Evening star., 1909-06-15
Constitutional Amendment to
Permit Income Tax Levy.
SUBMISSION DECIDED ON
Corporations to Meet Deficit in
Revenues Meanwhile.
SENATE LEADERS COMPROMISE
Canvass by. Senator Crane Reveals
That Course Decided Upon
Will Prevail.

| After a day Of frequent conferences.
including one with President Taft. and
OF anxious inquiries into the attitude of
| lican leaders In the Senate were able to
assure themselves last night that they
| had succeeded In compromising the in
come tax situation, which had caused
out income tax proposition would be de-
feated
The compromise includes provision
for a tax on the net earnings of corpo-
rations and the initiation of steps look
| ing to the submission Of an amendment
| to the Constitution of the United States
authorizing the levytng Of an income tax
President Is Agreeable.
The compromise has the sanction of
| President Taft and will have the support
Of sufficient number of senator's to
carry 1t, the republican leaders predict
Their forecast is not based merely upon
hope. but on a personal canvass Of the
Senate, made by Senator Crane.
The prospective success Of the new
plan was assured by the adherence to it
Of several progressive republicans who,
while preferring a straight-out income
tax amendment, found they could not get
it, and turned to the compromise in the
spirit of taking half a loaf rather than
no bread.
1t has been evident for week or more
that an income tax amendment was not
desired by the leaders in Congress nor
the administration. and that the efforts OF
an insurgent faction to override them
would prove futile and inducive only to
party disruption.
Demand Is Yielded To.
1t was equally evident that the demand
for taxation of class different from
that proposed solely by customs was so
insistent that 1t could not be brushed
aside by the Senate leaders. but must
be recognized in some compromise form.
The proposition to substitute for the
income tax tax on net earnings of
corporations was not entirely satisfac-
tory to the more ardent of the income
takers. They promised to make trou-
BILE for the leaders who are pushing might
and main for an early vote on the tariff
bill
The original demand for a straight
out income tax would not down. 1t was
in this situation that Senate leaders fell
upon the suggestion for the submission
of a constitutional amendment
Democratic Proposition Adopted.
1t is true that the plan was urged in
the democratic national platform. In
that view the proposition was little
Objectionable to some republican senators.
but they took the broader view that
they could not reject a good building
stone because some democrat happened to
spy it first.
President Taft, who was consulted,
locked at the matter in the same light
and gave his assent to the compromise.
\ progressive republican, Senator
Brown of Nebraska, had introduced
earlier in the special session resolution
providing for the submission to the sew
eral states of an amendment to the Con-
stitution. This will form the basis Of
the idea to be worked out.
The framing Of the resolution will be
left to the committee On judiciary. 1t
will require the assent of two-thirds of
both houses to submit the amendment
and adoption by three-fourths of the
states to make it effective.
Corporations to Help Out.
In the meantime. the needed additional
revenue will be raised by the special tax
on corporations.
Although the Senate leaders assured
themselves of the necessary votes to pass
the compromise, the original income takers
will fight it and stand by their first plan.
Every effort will be made by Senators
Borah, Cummins and Bailey and their
followers among the progressive republi-
can and democratic senators to get a di-
rect vote in the Senate next Friday on
the income tax amendment.
A conference on that subject was at
tended by Messrs 'Cummins. Borah, La
Toilette. Bailey and Clay. They sought
TO meet the changing sentiment In the
Senate by deciding to amend the Bailey
Cummns amendment to provide for a
tax on the undistributed earnings of cor
poratons and excluding from taxation
dividends of corporations which are paid
to individuals.
This is simply another form of provid-
ing against double taxation in an income
tax law.
Hope or Fight Not Abandoned.
The straight-out income tax advocates
held long talks among themselves during
the day. They still are full of fight and
forlorn hope.
They insist that Senator Aldrich's mar
gin OF majority for his compromise
scheme is so close that the change OF a
| few votes would carry the other way.
| They will attempt to secure record vote
| on "A plain income tax amendment in the
| hope of a change of heart at the last mo-
| ment on the .art of some OF those who
| have been with them up to this time.
While recognizing fully that the mar
| gin is narrow, the Senate leaders are con-
| tident they can hold their coalition on the
| new compromise and put II through. They
/ feel that they must at all hazards pre-
vent the bill going to the House with
| straight income tax provision. for the
| House would accept 1t In jiffy.
Why Radicals Should Be Content.
1t is pointed out that the radical in
come tax advocates should not balk at
the proposition to submit a constitutional
amendment for consideration. as the DEM
| ocratic party. supposed to represent the
most radical element in the country, is
| content with that and does not ask Con-
/ gress to slap the Supreme Court in the
| face by passing an income tax bill that
| has been once declared Unconstitutional
| Undoubtedly the assent of President
| Taft TO the compromise plan lends great
1 weight TO il with senator's 1t is said thar