The Glenwood post., 1909-09-25

between the net receipts from the In
ternal revenue and tariff bill and the
expenditures Of the government. The
provisions for the corporation tax in
the bill exempt all corporations whose
net income does not exceed $4,000. 1t
is therefore, in effect, an income tax;
that is, it taxes earnings actually
made. 1t is tax upon success and
not failure.
Corporate Advantages.
Complaint is made that 1t is a dis.
eliminating tax in that it taxes busi-
ness conducted under a corporate
form, whereas when the business IL
conducted by partnership the bust
ness escapes taxation altogether. The
justification for the distinction arises
from the advantages which the busi-
ness enjoys under corporate form.
first, in that the individuals who
really own the business by being the
shareowners of the corporation 1--we
only limited liability and are not
bound to meet the debts of the cor
poration beyond their stock invest
ment, or in some states more than 100
per Cehl ueyo thCih otoSh ihNCot'
ment: and, on the other hand, the
advantage of permanent establish
ment in the business because no mat
ter whether the present owners or
managers die or not, the business
continues in its corporate form with
out a settlement thereof in the ad-
ministration of the estate of the de-
ceased owners.
Now, If the proposed amendment
to the constitution authorizing the i'm
position of an income tax without ap-
portioning 1t among the states accord
ing to population passes. 1t will be
possible to add to our corporation tax
the feature of imposing tax on the
bonded interest in that corporation by
percentage tax upon interest to be
paid, thus reducing the amount of In
terest which the corporation would
pay to the bondholders to the extent
of the tax collected. This would make
the corporation tax more beneficial
measure. and one reaching interests
that ought to be reached because un-
der modern systems of financing cor
porations, the bondholders and stock
holders are all of them in sense
joint investors, and corporation in
come tax ought to include them all.
UHuel Iut CoHulliOHS thdt CAiotC0 WIN
reference to the constitution it seems
to me clear that the corporation tax
is an equitable burden. one reaching
active business, not too heavy to re
tard it. but enough to collect sub
staI-tial revenue from those who are
successful in business.
1T is tax easily collected-one
that no corporation can escape-one
in which perjury cannot play any I'm
portant part at all in an effort to es.
cape it.
Evidence Not be Made Public.
This is to be done only after the
commissioner of internal revenue
shall have ascertained from evidence
that their returns required by law are
not correct. Then the evidence which
he secures by his Investigations of
books and papers and examination OF
witnesses is not to be made public.
but is to be held in the secret
archives of the government until the
President shall deem it of public inter-
est and according to justice to make
the facts known.
Il am most strongly in favor Of
adoption by the states of the amend
ment authorizing Congress to impose
an income tax without apportioning
it among the states according to pop
ulation; and am strongly in favor
of this because in times of great
stress. If war or some other calamity
were to visit this country, and we
should need to strain our resources,
the income tax would be one of the
essential instruments by which we
could collect large amount of money
to enable us to meet the exigencies.
hoc in ho IN ~
the Civil War it was understood that
the levy of an income tax without ap-
portionment was constitutional, and
such tax was levied and was col
lected. And | consider it in the con-
stitutiOn, as at present construed, an
elemental weakness on the part of the
central government not to be able in
times of emergency to levy such a
tax.
| TT seems that the present Con-
gress has taken the wisest course in
adopting as much of the feature of
an income tax as conforms to the con
stitution, and by recommending an
amendment to the constitution which
shall enable us to round out and per-
feet this corporation tax so as to make
1t more equitable, and SO to make 1t
an instrument of supervision of cor
porate wealth by federal authority. l
doubt not that the information thus
obtained may be made basis for fur
ther Legislation of a regulative charac-
ter. applicable only to those corpora
tions whose business is so largely of
an interstate character as to Justify
greater restrictions and more direct
supervision"
After he had done with his manu-
| SrriDt President
THE question now is whether you
in Colorado will adopt the constitu-
tional amendment. II is not party
question. There has been doubt ex-
pressed regarding the genuineness Of
those who voted for it; still believe
the people favor it and hope that the
people will see that their legislatures