Evening star., 1909-06-22
BEFORE THE CABINET
Corporation Tax Amendment
Drafted.
THRASHING OUT DETAILS
Important Conference to Be Held at
White House Tonight.
PRESIDENT Is NOT WORRIED
Suggestions of Great Difficulties n
Connection With Proposition
He Deems Insincere.
PRESIDENT Is NOT WORRIED

President Taft is not in the least wor-
lried over suggestions that the corporation
tax amendments to the tariff bill is filed
with intricate problems that will require
weeks of work by Congress and the White
House to solve. These suggestions. he Is
satisfied. come largely from those who are
opposed TO such tax. From his own
study of the problem and from advice
he has received from financial experts
throughout the country he is convinced
that the tax will not be burdensome upon
the great business enterprises Of the
country. and that it will be easy of col
lection.
Going Over the Proposition.
The White House end OF the PROPOSE
ton is nearing tangible basis for ac-
tion by the Senate Attorney Generai
Wickersham has practically completed
his draft of the amendment. which lie
has considered with members OF the
Senate finance committee, Senator Root
and others upon whom the PRESIDENT re-
lies. Mr. Wickersiam had the document
with him when he went to the capinet
session today, and there the de ailS were
thrashed out with the care which such
any important piece Of legislation de-
mands.
1t is hoped to put the finishing
touches on the bill tonight, as the
President has invited the Senate
finance committee to be his guests at
dinner. Attorney General Wickershanl
and Senator Root will also be present
and during the evening the nnal dfatt
will probably be completed.
The argument that corporations 1T
order to avoid paying the tax of the
government may issue bonds to the.r
stockholders does not impress ihe
President or those engaged In whip
ping into shape the measure that is IL
be enacted in the Senate. 1t is not
believed that any corporation. proceed
ing upon a conservative basis would
issue an obligation upon which II
would have to pay interest yearly just
to escape paying a small tax.
The only method of evasion which the
President and his advisers contemplate
as possibly successful would be where
corporations are owned by private fami-
lies. Increases of salaries OF members
of the families would. of course, wipe
out the net receipts for division.
Interest on Bonds.
Up to this time there has been much
consideration of the question whether the
| undivided net receipts should be taxed
before the interest upon bonds are paid
but the opinion prevails that the amend
ment to the tariff bill to be reported
| bv the finance committee will tax the
net receipts available for distribution
after the interest upon bonds has been
provided. Where there are no bonds
| the tax would come out ahead OF dlVl-
dends TO stockholders.
An impression is somewhat widespread
that the tax would deprive stockholders
of good part of their dividends, but the
President points out that this is errone-
| GUS The tax is not to be upon the
capital stock of corporations. but upon
| the amounts left for distribution after
| all expenses of operation and interest
| upon bonds have been paid. In case OF q
corporation whose net earnings In yeai
are S1O0COO the tax would be $2.OOO, II
| per cent is decided upon. This Woulo
leave $9SOOO for dividends, surplus. etc.
Provision for Publicity.
| One satisfactory feature to the admin
| istration in the amendment is its pub
| licity provision. The railroads are max
| ing no protest over this, as the law
| regulating interstate commerce open:
| their business to the government to the
| fullest extent. Under this law the rail
roads report to the interstate commerce
commission upon uniform blanks author
lied under the requirements of the law
and the government has at its disposa
at all times the fullest information as tt
the business of these carriers. The pro
posed corporation tax law Will not cause
| any more publicity, so far as the road.
are concerned. than the laws under which
| they now work.
Played Golf Despite Heat.
The hot weather yesterday afternoon
did not prevent the President having
game of golf. The President played
with Gen. Clarence Edwards against
Vice President Sherman and Senator
Bourne. The latter won by 2 up.
! Senators Brown and Burkett Of Ne
| bras ska and Senators Burnham and Gal
| linger of New Hampshire called on the
| President today regarding patronage
matters in their respective states.