Omaha daily bee., 1909-06-16
TAFT AGAINST INCOME TAG
CONSERVATIVES See Something Must
ne Offered 60 Coantry-Brown's
Resolution - Favored.


-
WASHINGTON. June ib.~when the tn
come tax question comes before the senate
fci a vote next Friday the plan of It's
opponents. backed by the influence OF Presi-
dent Taft, 10 circumvent the adoption Of
such a measure, will be fully outlined.
Already the opponents express confidence
In their abality to substitute for the in
come tax amendment a provision for n tax
on net earnings Of corporations. available
for dividend purposes, coupled with a pro
vision for the submission to the legislatures
Of the several states a constitutional
amendment giving congress the power to
lay or collect direct taxes on incomes.
For several days It has beea recognized
by the opponents OF the income tax ques-
ton that he only way they could make
certain the defeat Of the proposition would
be t. offer something IN its stead which
would be acceptable to the country Taxes
on net earnings of corporations, gross re-
ceipts Of corporations. dividends Of cor
porations and other forms Of corporation
taxes were brought forward one after an
other, only to meet rejection from adyo-
Gates of the iIc,me tax
1t became known that President Taft dis
agreed with the supporters OF a tax on
incomes and would lend the administra-
W = lAluNAAN " uAAlk ahNut AANlh uNANhNs
But the income tax faction, numbering all
OF the democratic senators and a number
Of progressive republicans, vsriously esu-
mated at from twelve to nineteen, have
been keeping up a bold front, refusing TO
be diverted from their purpose by the sug-
gestion of different forms OF corporation
tax.
Browns Amendment in Favor. 9,
Early in the present session Senator
Brown OF Nebraska, a progressive repub-
lican, introduced an amendment providing
for the submission of the income tax uues-,
ton to the several states as an amend
ment to the constitution. After the sew
eral propositions providing for taxes upon
corporations had been rejected, the Brown
amendment was seized upon as the basis
for a compromise. Several progressive re-
publicans, notably Senators Brown, Jones
and Bourne, have been called to the White
house, and President Taft has discussed,
with them the question of submitting a
constitutional amendment to the states.
It is said that a number Of progressive
republicans have expressed themselves as
willing to support an amendment provid-
ing for a tax of 2 per cent on the UNI
distributed net earnings of corporations,
available for dividend purposes, II an
afnenOTnenl Is duOpNeu subhhehhhe. ~ tHN
states the question of adopting an amend
ment to the constitution, giving to con-
gress the right to collect direct taxes on
incomes.
Senator Aldrich was at the White house
today and was the guest OF President Fart
at luncheon. They discussed this PROPOSE
ton at great length and the chairman of
the finance committee agreed with the
president that such a plan would be wise
1t is understood that the president be-
lieves the income tax question should not
again be submitted to the supreme court,
but at the same time he takes the posi-
ton, It is said, that congress should be
given the power to levy taxes on incomes.
II is his theory, according to members OF
the senate who have talked with him
that the light Of congress to levy such
a tax should be determined as soon as
possible in order that this method OF rats
ing revenues should be accessible In time
OF war or emergency of any character
Taft Opposes Direct Taxes.
That the president is not in favor of
direct taxes when sufficient revenue can be
produced without them Is asserted ny
many senator's opposed to the Income tax
Harmonizing with the attitude OF the presl-
dent in this regard, the provision for tax
on undistributed net earnings OF corpora
lions, II adopted, probably would be linz
tied to a period OF two years. The idea
Of ,the provision for a short term tax Is
that sufficient revenues would be pro-
duced in two years to wipe out the de
ficit in the treasury and put the govern
ment finances on a firm footing. IT is
argued that the law could be extended by
act Of congress II necessary.
Every effort will be made by Senator's
Rcrah, Cummins and Bailey and their fol
lowers among progressive republicans and
democrats to force a direct vote in. the
senate Friday on the income tax amend
ment. A conference on that subject today
was attended by Messrs CUmmins, Borah.
LaFollette, Bailey and Clay. They sought
to meet the changing sentiment, in the
senate by deciding to amend the Bailey
Cummins amendment to provide for a tax
on the undistributed earnings of corpor-'
ations and excluding from. taxation divi-
dends OF corporations which are paid TO
individuals. This is simply 'another form:
Of PROVIDING against double taxation in an
income tax law. t.LAf
1t is impossible at the .present time to
forecast the outcome of the vote, or sew
eral votes that may be taken next Fri
day. 20 sa