Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1909-06-16
TOday's Telegraphic News


message TO Congress this afternoon
President Taft recommended the sdop-
ton OF joint resolution by tTo-thirds
OF both houses proposing to the states
an amendment to the constitution grant
ing TO the federal government the right
TO levy aud collect an income tax. he
also recommended the enactment, as part
OF the pending tariff bill, an excise tax
upon all corporations of two per cent OF
their net incomes. The message reads
in parl: at is the constitutional duty
of the president from time to time OF
recommend to the consideration to
Congress such measures as be shall
Judge necessary and expedient. In
my inaugural address, Immediately
preceding this present extraordinary ses-
sion of Congress, | invited attention to
the necessity for revision of the tariff
at this session, and stated the principles
upon which ! thought the revision should
be effected. | referred to the then rap
idly increasing deficit, and pointed out
the obligation on the part of the trainers
of the tariff bill to arrange the duty 80
as to secure an adj quate income, and
suggested that lift was not possible to do
so by import duties, new kinds of taxa
ton must be adopted, and among them
recommended a graduated inheritance
tax as correct in principle rs certain and
easy of collection. The House of Rep
resentatives has adopted the suggestion,
and has provided in the bill 1t passed for
the collection of such q tax. In the
Sen9.e, the action of its finance com
mittee and the course Of the debate indi'
cate that it may not agree to this pro-
vision, and ii is 10" proposed to make
up the deficit by the imposition of fed
eral income tag in form and substance
almost exactly the same character OF
that which ia the case of Pollock VI.
Farmers Loan and Trust Company was
held by the Shpreme Court to be d.
rect tax and therefore not within the
power of the federal government to i'm
pose unless sppOrtioned among the sew
eral states according to population.
"The decision of the Supreme Court
In the income tax case deprived the
national government of The power which
by reason of previous decisions, of the
court, 1t was generally supposed that
government had. i! is undoubtedly a
power the national government ought TO
have. 1t might be indispensable to the
nations life in great crises. Although
have not considered constitutional
amendment a. necessary to the exercise
of cerlsin phases of this power, a mature
consideration has satisfied me that an
amendment Is the only proper cOurse for
its establishment to its fullest extent.
therefore recommend to the Congress-
that both Houses, by two thirds vote,
shall propose an amendment to the con.
stitution comforting the power to levy
an income tax upon the national gov
eminent, without apportionment among
the states in proportion to population.
at is said the difficulty and delay in
securing the approval of three. fourlhs
of the states will destroy all chance of
adopting the amendment. Bus | have
become convinced that 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 10 the states, if proposed 10
them.
"5econd, the decision in the Pollock
case left power in the national COVER a.
ment to lew 40 excise which accom-
plshes the same purpose as corpora
ton income tex, aud is free from GER
tain objections urged to the proposed in
come tax measure. 81 therefore recon-
mend an amendment to to the tariff bill
imposing upon all corporations and joint
stock companies for profit except nation
al banks Otherwise taxed ssvings bank.
and building and lean associations, an
excise tax measured by two per cent on
the net income of such corporations
This Is an exercise tax upon the priVil-
eye of doing business as an artificial
entity and of freedom from a general
partnership liability enjoyed by those
who own the stock.
81 am informed that two per
cent tax of this character would
bring into the treasury of the United
States not less than $25 600 600.
"The decision OF the Supreme Court
in the case of Spreckles Sugar Refining
Company against McClain O92 U. S.
800 seems clearly to established the
principle that such tax "a this is an
excise tax upon privilege and!nGt direct
tax on property, aud is within the
Federal power without appOrtiOnment
according to population. The Tax on
net income is preferable to one proper
Tomato tU percentage OF the gross re-
ceipts, because it is tax upon success
and not failure. 1t imposes a burden at
the sources of the income at time when
the corporation is we'll able to pay and
when collection is easy.
"Another merit OF this tax is the fed
eral supervision which must be exercised
In order to make the law effective over
the annual accounts and business trans.
actions Of all corporations. While the
faculty of assuming corporate form hes
been of the utmost utility in the bust
uess world, il is also true that substaD-
tally all Of the abuses and al Of the
evils which have aroused the public to
the necessity OF reform were made possible
by the use of this very faculty. If now
by a perfectly legitimate and effective
system of lnzatioU, we ere incidentally
able to possess the government and the
stockholders and the public OF the
knowledge Of the real business transac-
lions and the gains and profits OF every
I..........Lio.. L.. lie .n1nIE-. kn.o