The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-06-17
Presidents Message on Earnings Tax

Washington, Juno 17.-President
Taft's special message recommending
q tax on net earnings of corporations
is as follows:
To the senate and house of repre-
sontatives-It is the constitutional du-
ty Of the president from time to time
to recommend to the consideration OF
congress such measures as he shall
judge necessary and expedient. In my
inaugural address Immediately pre-
ceding this present extraordinary ses-
sion Of congress, invited attention to
the necessity of revision of the tariff
at this session and stated principles
upon which thought the revision
should be effected. l referred to then
rapidly increasing deficit and pointed
out the obligation on the part of the
trainers of the tariff bill to arrange
the duty SO as to secure an adequate
income and suggested that II 1t was
not possible to do SO by import duties
new kinds of taxation must be adopted
and among them l recommended a
graduated inheritance tax as correct in
principle and as certain and easy of
collection.
The house Of representatives has
adopted the suggestion and has pro-
vided in the bill it passed for the col
lection Of such q tax. In the senate
the action of the finance committee
and the course of the debate indicate
that 1t may not agree to this provision
and 1t is now proposed to make up the
deficit by the imposition of a general
income tax, in form and substance of
almost exactly the same character as
that which in the case Of Pollack vs..
Farmers Loan and Trust company
Q57 u. s. 429, was held by the SUI
preme court to be a direct tax, and
therefore not within the power of the
federal government to impose unless
appcrtioncd ameng the several states
according to population This new pro-
posal. which l did not discuss in my
inaugural address or in my message at
the opening Of the present sessian.
makes 1t appropriate for me to submit
to the congress certain additional re-
concentrations.
Government Deprived Of Power.
The decision Of the supreme court
in the income tax case deprived the
national government of a power the
national government ought to have.
Il might be indispensable to the ma
tons life in great crises. Although
have not considered a constitutional
amendment as necessary to the exer-
else of certain phases of this power, a
mature consideration has satisfied me
that an amendment is the only proper
course for It's establishment to its full
extent. therefore recommend to the
congress that both houses, by q two
thirds vote shall propose an amend
nicnt to the constitution comforting the
power to levy an income tax upon the
national government without appor-
ton to population.
This course Is much to be preferred
to the one proposed of re-enacting u
law once judicially declared unconsti-
tutional.
For the congress to assume that the
court will reverse itself and to enact
legislation on such an assumption will
not strengthen popular confidence in
tho stability Of judicial construction of
the constitution. It is much wiser pol
icy to accept the decision and remedy
the defect by amendment in due and
regular course.
Again 1t Is clear that by the enact
ment Of the proposed law the con-
gross will not be bringing money into
the treasury to meet the present defi-
cheney, but by putting on the statute
books law already there and never
repealed will be simply suggesting to
the executive ofIicers OF the govern
ment their possible duties TO invoke
litigation. II the court should main
tain its former view. no tax would be
collected at all. If it sould ultimately
reverse itself. still no taxes would
EAve been collected until after pro-
tracted delay.
Amendment . In Danger.
TT II said the dimcnlty and delay
In securing the approval OF three
fcurths II the states viii destroy all
chance q adopting the amendment
of COURSE no ono en- speak with car