The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-04-05
what l. state Instrumcn,alI,y ?


Last Fridays affirmative vote in The
House on tho propnS ton mrd,. hv Mr.
GIIlETT e. enforce publicity Of corpora
ton income tax returns has thrown a
powerful light On the "nn~ttu'ionalty
of the new tax. Everybody who l.
familiar with the decisions ST the S,r-
preme Court Will oun"asla thar II tho
corporation tax j. a tax on the orara-
ton of AN instrument employed by a
State Government to larry it. bowers
into execution. then n i forbidden bv
the Constitution
The bank cas. and subsequent cases
extending the Judgment IN thar first
case put the principle hovoRd contro-
versy The court sald IN ~" case Of
MCCUILOCH thar II State can tax
-the means I~'Sl by Congress then the
United States 20, nation will rca-e
70 exist. II that was true Iu 1919 tho
Union If States was then ~ near de-
stT7ICtiOn ~ ~ was fnr'v-twn wears
later. when Fort sumter was fired
upon: and Mr. WEBSTER. who AZ the
age Of 3 presented 10 the court the con-
tentiOn of IN" Jnred States. supported
by Mr.. PINCkNEY. dbl yerhaps his
greatest service for that Union. At
any rate h" gave an impnr-hahla repIv
10 Colonel RnOsEvELT'S statement the
other day az Cairo regarding the Use
fulness Of lawyers in representative
constitutional government
Advocates of Nh" new tax on state
corporations have dcuiel thar the taxa.I
State corporations arr the mcan- the
Instruments" ~ a STATE" referred Ia by
the court as IhoS" which Congress can
not TAX They have rrdioued tn. CON
tention that the liifl, shop IN WIud-nr
Vt, doing business ~ a stat" oortDra-
ton and taxed with r,sgcr' ~ rho
carrying on or doing business bv such
corporation" - an insirumanialitv If
Vermont projected by iha t@i-ril Ton
stitItion That NAV b. ~. hu' # Yer
mont thinks otherwise. what then.
However II may b" with ia" l.ttln Yer
mont stona, last Iridav- vote bv tho
House has made II clear That ~" House
thinks that some az l"1s' Of IA. taxed
State corporations ar. State agencies
~ public and ~ important that the
whole country - cnti'led 20 h. Informed
Of their operations, and ruhi,ci'v #
their income tax returns must H. EN-
forced
A line ~ difference was attempted
between private and public state rorpo-
rations. thereby Implying that 'ha latter
are the means" and inst r7Im"n's ~ State
government whose operations Congress
cannot tax.
II Congress ran tax tho br-inrSs or
the incnms 81 tho business Of state
corporations by pcr CEN u can tax
IL by 100 per cen' and thus prohibit
in eff@cf their Incorporation bv 2 STATE.
and destroy Nh" reserved right of every
State - xiv" = franchise 10 conduct
trad" and "rmw"r"" in-id" 81 tho state
That IL plain
The only quest ION i wlcthcr any
Of the taxed stat" corporations. mil
way and manufacturing corporations.
for example. ARE 80 public and Impor-
tant that they arc IN constitutional
sense the means "mplpy"d hv % stats.
to carry its power into cNecmion The
vote last Friday ia tho Ho'lS" has re-
piled in IN" affirmative"
IL must be- that a state corporation
b conduct THE trade and commerce
Of State is ~ much ~ hc exemnied
hrom taxation bv Congr,-Ss ~ Federal
corporation 10 conduct interstate" frad.
and commerce Il 10 b. exempt from
State taxation.
The fifth section NJ tho Adrninistra-
lions ball recently sent 70 Congress to |