The Clarksburg telegram. [volume] (Clarksburg, W. Va.) 1874-1926, 1911-03-16
CORPORATION
TAX LAW IS
SUSTAINED
BY the Supreme Court Of the
United States in a De
cision Today.
SOURCE OF INCOME
OF Twenty-Five Million Dol
lars Annually is There
by Assured.

WASHINGTON, d. c., March 10
The corporation tax proyis.ons II the
Payne-Aldrlch tariff act were sus-
tanned today as constitutional by the
Supreme Court of the United states.
! Thereby source OF income OF APP
proximately twenty-five million dol
lars annually was assured TO the gov
ernrent. The court was unanimous
In It's decision.
The fight against the cons:itutlonal-
lily Of the corporation tax began al
most Immediately after the enactment
Of the Payne-tld-.ch tariff law of
1909. IF which it is part. During
the long days OF wraHgllng in Con-
gress over that measure, President
Taft originated a plan to raise part OF
the revenue necessary for the running
, of the government by imposing a cor
poration tax. He is said to have
made the first rough d:,ast Of the
proposed law and u have asked the
Department OF Justice to perfect it.
Scarcely fifteen years before, the
Supreme Court Of the United States
had declared unconstitutional the in
come tax measure enacted by Con-
gress. In order to have valid tax.
the errors of that law had 10 be avoid
ed. Finally the attention of men,
bers If the House and Senate were
called TO the proposed corporation tax
as n constitutional measure. 1t was
urged as preferable to another in
come tax which, 1t was argued. prob
ably would be declared unconstitu-
tlonal and as under the circumstances
better legislation than an inheritance
tux. When the tariff bin was in the
Senate, the corporation tax provisions
We're inserted as all amendment 10
the Payne bill passed by the House.
They remained there and became a
part of the tariff act.
: The provisions of the law stated
that the Tux was special excise tax
with respect to the carrying on or do
ing business" 1t was to be paid BY
every corporation, joint stock con-
Pt"! VI "fS'oNtA st't'' " e"''"eN 'V'
fpFoh' ana haN'hss ca9s'"t S'"&k rep
resented by shares, ard every !nsur-
ancc company, organized under the
laws OF the United States or Of amy
s''le or 'ef'itorE' " was P*o''us''
th"t 'ne 'aN siiou'u pc e'lulN"'e"' U
one per centum upon the entire net
income over ana above $''ooV received
from an sources tNclus'Ne oi
amounts received as DIVIDENDS upon
STOCK OF other corporations JOINT
STOCK companies or associations OF
insurance companies subject 10 the
tax
The law provides also that returns
fshou!a be MADE by those taxed 10 the
treasury department to be used as
lass 20" assessing the iH%' These were
open to .nSpeot!on' hut in 1911 Con-
srcss enacted legislation proNldins
th"t the returns should be open 10 m
,speetion only upon rules and reguIn-
Sons approved by the president
The first action in the courts TO test
The const!tuuonality OF the lew was
begun in the United states circuit
court for the district OF Vermont y
woman began IT. Steiia r. fliht,
guardian OF the property OF samuel
y. stone. Jr,, u stockholder IN ne
stone Tracy Company Hf Windsor
VI. @egan an action to have the COM
panN restrained from paying the taX.
She claimed that the tax was uncOn-