The Washington times., 1909-06-30

measure.
Defends Income Tax.
Senator Cummlns defended the valid
ity of the income tax at length and then
attacked the corporate D tax on legal
grounds and as 10 its justice and fair
ness. He said:
The Supreme Court has twice since
the decision in the Pollock case had oe-
casion TO consider questions relating to
direct and indirect taxation, and upon
both occasions. while not overruling
expressly the Pollock case, overturned
the principle which. being adopted in
the Pollock case. led TO the overthrow
of the income tax law. The first of
the decisions to which 1 have referred is
Knowlton VS.. Moore. IFS L. s.. Al
This decision dealt with the act of
Congress OF June Is, 1888, imposing a tax
upon legacies or distributive shares
passing either by VIII or by the inter-
state laws of any State or Territory,
or any personal property or interest
therein, transferred by deed, grant, bar
gain. sale. or gift, made or intended to
take effect in possession or enjoyment
after the death OF the grantor or bar
gamer. 1t was graduated tax. The
court held that il was not direct tax
within the meaning Of the Constitution.
Second Decision.
THE second of the decisions TO which
I refer is Spreekels Sugar Refining
Company VS.. Mccain, 1872 u. S. 397.
This case also arises out of the war
revenue act of 1898, which imposed a tax
on gross receipts OF persons. firms. COM
panies, and corporations carrying on or
doing the business Of refining petroleum.
sugar. or maintaining a pipeline Cor
transportation. Although this was
clear and specific tax on income. the
court held il to be an excise tax, and
not prohibited by the Constitution.
THE suggestion that 1t is unseemiy
TO challenge the ruling announced in the
Pollock case is without merit.
Takes Legal Standpoint.
Having concluded ell that desire to
say respecting the general validity Of
an income tax, / now reach the amend
ment proposed. by the committee. as a
substitute for the amendment proposed
by the Senator from Texas and myself
1 shall first view it from a legal stand
point; and thereupon I affirm that the
amendment proposed by the commit
tee X subject TO all the objections
urged against ours, and II has one
which is peculiarly its own
Il It is a tax upon incomes. and the
fact that it brings within its }rO-
vision the incomes Of corporations
only. does not and cannot change its
character. The SpreckIes case, which
/ have already mentioned. gives no more
support to the validity OF this amend
ment than 20 ours.
- It does not change the nature OF
a tax to bestow upon IT a different
name; and II mere name was i'm
pOrtant or influential, the tax proposed
by our amendment could be called an
excise tax just as easily and Just as
correctly as can that term be applied
70 & 10 Fas~ cd f.--4 q
g. The stroke OF a pen win make the
tax authorized by our amendment a tax
upon the right to receive and enjoy a
certain income, and il will be as well
mittee insists Upon, when II is said
that il is laid upon the net incomes Of
corporations with respect TO the carry
ing on of their business"
Questions Effect
He said further:
when, however, we pass from the
legal aspects Of the proposed amend
ment TO an examination OF its govern
mental morality, that is to its justice
and fairness, we pass at once from the
field Of doubt and uncertainty TO the re-
gion Of absolute proof and unerring in
stinct When SC, examine, my propo-
sition IS that this amendment now sug-
gested by the committee not only viO-
iates the fundamental principle of taxa
ton. but lepudiates the most vital OBJ
legation of our social compact.
What are we about TO do2
IT ct me first answer this question
negatively. The President points out in
his message. somewhat vaguely, that
in the exercise of taxing power we
may find an effective method of
regulating the corporations of the
country. 1 do not at this moment ex-
press any opinion with regard TO the
validity OF the proposal TO regulate cor
pOratiOns through the medium Of taxa
ton. bur evidently the thought was in
the mind OF the Chief Executive. The
mea sure proposed by the committee,
however, is absolutely barren OF any
SUCH idea
DIES FROM FLEA BITES.