The midland journal. (Rising Sun, Md.) 1885-1947, 1909-06-25
FRIDAY, JUNE 80, 1909.
WASHINGTON LETTER.

WASHINGTON LETTER.
The chief development of the tariff de-
bate during the past week was the special
message of the President advocating the
imposition of tax of per cent on the
net earnings of corporations and the pas
sage of a joint resolution submitting 10
the several states the question of author
izing Congress to impose tax on in
dividual incomes. The President argues
that in view of the decision of the
Supreme Court that an income tax was
unconstitutional, it would be far wiser to
seek constitutional amendment than to
reenact such tax without it, with the
chance that the Court would again decide
against it. He expresses the conviction,
however, that majority of the people
favor vesting Congress with the authority
to impose an income tax and the belief
that such authority might become highly
important in case of an emergency.
With regard to the corporations he de.
clares that inasmuch as the state confers
on individuals the right to do business as
a corporation, tax on their net earnings
would be tax on that privilege and not
a direct tax on property, such as the
Supreme Court referred to when it pro-
nounced the income taxa direct tax and
therefore unconstitutional. The Presi-l
dent says he believes the tax on the net
earnings Of the corporations will yield
not less than SIS, 900, 900 year toward
the revenues OF the government
~
In the estimation of the Republican
leaders the Presidents message means
the defeat of the ailey-Cnmmings in.
come tax amendment, and the enactment
of the tax on corporations. The situation
is decidedly interesting. In the opinion
of the organization Republicans, such as,
Aldrich, Hale, Gailinger and others, the
tax on corporations. Is extremely radical
and they would have none of tiff they
could help themselves, but they find
themselves face to face with situation
which they cannot control and they must
either accept the tax on the dividends of
corporations of have the income tax
forced upon them and of the two they
preferred the former, especially as by
presenting the Taft proposition them
selves they can save the appearance Of
defeat. They purpose to bring in the
corporation tax amendment on Monday
and offer it as substitute for the income
tax proposition. and they are confident of
its adoption. Speaker Cannon has ex-
pressed himself as heartily in favor of the
tax on corporations, although only a
short time ago he was opposed to such
tax, and it is predicted that there. will be
no difficulty in getting it through the
House.
~
The Democrats have held caucus at
which, they determined to fight for the
incofne tax as long as possible and they
will do everything they can to secure
direct vote on the Bailey.cnmmins propo-
sition. Failing in securing the adoption
of that they will. many of them at least,
vote for the corporation tax, first because
it is part of what they are striving for
in the income tax and secondly because
Il will accomplish just what Mr.. Aldrich
has been trying to prevent. 1t will teach
the people to lean on source of revenue
other than that derived from the pro-
tective tariff. They also appreciate the
force of the Presidents argument that the
imposition of tax on the net earning of
corporations will necessitatea federal in
spection of the transactions Interpretations
which he and they believe will prove
most beneficial. Some Democrats main
tain that once the people learn the
enormous profits made by the protected
interests, especially certain of the trusts
whose products are protected by pro-
hibitive tariff. they will rise en- masse and
insist that the tariff be greatly lowered,
SO that they feel that the corporation tax
will serve an excellent purpose.
The debate in the Senate is going on
steadily and with continuous victories for
fthe organization which has from FIVE to
ten majority in favor of all-the high rates
of duty which it recommends. The DEM
ocrats have striven valiantly for re-
auctions but they are outnumbered. at
every turn and can do nothing toward
occurring decreased duties, while some of
their own number desert on schedules
which affeA the products of their own
states.
IS