Las Vegas optic. (East Las Vegas, N.M.) 1908-1921, 1911-03-13
RENDERS FINAL DECISION
~DlsPosEs OF IMPORTANT LITI-
CATION INAueURATED IN A
VERMONT COURT
WOMAN STARTED FIRST CASE
MRS. STELLA p. FLINT RESISTED
ITS PAYMENT AND OTHERS
FOLLOWED SUIT

WdsuluSJoH, March l3.-Ine Su
preme Court of the United States
in an opinion handed down today
upheld the constitutionality of the
corporation tax provisions in the
PayneAldrich tariff law. The court
was unanimous in it's decision. BY
today's decision a source of income
approximating $25.OOO.OOO annually is
secured by the government.
The fight against the constitution
ality of the corporation tax began al
most Immediately after the enactment
of the Payne-Aldrich tariff law of
1909 of which it is part. During
the long days of wrangling in con.
gress over that measure President
Taft originated a plan to raise part
of the revenue necessary for the run.
ming of the government 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
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 a valid tax,
the errors of that law had to be avoid
ed. Finally the attention OF the men,
bers of the house and senate were
called to the proposed corporation tax
as constitutional measure. 1t was
urged as preferable to another in
come tax which, it was argued, prob
ably would be declared unconstitu-
tional and as under the circumstan-
ces better legislation than an inheri-
tance tax. When the tariff bill was
in the senate, the corporation tax
provisions were inserted as an
amendment to 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 tax was special excise taZ
with respect to the carrying on or
doing business" 1t was to be paid
by "every corporation, joint stock
company or association, organized
for profit and having capital stock
represented by shares, and every In
surance company" organized under
the laws of the United States or OF
any state or territory. 1t was prov1d-
ed that the tax should be equivalent
to one per centum upon the entire
net income over and above $4,000 re-
ceiyed from all sources exclusive OF
amounts received as dividends upon
stock of other corporations,joint stock
companies, or associations, or insur-
ance companies, subject to the tax."
the law provided also that returns
should be made by those taxed to the
treasury department, to be used as
a basis for assessing the tax. These
were open to inspection, but in 1910
congress enacted legislation providing
that the returns should be open to
insuection only upon rules and reg
ulations approved by the president
The first action in the courts TO
l..
test the constitutionality of the law
was begun in the United States circuit
court for the District of Vermont. A
woman began it. Stella P. Flint,
guardian of the property of Samuel
N stone. IT., stockholder in the
Stone Tracy company, of Windsor,
VT. began an action to have the
company restrained from paying the
tax she claimed that the tax was
unconstitutional. Her attorney, Max
we'll Evarts, brought the case to the
s,,nreme court, after the circuit court
had declined to hold the tax uncon-
stitutional.
When the stone Tracy case came
nm for argument before the supreme
court in March, 1910, fourteen other