The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1909-09-22

"
president said:
A part of the republicans and all
or the democrats of the senate
a general income tax on individu-
ais throughout the United Sta tes
me law was as near as II couiu
be made to that income tax law
winch had once been considereu "a. ps
the supreme court some ~ years
ago, and which was held TO pc un-
constitutional by a vote OF nVe TO
four. 1t was conceded that the tax
5000. 100000, which was far In ex-
cess of the needs OF the government
II the tariff bill was 10 retain It's
general form. as proposed, anu 50
TO produce revenues which shouio De
reasonably expected.
Our friends the democrats favored
the income tax with a view 10
substituting it for the tarin as an
income producing measure, thus
minimizing the effect of the taFln
in protecting the industries Oh the
country.
In other words, the passage of
the income tax bill would have lent
support probably to the proposition
to have a tariff for revenue only,
and would have interfered with the
protective policy to which the re-
publican party is pledged.
One further objection to the in
come tax amendment was that IT
had been declared unconstitutional
by the supreme court, and TO invoke
second decision upon that issue
was to question the uniformity OF
the decisions of the supreme court
and to drag the court INTO po-
litical discussion which, whaIever
its decision, would not make for it's
standing as an impartial tribunal
before the people. 1t indicated a
diversity of view between congress
and the courtsm .fsrenc ce-ot TO the
constitutionality OF the law which
it seemed unwise to perpetuate In
a formal statute
But the income tax amendment
seemed quite likely to pass px xo.e
number of republicans. Therefore,
those who were opposed to the IN.
come tax amendment looked apout
to see if a compromise couid not
be proposed less obJectlonaple tIan
the income tax amendment, which
would satisfy enough repupncans
who were inclined to favor the IN.
come tax to prevent the passage oi
that amendment.
Such a compromise was 1ouho IN
a proposal to pass the present cor
poration tax, and also the JOINT
resolution already referred TO. pro-
posing an amendment of the federal
constitution to the states autnor-
izing the general government 70 I'M
pose an income tax witnout ap-
portioning it as direct tax ac-
cording to the population OF the
states.
The provisions for the corpora
ton tax in the bill exempt all COT
porations whose net income Goes
not exceed $4,000. 1t is therefore,
i'm effect, an income tax; that is, lt
aPtnQlfN maze. Id
is tax upon success and not fall
ure.
The most Objectionable feature of
q direct income tax is the premium
upon perjury which IT oners 70
those who are willing to conceal
their income-a matter not at all
difficult to do-and who thus sub
ject to a much heavier proportion
ate burden those who are conscien-
tious in making their returns and
who paw their tax as the law in
tended.
SO great was this evil in tire levy
of an income tax in England that
when that tax was imposed directly
here in the so called income tax
amendment bill. 1t was found that
the proceeds of the tax of 10
per cent were less than the
proceeds Of an income tax of
per cent imposed as our corpora
uals directly but upon the income
before 1T comes into their hands.
This is a practical argument in
favor of the corporation income tax
as against an individual income tax,
that Is altogether unanswerable.
Another distinction which is made
in the English law. and which COM
mends itself to every one with a
sense of justice, is that the income
tax on passive and permanent in
yestments like the stocks and bonds
in a corporation should be higher
than on earned incomes, that is.
incomes earned by the services of
the individual as salary or as a
professional income.
Earned incomes thus described
are really the proceeds of an APP
plication of the capital of the in
divfdual which is being consumed
and will be entirely used up at the
end of his professional life. of 20
or 80 wears. whereas, the income
from corporate and business in
vestments will continue permanent
~ without regard as to whether