The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-06-23
TAX MEASURE READY.
Taft's Revenue Raiser Iy Submitted
to a Conference.

Washington, June 23.-Details of
the proposed measure for the
taxation of net earnings of corpora
lions were arranged last night at the
most important conference that has
been held at the White House since
Mr.. Taft assumed the presidency.
There were present as the presidents
guests at dinner Attorney General
Wickersham and Senator Root, who
are charged with the task of draft
ing the measure; Secretary of State
Knox, Senators Aldrich, Burrows,
Penrose, Hale, Cullom, Flint, Smoot,
McCumber and Lodge, constituting
the Republican membership of the
senate finance committee; Speaker
Cannon, Representative Payne chair
man of the house committee on ways
and means, and Representative John
Dwight of New York, the Republican
! whip of the house.
! The statesmen sat down to dinner
| in the state dining room at o'clock
| No business was discussed at the din
ner but for two hours afterward the
| corporation tax measure, which had
been prepared in the form of an
| amendment to the tariff bill. was
viewed from every angle. The
carefully prepared copies given to
| each member of the party by Attor-
| ney General Wickersham were re-
| turned to him at the end of the con-
| ference.
President Taft himself suggested
! that the copies should not be taken
by the members of the party until
| the amendment had been perfected.
All agreed not to make the form OF
| the amendment public until 1t is
ready to be introduced in the senate
as a finance committee amendment to
the tariff bill.
finally agreed upon, although not
| fully formulated, provide that all cor
| porations having capital stock and
! organized for profit shall pay tax OF
two per cent on their net earnings.
| Corporations coming within that
| designation will be compelled to
make returns to specially named
| agents of the bureau of internal
| revenue of the treasury department
| giving the amount of their gross re
! CENTS, capital stock, bonded in
debtedness and all other visible debts.
| Separate from these returns the cor
| porations will be compelled to report
| the amount of their net receipts AFTER
| deducting their general and ordinary
running expenses, interest on ponGs
I'D to the amount of the capital stock
| of the corporation, interest on notes
| and other forms of tangible Indebted
ness, and any actual loss that may
| have been incurred in business which
| loss was not made by insurance, sal
| wage or other form of returns
The amendment will define the
character of losses which may be de-
Quoted from the net earnings upon
which the tax is to be collected. These
losses will include bad accounts of a
mercantile corporation, losses upon
securities held by the banks, uncollect-
able notes and all other forms of bad
debts, which are usually charged &c
profit and loss accounts.
AS has been stated before. the Two
per cent tax will apply to all corpora
lions organized for profit. but each
corporation will be allowed $4,000
exemption which means that the ta1
will not be collected except upor
: earnings in excess of $1,000
Any corporation which makes ;
9 false report to an agent of the bureau
of internal revenue who has beef
DESIGNATED to collect information re
I garding earnings or has made fraud
ulent return upon any of the subject
covered by the law will be subjected
to a penalty.
= The tax will be collected upon tn,
entire amount of preferred and com
mon stock of every corporation ant
upon the bonds of a corporation wher'
they exceed the total amount o
: capital.
I 1t is intended that the law shall be
I come operative Immediately on thu
E passage of the bill. The life of thu
!: measure was made indeterminate in
stead of two years or some other hxet
Limitation such as had been original.
suggested. The present years tax will
be co1lectable July 1, 1910, the begin
ming of the next fiscal year. Tt wa
decided at the conference that all in
l corporated insurance companies or
ganized for profit shall be brough
within the terms of the proposed cor
poration tax law.
! Estimates place the probable
amount that would be raised by TIL
! proposed per cent tax on net earn
l ings of corporations, after taking int
. consideration all of the exemption
S stated, at from S25,OO0,OOO to $50,
I 100000.