The Idaho Springs siftings-news., 1909-09-25

|, between the net receipts from the IN
ternaI revenue and tarin bill and the
expenditures of the government The
provisions for the corporation tax in
the bill exempt all corporations whose
net income does not exceed 5000. II
is therefore. in effect. an income tax:
that iS, il taxes earnings actually
made II is a tax upon success and
not failure.
Corporate Advantage.
Complaint is made that it is dis
eliminating tax in that it taxes busl-
ness conducted under a corporate
form, whereas when the business 10
conducted by a partnership the busi-
ness escapes taxation altogether. The
justification for the distinction arise.
from the advantages which the busi-
ness enjoys under a corporate form.
first. in that the individuals who
really own the business by being the
shareowners of the corporation we
only a limited liability and are rot
bound to meet the debts Of the cor
poration beyond their stock invest
ment, or in some states more than 100
per cent beyond their stock invest
ment; and. on the other hand. the
advantage OF a permanent establish
ment in the business because no mat
ter whether the present owners or
managers die or not, the business
continues in its corporate form with
out settlement thereof in the ad--
ministration of the estate OF the de-
ceased owners
Now. If the proposed amendment
to the constitution authorizing the in
position OF an income tax without ap-
portioning il among the states accord
ing to population passes. IT will be
possible to add to our corporation tax
the feature of imposing a tax on the
bonded interest in that corporation by
percentage tax upon interest to be
paid. thus reducing the amount of IN
terest which the corporation would
pay to the bondholders to the extent
of the tax collected. This would make
the corporation tax more beneficial
measure. and one reaching interests
that ought to be reached because un-
der modern systems Of financing cor
porations. the bondholders and stock
holders are all of them in q sense
joint investors. and a corporation in
come tax ought to include them all.
Under the conditions that existed with
reference to the constitution 1t seems
to me clear that the corporation tax
is an equitable burden. one reaching
active business. not too heavy to re-
tard it, but enough to collect q sub
staLtial revenue from those who are
successful in business.
1T is a tax easily collected-one
that no corporation can escape-on~
in which perjury cannot play any I'm
portant part at all IN an effort to es-
cape it.
Evidence Not be Made Public.
This is to be done only after the
commissioner of internal revenue
shall have ascertained from evidence
that their returns required by law are
not correct. Then the evidence which
he secures by his investigations OF
books and papers and examination OF
witnesses is not to be made public.
but is to be held in the secret
archives Of the government until the
President shall deem it OF public inter-
est and according to justice TO make
the facts known.
Il am most strongly in favor OF
adoption by the states Of the amend
ment authorizing Congress to impose
an income tax without apportioning
it among the states according to pop
ulation; and l am strongly in favor
III eAio UCS0uSC Ill llucS w great
stress, II war or some other calamity
were to visit this country, and We
should need to strain our resources,
the income tax would be one Of the
essential instruments by which We
could collect large amount of money
to enable US to meet the exigencies
1t has been SO in the past, for during
the Civil War it was understood that
the levy of an income tax without ap-
portionment was constitutional, and
such tax was levied and was col
lected. And l consider it in the con-
stitution. as at present construed, an
elemental weakness on the part of the
central government not to be able in
times OF emergency to levy such a
tax.
1T seems that the present Con-
gress has taken the wisest course in
adopting as much of the feature of
an income tax as conforms to the con
stitution. and by recommending an
amendment to the constitution which
shall enable US to round out and per-
feet this corporation tax so as to make
it more equitable, and SO to make it
an instrument Of supervision of cor
porate wealth by federal authority.
doubt not that the information thus
obtained may be made a basis for fur
ther legislation Of a regula i've charac-
ter, applicable only to those corpora.~
tions whose business is so largely oty
an interstate character as to Justify
greater restrictions and more direct
supervision"
After he had done with his manu-
script. President Taft said:
The question now il whether you
in Colorado will adopt the constitu-
tional amendment. 1t is not a party
question. There has been doubt ex-
pressed regarding the genuineness Of
those who voted for it: still I believe
the people favor it and hope that the
people will see that their legislatures
are properly representative Of their
will in this matter. Such power