Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-06-16
president URGES
TWO TAX MEASURES
TAFT SENDS MESSAGE TO CON-
eREss URGING TAX ON COR.
PoRArE EARNINGS.
ALSO WANTS AMENDMENT
PERMITTING INCOME TAX
Mildly Suggests to the Senate That It
is Trying to Enact Law Already De-
eIared Unconstitutional - President
Takes Emphatic Stand for Revenue
Reforms.

Reforms.
Washington, June 16.- President
Taft this afternoon sent the following
message to congress on the subject of
tax on the net earnings Of corpora
tions and an income tax amendment
to the constitution.
1T is the constitutional duty Of the
president from time to time to recon-
mend to the consideration Of congress
such measures as he shall judge neces-
sary and expedient. In my inaugural
address, Immediately preceding this
present extraordinary session Of con-
gress, invited attention to the neces-
sity for a revision Of the tariff at this
session, and stated the principles upon
which I thought revision should be ef-
fected. I referred to the then rapidly
increasing deficit, pointed out the obli-
cation on the part of the trainers of
the tariff bill to arrange the duty so
as to secure an adequate income, and
suggested that If it were not possible
to do so by import duties. new kinds
Of taxation must be adopted. Among
them recommended graduated in
heritance tax as correct in principle
and as certain and easy Of collection.
The house OF representatives has
adopted the suggestion, and has pro-
vided in the bill 1t passed for the coll
lection Of such a tax.
Tho Senate's Position.
I'm the senate, the action OF It's
finance committee and the course of
the debate indicate it may not agree
to this provision. and 1t is now pro-
posed to make up the deficit by the
imposition Of a general income tax in
the form and substance of almost ex-
actly the same character as that which
was held In the decision by the SUI
preme court to be direct tax, and
| therefore not within the power Of the
federal government to impose unless
apportioned among the several states
according to population. This new
proposal, which did not discuss in
my inaugural address or In my mes
sage at the opening of the present ses-
sion, makes it appropriate for me to
submit to congress certain additional
recommendation.
The decision Of the supreme court in
the income tax cases has deprived the
national government of the power
which, by reason Of previous decisions
of the court, 1t was generally sup
posed the government had. 1t is un-
doubtedly a power the national gov
ernment ought to have 1t might be
indispensable 40 the nations life in
great crises, altho have considered
a constitutional amendment as neces-
sary to the exercise Of certain phases
Of this power Mature consideration
has satisfied me the amendment is the
only proper course for its establish
ment to its full extent
Urges Constitutional Amendment.
Il, therefore, recommend to congress
that both houses. by two-t thirds vote,
shall propose an amendment to the
constitution comforting power to levy
an income tax upon the national gov
ernment without apportionment among
the states in proportion to population.
This course is much to be preferred to
the one proposed Of re-enacting law
once judicially declared unconstitu-
tional. For congress to assume that
the court will reverse itself and to en-
act legislation upon such assumption,
will not strengthen popular confidence
in the stability and judicial construc-
tion Of the constitution.
Simply Invites Litigation.
ut is a much wiser policy to accept
the decision and remedy the defect by
amendment in due and regular course
Again, 1t is clear that by the enact
ment of the proposed law, congress will
not be bringing money into the treas
ury to meet the present dficiency, but
by putting on the statute books al
ready there and never repealed, will
simply be suggesting to the executive
officers Of the government their possi-
BILE duty to invoke litigation. II the
court should maintain its former view
no tax would be collected at all. II II
should ultimately reverse itself, still no
taxes would have been collected until
after a protracted delay
TT is said the difficulty and delay in
securing the approval OF three-fourths
OF states will destroy all chances OF
adopting the amendment. OF course, no
one can speak with certainty upon this
point, but have become convinced
that great majority OF the peopiie uf
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 amndmant
by states. II proposed to them,
Wants Tax on Corporations.
The second decision in the Pollock
case left power in the national govern
ment to levy an excise tax, which ac-
complished the same purpose as cor
poration income tax, and is free from
certain objections urged to the pro-
posed income tax measure. therefore
recommend an amendment to the tariff
bill imposing upon all corporations and
Joint stock companies for proft, except
national banks, which are o4hsewise
taxed. savings banks and buildtnr and
loan associations, an excise tax meas
ured by two per cent on the net income
of such corporations. This ds On sx-
else tax upon the privilege oe dotns
business - an artfflcial entity and 81
freedom from general partnerstip ia :
bility enjoyed by those who own
lstock ! am informed that q 2 Per c6ni