The Birmingham age-herald., 1911-03-14
Justice Day Announces the Unanimous Decision
 of the Court
INSURES LARGE
 FEDERAL INCOME
Justice Day An5wers Various Objec- tions and Suits Filed Against Provisions of Tariff Law
 and Overrules All

nous opinion the supreme court of the United States today held that the cor poration tax provisions of the Payne AL drich act were constitutional Thus ended controversy waged almost continuously since President Taft first suggested their enactment to Congress
 The opinion was announced bv Justice Day. It was an elaborate treatment of the subject, containing approximately 1o.- coo words. About half an hour was spent by the justice in explaining the position aof the court orally to the bar, printed opinion being used as basis for the re- marks.
 The justice first determined that the tax was Just what 1t 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, at more or less length, the various objections urged against the tax as an excise Fi- nally he interpreted the law so as to ap- ply to real estate companies and the so- called public service corporations but not to real estate trusts'
 Practically all of the more than the s27, 100000 assessed for the fiscal year ending June 90, 1910, on corporations in the United States has been paid into the treasury. The exact amount received to February 1, 1911, the latest date for which precise figures are available was SI10s,lS9 The amount assessed last year was s27,13o,9o4. Added to this were pen alties amounting to about sloo,oo0 for fail- ure to pay the tax when due.
 1911 Tax Unknown
 What the tax will amount to this year the commissioner of internal revenue. who has charge of the collection, is not yet abe to determine, even approximately All reports from corporations were due March l, and 1t is believed practically al of them have been received. But work has just been begun on figuring out the assessments which ia the few days since this task has begun have totalled only about s1.500,000. small fractional part of the whole. On or about June 1 these figures will be in the hands of the 67 in- ternal revenue collectors throughout the country who will immediately notify the corporations in their districts of the amount they owe the government for the privilege of doing business Taxes not paid by July 1 will have added a penalty of per cent and interest at the rate of per cent per month for each month they remain unpaid.
 By regarding the tax as measured oy income rather than being a tax on in- come, the opinion seemed. as Justice Day proceeded to hold, that the law was con- stitutional notwithstanding the law might reach the income from non-taxable sources.
 Thereby a source of income of approx lmately s25,000,OOO annually was assured to the government Of all the objections to the tax raised by suits in all parts of the country. none of them was sufficient to nullify the law. The court did not hold that the tax was not applicable 10 the real estate trust of Boston, which was organized, not under any statpte, but under the common law. The law was not held applicable to the Mime sota syndicate, real estate concern, on the ground that it was not doing busi- ness" within the meaning of the law.
 Imposed Upon Corporate Business
 Near the outset of the opinion is the statement that the tax is imposed not upon franchises of the corporations ire spective of their use in business, nor upon the property of the corporation, out upon the doing of corporate or insurance business and with respect to the carving
 
 cent of the entire net income over an1 above 5000 received from all sources dur ing the year: that Is, when imposed in this manner 1t is tax upon doing busi- ness with the advantages which inhere in the peculiarities of corporate or joint stock organization of the character de- scribed.
 'This tax, it Is expressly stated is 10 be equivalent to 1 per cent of the en- tire net income over and above s50ao received from all sources during the year"
 adopted by the statute. The income is not limited to such as is received from property used In the business strictly speaking, but Is expressed to be upon the entire net income above s5o00 jn- come on all sources, excluding the amounts received as dividends on stock in other corporations, joint stock com panies or associations or insurance com panies also subject to the tax.
 Objections Answered
 Justice Day answered the various ob- jections urged against the consti- tutionality of the tax He first took up the contention that it was a direct tax and unconstitutional for the same reasons that the income tax law was decided unconstitutional in 1895. He pointed out that the income tax was held to be direct because imposed upon property simply because of its owner ship.
 Tn the present case" said Justice Day. the tax is not payable unless there is a carrying on or doing of bus mess in the designated capacity and this made the occasion for the tax measured by the standard prescribed"
 Justice Day took up the objection that the provisions in question levied tax upon the exclusive right of state to grant corporate franchises in that 1t taxes franchises which are the crea- tion of state in its sovereign right and authority.
 We think" says the opinion. "it 's the result of the cases heretofore de- cided in this court that such business activities though exercised because of state created franchises are not beyond the taxing power of the United States"
 Justice Day next addressed himself to the objection that the tax was un- equal and arbitrary. He first consid- cred whether, claimed. the law made an unconstitutional distinction between -s>- -f