the pend
ing tariff bill except that proposed b
: the finance committee.