The wageworker. (Lincoln, Neb.) 1904-????, 1909-06-19
ASKS TO HAVE CONSTITUTION AMENDED
Believes Income Tax the Net Income Corporations Should be
Adopted and Made Law

securing the approval of three
fourths of the states will destroy all
chance Of adopting the amendment
OF course. no one can speak with GER
tainty upon this point. but 1 have be-
come convinced that great majority
of the people of this country are in
favor of vesting the national govern
ment with power to levy an income
tax. and that they will secure the
adoption of the amendment in the
state if proposed to them.
Second. the decision in the Pollock
case left power in the national gov
eminent to levy an excise tax which
accomplishes the same purpose as
corporation income tax, and is free
from certain objections urged to the
proposed income tax measure.
therefore recommend an amend
ment to the tariff bill imposing upon
all corporations and joint stock COM
panies for profit, except national
banks otherwise taxedl savings
banks and building and loan associa-
tions. an excise tax measured by per
cent on the net income of such cor
porations. This is an excise tax upon
the privilege of doing business as an
artificial entity and of freedom from
general partnership liability enjoyed
by those who own the stock.
am informed that per cent tax
of this character would bring into the
treasury of the United States not less
than Se5,000.00O-
| Tax on Privilege Valid.
The decision of the supreme court
in the case of Spreckles Sugar Rein
ing company against NcClain 192 ..
/ s. 3a1. seems clearly to establish the
principle that such a tax as this is an
excise tax upon privilege and not
direct tax on property and is within
the federal power without apportion-
ment according to population The
tax on net income is preferable to one
proportional to a percentage of the
gross receipts, because it is tax upon
success and not failure 1t imposes
a burden at the source of the income
at time when the corporation is well
able to pay and when collection is
easy. Another merit of this tax is the
federal supervision which must be eN-
ercised in order to make the law eff
fective over the annual accounts and
business transactions of all corpora
lions, While the faculty of assuming
a corporate form has been of the ut
most utility in the business world. it
is also true that substantially all of
the abuses and all of the evils which
have aroused the public to the neces-
sity of reform were made possible by
the use of this very faculty. If now
by perfectly legitimate and effective
system of taxation We are Incidental
/ ly able 10 possess the government and
he stockholders and the public of the
knowledge of the real business trans
actions and the gains and profits OF
every corporation in the country. We
} have made long step toward that
: supervisory control OF corporations
: which may prevent fl. Their abuse OF
} power,
l recommend. then, first. the adc1
ton of a Joint resolution by two-thirds
of both houses. proposing TO the states
an amendment to the constitution
granting to the federal government
the right to levy and collect an in
| come tax without apportionment
+ among the states according to popula
! tions and. second. the enactment as
: part of the pending revenue measure
: either as n substitute for. or in adii
+ tson TO, the inheritance tax. of an eN
else tax upon all corporations, meas
4 0red by > per cent of their net income
a ISigneO WILLIAM III. TAFT,
+ The White House, June 10. 1909.