The Washington times., 1909-07-02
Idaho Senator Thinks Pro-
posed Measure Not in
Constitutional Form.
DECLARES 1T WON'T
STAND COURT TEST
Root Defends Wording of Amend
ment-Brandegee Wants In
formation on Subject.

Senator Hepburn of Idaho, threw a
monkey wrench into the cylinder of the
Senate machine this morning by declar-
Ing that certain language used in the
corporation tax measure made that
measure unconstitutional.
He warned the Senate leaders that if
they persisted in the original language
OF the measure it would go down like
a SNOWFALL in the sunshine" His warn
Ing stirred up great commotion among
the constitutional lawyers and there
Has great feast OF oratory touching
on that venerable instrument, the Con-
stitufion. Some vague limitations were
hear6 that, perhaps, the bill was
framed for the purpose Of having it de-
elared unconstitutional Senator Hey
burn disclaimed harboring any such
idea.
~ Senator Hepburn declared the pending
corporation tax measure was as defec-
tive as the old income tax law. He
said 1t contained exactly the same de-
xeets as the old income tax legisla-
ton, and would suffer the same fate.
How It Is Drawn.
He especially pointed out that the
proposed corporation tax is levied with
respect to- the carrying on OF business.
he commended these words We're not
proper legislative words. that they we're
vague aad indefinite and would not
stand the test OF the courts.
These words are absolutely defective
and insufficient" said Senator Hepburn
If the word for were substituted for
with respect to- it would be a great
Improvement"
He also pointed out that the income
from capital invested was to be taxed.
he declared this brought the measure
squarely within the income tax decision
and made the corporation tax amend
ment invalid because the income from
rents would in some cases, be included
as income from capital invested
Senator Root defended the language of
the bill and said il had been chosen be-
cause It was the very language used by
the Supreme Court in considering the in
come tax measure.
Brandegee Wants to Know.
Senator Brandegee Of Connecticut
wanted to know just on what the tax
was being levied; whether il was on
the right TO transact business and
whether it went to the extent Of giving
the Government power 10 prevent q
corporation doing business.
S Senator Carter, Senator Borah, Sena =
Cor Cummins. and others joined in the
discussion Senator Brandegee wanted
to change the language, so that it
would read simply "a special excise tax
equivalent - > per cent on the entire
net income"
Senator Root thought this would
Heaken the bill
Such q change would absolutely de-
'stroy this BILL" said Senator RayneT.
Rsyner In Debate.
Senator Rayner expressed the opinion
that the bill is clearly constitutional.
q Senator Rayner made II clear that he
was in favor. first. Of the income tax
and wanted to vote for it. but he said
II it came to point Of the corporation
tax or no tax at all, he would vote for
the corporation tax.
~ believe IL 10 be absolutely consti-
tutional. said Senator Rayner.
The Maryland Senator then said the
proposed tax was an excise tax. a uni
form tax. did not infringe on the re-
served rights Of the States; that it IS
not a franchise tax, but is a tax laid
on the business privileges of a corpora
ton
I'VE are not taxing the net profits OF
A corporation" said Senator Rayner.
give are taxing the doing business Of
s. corporation"