The Montgomery advertiser., 1909-06-15
OPPOSE INCOME TAX
PRESIDENT TAFT TO USE INFLU- ENCE AGAINST IT.
The Opponents of the Measure VIII Substitute . Provision for .
 Tax on the Net Earnings

asa 4 Washington, June 14.--When the in- come tax question comes before the Senate for vote next Friday, the plan of its opponents. backed by the in- huence of President Taft to circumvent the adoption of such a measure, will be fully outlined.
 Already the opponents express conf dence in their ability to ubstitute for the Income tax amendment, provision for tax on net earnings of corpora tions. available for dividend purposes, coupled with provision for the sub- mission to the Legislatures of the sev- eral States, g constitutional amend ment giving Congress the power to lay or collect direct taxes. on incomes. For several days it has been recog- nized by the opponents of the income tax question that the only way they could make certain .the defeat of the proposition would be to offer something in its stead which would be acceptable to the country. Taxes on net earnings of corporations, gross receipts of cor- poratiops. dividends of corporations and other forms of corporation taxes were brought forward one after an other only to meet rejection from ad- vocates of the income tax. It became known that President Taft disagreed with the supporters of a tax on in- comes and would lend the administra- tion's influence to bring about their defeat. But the income tax faction, numbering all of the Democratic Sena- tors and number of progressive Re- publicans, variously estimated at from twelve to nineteen, have been keep ing up bold front refusing to be di- verted from their purpose by the sug- gestion of different forms of corpora ton tax.
 Early in the present session. Senator Brown (Neb.), a progressive Republi- can, introduced an amendment proyid- ing tor the submission of the income tax question to the several States as an amendment to the Constitution. Af- ter the several propositions providing for taxes upon corporations had been rejected. the Brown amendmentlwas seized upon as the basis for compro mise. Several progressive Republicans. notably Messrs. Brown, Jones and Bourne, have been called to the White House and President Taft has discuss ed with them the question of submit ting a constitutional amendment to the States.
 It is understood at the Capitol that number of progressive Republicans have expressed themselves, as willing to support an amendment providing for a tax f2 per cent on the undistrtbuted net earnings of corporations, available for dividend purposes if an amendment is adopted submitting to the States the question of adopting an amendment to the Constitution giving to Congress the right to collect direct taxes on in- comes.
 Senator Aldrich was at the White House today and was the guest of Pres ident Taft at luncheon. They discussed al the chairman of the Finance Commit tee agreed with the President that such plan would be wise. It is un- derstood that the President believes the income tax question should not again be submitted to the Supreme Court, but at the same time he takes the position. 1t is said, that Congress should be given the power to levy taxes on incomes. It Is his theory, accord ing to members of the Senate who have talked with him, that the right of Congress to levy such tax should be determined as soon as possible, in or- der that this method of raising reve- nues should be accessible in time Of war or emergency of any character.
 That the President Is not in favor of direct taxes when sufficient revenues can be produced without them. is as- serted by many Senator opposed to the income tax f1arinOnlzlnS WlhH tno attitude. of the President in this re- gard, the provision for tax on undis- tributed net earnings of corporations, if adopted, probably would be limited to a period of two years.
 The idea back of the provision for short term tax is that sufficient reve- nues would be produced in two years to wipe out the deficit in the treasary and put the Government finances on firm footing. It is argued that the law could be extended by act of Con gress, if necessary.
 Every effort will be made by Sena- tors Borah, Cummins and Bailey and their followers among progressive Re- publicans and Democratic Senators to get a direct vote in the Senate next Friday on the income tax amendment. conference on that subject today was attended by Messrs. Cummins, Borah, I.aFouette, Bailey and Clay They sought to meet the changing sentiment in the Senate by deciding to amend the Bailey Cummins amendment to pro- vide for a tax on the undistributed earnings of corporations and excluding from taxation dividends of corpora tions which are paid to individuals. This is simply another form of provid- ing against double taxationNin an in< come tax law.
 It Is impossible at the present time to forecast the outcome of the vote, or several votes. that may be taken next Friday.
 --------------------------
 HOLDS SHORT SESSION.