Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-06-17
THE PRESIDENTS MESSAGE.
CONTINUED from Page One.)

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 tnis
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 ! thought the revision should be
effected l referred to the rapidly in.
creasing deficit and pointed out the OBJ
legation on the part of the trainers or
the tariff bill to arrange the duty SO
as to secure an adequate income and
suggested that if it was not possible
to do so by import duties, new kinds
of taxation must be adopted and
among them l recommended gradual
ed inheritance tax as correct in prin-
ciple and as certain and easy of cOllec-
ton.
The House of Representatives has
adopted the suggestion and has pro-
vided in the bill it passed for the col
lection of such a tax. In the Senate,
the action of it's finance committee and
the course of the debate indicate that
it may not agree to this provision and
il is now proposed to make up the de-
felt by the imposition of a general in
come tax, in form and substance of
almost exactly the same character as
in the case of Pollock VS.. Farmers
Loan & Trust Co, Q57 U. S. 429) was
held by the supreme court to be d.
rect tax and therefore not within the
IF he fo6arol ont tn i'm
pose unless apportioned among the
several states according to population.
This new proposal, which l did not
discuss in my inaugural address or in
my message at the opening of the
present session, makes 1t appropriate
for me to submit to the Congress GER
tain additional amendments.
The decision of the supreme court In
the income tax cases deprived the ma
tional government of a power, which.
by reason of previous decisions of the
court, it was generally supposed the
government had. 1t is undoubtedly
power the national government ought
to have 1t might be Indispensable to
the nations life in great crises.
Although l have not considered
constitutional amendment as necessary
to the exercise of certain phases of this
power, a mature consideration has sat-
isfied me that an amendment is the
only proper course for it's establish
ment to it's full extent. therefore rec
ommend to- the Congress that both
Houses, by a two-thirds vote, shall
propose an amendment to the constitu
ton comforting the power to levy an
hn
mont without appointment. Upon the
states in proportion to population.
This course is much to be preferred
to the one proposed of re-enacting a
law once iudiciously declared to be I'M
constitutional.
For the Congress to assume that the
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 pol
icy to accept the decision and remedy
the defect by amendment in due and
regular course.
Again, it is clear that by the enact
ment of the proposed law, the Con-
gress will not be bringing money into
the treasury to meet the present def
cheney, but by putting on the statute
book a law already there and never re-
pealcd, will simply be suggesting to the
executive officers of the government
their possible duty to invoke litigation.
If the court should maintain it's for
mer view no tax would be collected at
all. If it should ultimately reverse it
self, still no taxes would have been
loIa
1t is said the difficulty and delay in
securing the approval of three-fourths
of the states will destroy all chance of
adopting the amendment. Of course,
no one can speak with certainty upon
this point, but 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 govern
ment to levy an excise tax which &C
composites the same purposes as cor
poration income tax and is free from
certain objections urged to the pro-
posed income tax measure.
[ therefore recommend an amend
ment to the tariff bill imposing upon all
corporations and joint stock companies
for profit. except National banks 10Th
erwisc taxedD, rawlings banks and build
ing and loan associations, an excise tax
measured by two per cent. On the net
income of such corporations. This is
an excise tax upon the privilege of do
ing business as an artificial entity and
of freedom from a general partnership
liability enjoyed by those who own the
stock
! am informed that a two per cent.
tax of this character would bring into
the treasury of the U. S. not less than
s25, 900, 900. The decisions of the su-
preme court in the case of Spreckels
Sugar Refining Co. against McClain
192 U. S. 397) seems clearly to estab-
lish the principal that such a tax as
this is an excise tax on privilege and
not a direct tax on property and is
within the Federal power without ap-
portionment according to population.
The tax on net income is preferable to
one proportiOnate to a percentage OF
the gross receipts, because it is a tax