Perth Amboy evening news. [volume] (Perth Amboy, N.J.) 1903-1959, 1909-06-16
TO TAX NET EARNINGS
Corporations Paying Divi-
dends Are Hit by the New
Revenue Raising Plan.
FIGHT IN THE SENATE
Will Pass Resolution to
Amend Constitution To Put
Tax on Big Incomes.
Special by Unsted Press Wire.


Washington, June 16:-In spe-
cial message to congress this after
noon, President Taft recommended
the adoption Of a joint resolution by
two-thirds of both houses proposing
to the states an amendment to the
constitution granting the federal
government the right to levy and
collect an income tax. He also rec
commended the enactment of an ex-
else tax on all corporations.
A special meeting of the cabinet
was held this morning to consider
the message. The conference was
held in the library of the executive
mansion instead of In the cabinet
rooms.
The direct appeal of President Taft
was necessary to secure sufficient votes
with which to defeat the plan to make
the taxing Of incomes a part of the
pending tariff bill
Presidents Message Brief.
The special message is comparatively
brief. dealing only with the two points
Involved. The president sets forth his
views regarding the taxing of corpora
tion earnings He declared that to be
the most satisfactory and feasible plan
for raising additional revenue.
He gives a judicial review of the In
come tax proposition, holding that the
constitution must be amended before
such legislation properly can be enact
ed He sets forth his reasons for that
opinion and mentions the former deci-
sion of the supreme court in the Pol
lock case.
Aid to Healthy Publicity.
Not only does the president favor an
amendment providing for a tax upon
the net earnings of corporations be-
cause Of the added revenue 1t would
produce, but much more so on account
Of the fact that he believes 1t would
bring about a helpful and healthy de-
gree of publicity relative to the affairs
of the corporations of the country.
This, he believes, would be q reform
which would produce great satisfac-
tion to the people at large and at the
same time give the business corpora
tions a standing which otherwise II
would be impossible for them to at
lain.
Committees to Act PromptIy.
Both the finance and judiciary com
mittees Of the senate will take prompt
action in response to the presidents
communication 1t is said they win re.
port the necessary amendment and
resolution with the expectation that
action can be had before the weeks
work is concluded.
The finance committee viii bring In
the amendment providing for tax on
the net earnings Of corporations. This
will be inserted as substitute for the
house paragraph taxing inheritances.
The judiciary committee will bring
in joint resolution providing for the
submission of the constitutional
amendment. This must be adopted by
a two-thirds vote in both the senate
and house. 1t cannot be made an in.
tegral part of the tariff bill, as that
measure requires but a majority vote
for passage.
insurgents Oct In Line.
The presidents appeal Will be used
to conjure away enough votes from
the progressives and Democrats te
make up the needed two-thirds. These
are said to be already In sight
1t is asserted that Senators Curtis
Garter, Bourne, Brown and Piles have
promised to act in accordance with the
presidents wishes, and that Senator
Dixon and other progressives will fol
low this example. 1t is intimated that
the Democrats will unanimously sup
.aart the proposition as being better
thai nothing in the direction of taz
on incomes.