The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1909-07-05
IT'S VICIOUS, SAYS
SENATOR B0RAA
Taft's Plan Is Not Tax On Wealth,
Declares Statesman-Hints
1t Will Be Killed.
BY gibson GARDNER.

! WASHINGTON. ID. c.. july B.
The nearest thing 10 a crime that
congress has yet undertaken ID COM
nit is this proposed corporation tax. 3"
The speaker was Senator Borah or
Idaho. These new senators-and espe-
cially the ones from the west-haye a
frank way of calling a spade spade.
| was looking for little frank opin-
ion on the subject of the administra-
tons tail TO the tariff bill | suggest.
ed that the language was rather
| strong.
mo. II isn't" said he. IT'S vicious.
The measure Is vicious. Il isn't hon
est. II isn't frank. 1t ism I what II
pretends 10 be- II is bad In seven diff
ferent ways. and | am against 1t in
all seven"
Can you tell briefly and in words
OF one syllable why II is bad?'
The Idaho senator said:
NO. /. II is not tax on weal-n.
! though it pretends to be.
No. 2 The burden of tn: tax can
and will be transferred Immediately
TO the consumer, and will rot be paid
| by the corporation.
no. 3. II is OF questionable con-
stitutionality. All the arguments
against a re-enactment OF the income
tax are valid against this; and then
some.
NO. 4. The law will add nothing
10 the publicity OF corporation bust
ness. II Will not enlarge the powers
which the government now has under
the interstate commerce act and The
act which created the bureau OF cor
! porations
| NO. g. II discriminates between
the various small corporations, TAX.
| ing some and exempting others.
! "No. 6. II places certain legal
sanction on the holding company; and
the holding company is one OF the H.
struments for creating monopoiies
and trusts.
mo. T. II Is brought in 10 defeat
legitimate and proper tax on wealth
that Is, tax on incomes.
Those are some of the reasons
| against the passage OF this proposed
| law"
(Which do you consider the most
Important"
Corporation Will Not Pay Tex
We'll, | think the most important
one for the public TO keep in mind
is the fact that the corporation Will
not pay the tax; that Is, the big
corporation will not. The little Ger
portion will. In the competitive field
| IL will not be possible for the corpora
ton to transfer the tax Let ne l.
| lustrate Suppose ii Is a little cream
cry company out in Wisconsin earn
ing $4,000 year There are a lot
OF little creamery companies and
some of them are not incorporated.
| The ones not Incorporated won't pay
any tax under the law. Incorporated
ones will have TO pay. But how
] about the United states Express Co.
/ and the Western Union Telegraph
/ Co and the railroad corporations
! DO you suppose they will pay the tax?
/ By no means. They will simply trans
! fer II. am not indulging In prophecy.
am simply calling attention to what
has taken place under similar circum-
stances In the past. In 1898 this ques-
ton came up. In that year certain
war taxes were placed on certain or
/ the large corporations. like the war
revenue stamps on kilograms, express
receipts, and so forth. Did the tclc-
graph companies pay? Not IN the
least. The person sending the tcie-
gram put the stamp on, and II was so
with all the stamp taxes levied
through these big quasi-public corpor-
ations Being practically monopolies.
they were able to do this. They were
not in competitive fields. Their sit
uation was different from that OF the
creamery company or the little cor
poration whose prices are kept down
by competition
But more than that The big cor
porations even went 10 the supreme
court and got ruling that congress
could not keep them from transferring
the tax TO the consumer. They got II
ruling that it would be an Infringement
OF the freedom OF contract. Now. do
you see why the big corporation IL
not fighting this tax on corporations?
Then you don't think that the big
corporations are against this form OF
taXation?"
Il know they are not And If | did
not know otherwise, | have MIR. AL
drich's word forsit. He says they are
not"
Then this bill is popular with those
[ who think that II will simply be an
other way OF placing the burden on
| the consumer III IL dHouhts W any
thing at all?'
There is no doubt OF II. | am
convinced that Mr. Aldrich is firmly
and irrevocably opposed 10 any legiS
Iation which will result IN placing a
tax on wealth. He is willing TO dc
cept this bill In lieu OF a genuine
income tax amendment because IL
does not put any tax Oh wealth.
You said this would be ds question
able from constitutional point OF
view as the income taxi"
Get Into Same Difficulty.
And that's a fact They talk about
enacting d law suit. They will be up
against the same thing that was a
stumbling block in the income tax
case. They get into this mess ~
trying TO exempt the earnings of cor.
porations which are the holdings lf
other corporations. OF course. it's al
right TO try 60 avoid double taxation.
which would not be fair. but they im
mediately get into the same difficulty
which made the supreme court rule "A
il did In the Pollock case. They start
off with a proposition that II is tax
on the franchise and then they de
part from this proposition and go BE-
hind the franchise, to discover What
the property IL that pays the income
That shows that IL is an income tax
and tax on property: not a tax N
the franchise. The supreme court will
say that they are trying TO do indi
rectly what they found they could not
| 40 diractIV IL tho annrpnp rntirt uo