Omaha daily bee., 1909-09-22
TAFT TALKS ON
INCOME TAXES
Executive Discusses This Feature of
the Tariff Bill in His Speech
in Denver.
DEFENDS CORPORATION TAX
Says it Contains Many of Best
Features of English Law.
q. WOULD CHANGE CON. vIoN
: Il
States Are Asked to Ratif u psi
ton for Amendmel
!BAILNaER Jorgs e z
President POstpones His Ada -
Conservation Policy Until
Reaches salt Lake city
or spokane.
Says it Contains Many of Best
Features of English Law.
, WOULD CHANGE CON. v1oN
States Are Asked to Ratif. Il os
ton for Amendmei
BALLINGER

DENVER. sep. 2l-Making his way
SIN farther west President Taft arrived
in Denl er this afternoon and tonight in
the Denver Auditorium, where a year ago
Mr. Bryan was nominated as his opponent
in the presidential race, faced crowd
Of thousands that in it's noisy welcome and
continuous enthusiasm recalled some OF
the scenes Of convention week.
President Taft, switching from his pur-
pose 10 discuss the question or the con
/servation Of natural resources IN his Den
yer speech, elected tonight to take up the
corporation tax passed as a part of the
A3ayne tariff bill and to defend it as
Vsgainst the proposition to impose direct
income tax, which he acknowledged seemed
likely to pass the senate when the corpora
tion tax was devised as compromise. The
president strongly urged that all the states
should adopt the proposed amendment to
. the constitution, however, TO make an in
come tax possible in time of need.
BaIlinser Joins Party.
0Mr. Taft was Joined here today by the
Secretary OF the Interior, Mr.. Ballinger
who will accompany him on a part of the
trip through the far northwest. 1t is
likely that the president desired a further
conference with Mr.. Ballnger, whose con-
duct Of the Interior department he re-
Gently upheld in a long letter called out
by the Ballinger- Pinchot controversy, be
fore making final exposition Of the aims
and objects OF this administration as to
the conservation OF this service. Mr. Taft
probably will not take up the subject now
until he reaches Salt Lake City, where he
spends Friday and Saturday, or he may.
wait until he arrives at Spokane, where,
a he
Pinchot controversy really had It's public
ailing
Best Form of Income Tax.
The president tonight declared that the
corporation tax was in itself the best
form Of income tax that could be levied.
and pointed out that 1t contained many of
the best features of the income tax law
OF England, In urging states 70 vote for
the amendmeht In tire con%itution per-
mitting the levy OF a direct income tax
without apportioning the levy among the
states according TO their population, the
president declared that It would be possi-
bic so to amend the corporation tax so as
to include within its scope every desired
feature of an income tax except the levy
upon incomes derived from actual salary
and professional services. The president
said he opposed a direct income tax ex-
Sept in cases OF emergency, and he be-
lieved It to be a prime fault in the fed
-eral constitution that no provision is
made for a direct levy to meet wartime
or other extraordinary expenses. Mr..
Taft declared that It was the supreme
court decision declaring unconstitutional
the income tax law passed by a demo-
cratic congress some years ago that pre-
vented the leaders in congress during the
session recently closed from including in
the corporation tar measure a provision
for a levy upon bonds and bondh holders.
To tax bonds would result in the reduc-
tion, OF the rate OF interest and hence this
resulted in a direct tax upon the individ-
ual holders OF the bonds and came in con-
tact with the decision of the court that
no direct tax could be levied by the ma
tional goverpment without the resulting
apportionment Of the proceeds among the
states.
Experience of England.
THE president based his argument in
favor OF the corporation tax. as compared
TO the direct income tax. almost entirely
upon the results Of the income tax in
England
He pointed out that the tax there is not
a direct levy, such as was recently de-
feated in the senate only through a com
promise, but that It laid the tax upon the
the individual. The English tax is levied
first on the declared dividends Of corpora
tions. secondly on rents before leaving the
hands OF tenants and third on the in
aividual directly. II was found In England
that a direct income tax at 10 Der cent
did not produce as much revenue as the
present method OF taxation at s Der cent
This. he declared, illustrated the premium
that the direct tax places on perjury and
concealment.
1t is question, the president declared
whether incomes from earned salaries and
from professional work should be taxed as
heavily as incomes derived from invest
ments or not taxed at all The latter, he
said. was the effect OF the corporation tax
Reference 90 Tariff.
Al the auditorium tonight, after a few
preliminary remarks. Mr.. Taft touched
briefly on the tariff saying that while a
revision had been deemed essential, there
was also a deficit In the treasury TO be
met, This partly will be met by a cut OF
forty million to fifty million in the appro-
prtahons TO be made by congress and
paruy by the income from the new cor
porauon tax law. Mr.. Taft said he had
favored Al first an inheritance tax but
the objection that the states had pre-empted
thar held had sufficient weight TO defeat
the proposition
The president continued: "A part of the
republicans and All OF the democrats OF
the senate united in pressing for copsid-
eration general income tax on individ-
uals throughout the United States. The
law was ~ near as II could be mada 10
that income tax law which had once been
considered BY the supreme court some ten
years ago and which was held to be un-
constitutional by vote or five 70 four
IL was conceded that the tar would prob
ably raise si5oooo.OOO TO 12O0 OOO. 600
which was far in excess or the needs OF
the government II the tariff bin was 10
retain It's Feneral form, as proposed, and
80 10 produce revenues which should be
reasonably expected. Our friends, the
democrats favored the income tax with
2 VisW - substituting it for the tariff