The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1911-03-13
Supreme Court Today Declares In
i come Law is Constitutional
as Claimed by the
Government
means Big ANNUAL REVENUE
Approximately $25,ooo,0oo Annually
Will be Added to Uncle Sans
Golfers as Result of tho
Courts Decision.

washington, ID. c., March 13.-The
United States Supreme court today
decided that the corporation tax is
constitutional.
At 1925 Justice Day began to deliv-
er the decision of the Supreme Court
on the constitutionality of the corpo-
ration tax. Day first announced II was
within the power of the Senate to in
sert corporation tax provisions in a
tariff law which originated in the
House and of which tax provisions are
a part.
Day held the tav is an excise tax
on the doing of business" which Is ex-
actly the basis on which the govern
ment has defended the law. He held
that tax provisions are not an arbit-
rary exercise of a power. BY regarding
the tax as measured by income. rather
than being a tax on income. the opin-
ion held that the law was constitu-
tional, Notwithstanding the law might
reach the income from non taxable
sources.
The courts decision in the corpora
ton tax case was unanimous. BY this
decision source of income of ap-
proximately s25,OO0,O00 annually is as
sured to the government
OF all the objections to the tax
raised by the suits in all parts OF the
country none of them was found suffi-
cient to nullify the law.
Near the outset of the opinion is the
statement that the tax lis imposed
not upon franchises of corporations
Irrespective of their use in business,
nor upon the property of corpora
ton, but upon the doing of corporate
or insurance business, and with re-
spcct TO the carrying on thereof in
the sum equivalent to one pereentum
of the entire net income over and
above FIVE thousand dollars received
from all sources during the year; that
Is, when imposed in this manner, 1t is
tax upon the doing of business with
the advantages which inhere in the
peculiarities of corporate or joint
stock organizations of the character
described.
Plan of President Taft.
The fight against the constitutionali-
ty of the corporation tax began almost
Immediately after the enactment of the
Payne -Aldrich tariff low of 1909, of
which IL is a part. During the long
days of wrangling in Congress over the
measure, President Taft originated a
81 tla -
essary for the running of the govern
ment by imposing a corporation tax
He is said to have made the first
rough draft of the proposed law and to
have asked the Department of Justice
to perfect 1t.
Scarcely fifteen years befor". the Su-
preme Court of the United states had
declared unconstitutional the Income
tax measure enacted by Congress. In
order to have valid tax, the errors
of that law had to be avoided. Finally
the attention of members of the House
and Senate were called to the proposed
corporation tax as constitutions
measure. IL was urged as preferable
to another income tax which, II was
argued, probably would be declared
unconstitutional and as under the cir
cumstances better legislation than al
Inheritance tax. When the tarin oil
was In the Senate. the corporation ta'
provisions were inserted as an amend
ment to the Payne bill passed by tn
House They remained there and be
came a part of the tariff act.
What the Law Provided.
The provisions Of the law state
that the tax was a special excise Ia
with respect to the carrying on or DO
ing business" 1t was to be paid b
every corporation, joint stock com
pany or association represented d
shares. and every insurance company
organized under the laws OF the Unit
ed States or of any state or territory
1t was provided that the tax should o
equivalent to one per centum upon IN
entire net income over and above 80
900 received from all sources" exciu
sive of amounts received as DIVIDEND
upon stock of other corporations, toir
stock companies. or associations, or III
surance companies, subject to the ta
The law provided also that return
should be made by those taxed to u
Treasury Department. to be used as
basis for assessing the tax. These we
open to inspection. but In 1910 col
gress enacted legislation providing tn
the returns should be open To inspec
ing only upon rules and regulation
approved by the President
First Action IN Courts.
The first action in the courts to te
the constitutionality Of the law W
q begun In the United States Circ'
Court for the District Of Vermont.
woman began t. Stella =. Flint, qua