The Birmingham age-herald., 1909-06-26
President Taft's Scheme Is Pre-
 sented To Senate
PENALTY IS PR0WBED
Corporations Are to Be Safeeuarded In Reports, but False Returns on 0ncomes Will Be Punished
 Very Severely.

presented to the Senate today by MT. Aldrich, chairman of the finance com mittee, and was ordered printed as a committee amendment to the tariff bill. If schedules are completed by Monday the corporation tax amendment will then be taken up and held before the Senate until final disposition is made of 1t and of amendments on the subject of di- rect tax on incomes.
 In general form the corporation tax measure follows the outline given by tho i Associated press after the conference at the White House on Tuesday night when i the subject was considered by the Pres ident, lawyers of his cabinet and Senate l and House republican leaders. As draft i ed by Attorney General Wickersham and Senator Root, the measure is believed to be amendment proof and an effort will be made to put 1t through Congress un- changed. It will be designated as the Taft plan." the weight of the Presi- dents name being depended upon large ly to encompass it's enactment.
 Briefly stated the plan imposes tax 1 of 2 per cent upon net earnings of every corporation, joint stock company or as- sociation, organized for profit and hay ing a capital stock represented by shares and every insurance company, organ ized under the laws of the United States or of any state. territory or district or organized under the laws of any for eign country and engaged in business within the United States
 Every latitude Is given to concerns fo ba fov fo,. expenses, cost of maintenance, the depre- citation of property. debts and the in terests thereon, other forms of taxation and all Expenditures usually taken from earnings accounts. Every corporation is also given an exemption of s500O of earn ings before the tax shall apply.
 Manner of Collection.
 All of the machinery relating to the collection, remission and refund of in- ternal revenue taxes Is made applicable to the corporation tax and the responsi- bility for the enforcement of the proposed law rests with the commissioner of in- ternal revenue in the same manner as other internal taxes.
 While the corporations are required to supply information of most intimate character relating to their business, pro- vision is made to safeguard them against wrongful use of data obtained for the purpose of assessing the tax. Penalties are provided in case of false or fraudu lent returns
 Practically every character of incorpor- ated institution organized for profit Is brought within the provisions of the corporation tax The provision defining the concerns from. which the tax will be collected is as follows:
 Who Will Be Taxed.
 That every corporation, joint stock company or association organized for profit and having a capital stock rep resented by shares and every insurance company. now or hereafter organized un- der the laws of the United States or of any state or territory of the United States or under the acts of Congress ap- l plicable to Alaska or the District of Co., lumbia, or organized under the laws of any foreign country and engaged in bus i mess Tn any state or territory of the 1 United States or in Alaska or in the Dis l trci of Columbia, shall be subject to pay i annually special excise tax with respect 1 to the carrying on or doing business by such corporation, joint stock company or association or insurance company, equiva- ] lent to per centum upon the entire 1 net income over and above $500, received ] by it from all sources during such year, | exclusive of amounts received by it as dividends upon stock of other corpora tlons joint stock companies or associa- l tions or insurance companies subject to l the tax hereby imposed, or If organized under the laws of any foreign country upon amount of net income, over and above s5000 received by 1t from business | transacted and capital invested within the United States and its territories. Alaska and the District of Columbia dur ing such year, exclusive of amounts so received by 1t as dividends upon stock l of other corporations, joint stock com panies or associations or insurance com- panies, subject to the tax hereby imposed.
 How to Fix Income.
 Such net income shall be ascertained by the deducting from the gross amount of the income of such corporations, joint 1 stock company or association or insurance company from all sources
 "All the ordinary and necessary ex- l penses paid within the year out of in- come In the maintenance and operation of its business and properties.
 "All losses actually sustained within the year, and not compensated by in- surance or otherwise. including a reason- Able allowance for denreclation of prop erty. if any. and il the case of insur- ance companies the sums required by law to be carried to premium reserve fund
 Interest actually paid within the year | on its bonded or other indebtedness ex- ceeding the paid-up capital stock of such | corporation, joint stock company or as- 1 sociation or insurance company outstand- ing at the close of the year.
 | "All sums paid by 1t within the year l for taxes imposed upon authority of the United States or of any states or ter ritory thereof
 "All amounts received by it within the year as dividends upon stock of oth- CT corporations joint stock companies or associations, or insurance companies, sub ject to the tax hereby imposed
 | Provided that in the case of cor poration, joint stock company or asso. ciation, or Insurance company, organized under the laws of foreign country ir which such income shall be ascertane6 l by deducting from the gross amount ot Its income from business transacted and capital invested within the United States and any of It's territories, Alaska and the District of Columbia.
 "All the ordinary and necessary ex
 penses actually paid within the year out of the earnings in the maintenance and operation of its business and prop erty within the United States and 1t. territories, Alaska and the District o Columbia.
 All Losses Sustained.
 "All losses actually sustained within tn, year in business conducted by it within the United States not compensated b, insurance or otherwise, including a req
 sonable, allowance for depreciation O
 property, if any, and in the case of in
 surance companies the sums required b,