The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1911-03-17
CORPORATION TAX IS
SUSTAINED
FEDERAL SUPREME COURT SEES
NO REASON IT SHOULD.
NOT STAND.
opinion Announced by Justice Day
and concurred in BY All the JUS.
- y 9e4M 2snr 81 xeI plsH-saoI3
Claimed to Be, an Excise Tax.

''ss 800 - 81 PlvH S~S*
claimed to Be, an Excise Tax.
washington, March 14.-In a unani-
nous opinion the supreme court Of
the United States yesterday held that
the corporation tax provisions of the
Fayne-Aldrich tariff act were consti-
tutlonal. Thus ended a controversy
waged almost continuously since Pres
ldent Taft first suggested the enact
ment to congress.
Ihe opinion was announced by JUS
tlce Day, appointed to the supreme
court from Ohio in 1903. 1t was an
elaborate treatment of the subject.
About half an hour was spent by the
justice in orally explaining to the bar
the position of the court, the printed
opinion being used as basis for the
remarks.
Tax Is an Excise.
The justice first determined that the
tax was just what it was claimed to
be in the act, namely, an excise tax on
the doing of corporate business, and
not direct tax on the ownership of
property. With that point decided
the justice took up the objections
urged against the tax as an excise.
Finally he interpreted the law SO as
to apply to real estate companies and
the so-called public service corpora
lions, but not to real estate trusts"
Taxes Paid In.
Most of the more than $27, 0O0, 900
assessed for the fiscal year ending
June 80, 1910, on corporations in the
United States has been paid into the
treasury. The exact amount received
up to February /, 1911, the latest date
for which precise figures are avail
able, was $27,1o8,189.
The amount assessed last year was
$27,13O, 904.
Added to this were penalties
amounting to about 100000 for fail
ure to pay the tax when due.
What the tax will amount to this
year, the commissioner of internal
revenue is not yet able to determine.
All reports from corporations were
due March /, and it is thought that
nearly all of them have been re-
ceived. But work has just been be
gun on figuring out the assessments
On or before June /, these figures
will be in the hands of the sixty.
seven internal revenue collectors
throughout the country, who imme
diately will notify the corporations in
their districts of the amount they owe
| the government for the privilege OF
doing business, the taxes not paid by
July 1 will have added a penalty of s
per cent and interest at the rate of
per cent month for each month they
remain unpaid.
Will Hasten Bonds.
The corporation tax decision will
hasten the impending issue Of Pana
ma bonds. It was one of the things
Secretary MacVeagh has been wait
ing for. Had the case gone against
the government, bonds would have
been issued to meet the refund to the
corporations.
1t now seems likely that Secretary
MacVeagh's call for bids on the new
securities will announce the amount
of the issue at $50,000,000 and that the
call for bids will go out before April l.
Securities Go High.
Treasury officials think the price Of
the new securities will be higher than
is expected. Under the law they can
not be issued at less than par. AS
they will be absolutely free from taxa
ton, the bonds will be the highest
revenue producers the government
has.
The per cents of 1925 net only 2.6S
per cent. The new SO could be mar
keted at figure as high as 114.24
land still pay 2.3O net.
Figures Described.
That, however, is thought unlikely
If marketed at 106.78 they would
bring 275 and even as low as 100
they would pay 2.SS net, higher rate
of interest than is now paid, net, by
| any other government bond. The net
price of the present IS, which have
the circulation privilege attached, is
more than 1O2.
1t is the present plan of the treas
ury department to give first considera
ton to the small investors in making
the issue.
Near the outset of the opinion, as IL
appears in printed form, is the state
ment that the tax is Imposed, not
upon the franchises of the corpora
tons irrespective of their use in bust.
ness, nor upon the property of the
! corporation, but upon the doing of cor
porate or insurance business and with
respect to their carrying on of sum
equivalent to one per cent Of the en-
| TWO-PATS-14 49,. 80. 80. s..
tire net income over and above $4,000
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
| inhera in the nncu1iaritica az cOrnor.