Wauwatosa news. [volume] (Wauwatosa, Wis.) 1900-1948, 1911-03-17
TAX LAW IS UPHELD
UNITED STATES SUPREME COURT
HOLDS CORPORATION TAX
is CONSTITUTIONAL.
LONG CONTEST AT AN END
Justice Day Reads DeclsIon--Law Pro-
Vides That All Incorporated Bodies
Shall Pay Tax on Net income
Above $1,000.

ABOVE 5000.
Washington.-Witho q dissenting
opinion the Supreme court of the Uni.
ted States Monday handed down its
decision holding the corporation tax
law constitutional Thus ended a con-
troversy waged almost continuously
since President Taft suggested It's
enactment to congress-.
Justice Day read the decision in the
corporation tax case suits testing the
law having been brought from every
section of the country. BY it's aff1rma-
ton the revenues of the national treas
ury are increased annually more than
S26,OOO,0O0 from the tax on the net In
comes OF corporations doing business
for profit, in addition to which the
principle OF the right to levy such
tax is vindicated and. the most OF all.
that for which the government has
been striving access to the books Of
the big corporations and full publicity
with regard to their affairs is abso-
lutely assured.
The main points of the opinion. as
read by Justice Day, are:
1t was within the power of the SEN
ate to insert the corporation pro
visions in a tariff law which origina-
ted in the house.
The tax is an excise tax on the do
ing of business which Is exactly the
basis on which the government de-
Tended the law.
The provisions of the law are not
the arbitrary exercise of power
This was urged in argument as one
reason why the law should be held un-
constitutional
The tax is regarded as measured by
income rather than being a tax on in
come.
OF all the objections to the tax
raised by suits in all parts of this
country none OF them was found suf-
ficient to nullify the law
Near the outset OF the opinion is
the statement that the tax is i'm
posed not upon the franchises OF the
corporation, irrespective of their use
In business, nor upon the property of
the corporation, but upon the doing Of
| corporate or insurance business, and
with respect to the carrying on there
of In a sum equivalent to one per
/ centum of the entire net income over
and above $4,000 received from all
sources during the year-that is, when
] imposed in this manner, 1t is a tax
upon the doing OF business with the
| advantages which inhere In the pc
| culiarities of corporate or joint stock
| organizations of the character de-
| scribed. AS the latter organizations
share many benefits of corporate In
terests 1t may be described generally
! as tax upon doing business In cor
| porate capacity"
The tax is one per cent. Of the en-
tire net income over and above $4,000
! received from all sources.
/ THE income" said Justice Day, "is
not limited to such as Is received from
! property used in the business strictly
| speaking, but Is expressly declared to
| be upon the entire net income above
| $4,000 from all sources excluding the
amounts received as dividends on
| stocks in other corporations, joint
! stock companies or associations, or In
surance companies also subject to the
| tax In other words, the tax is i'm
/ posed upon the doing of business of
| the character described and the meas
ure of the tax is to be the income with
| the deduction stated. received not
| only from property used In business,
but from every source
| Justice Day drew the distinction be
| tween the corporation tax and the for
mer income tax law, which was de-
| clared unconstitutional, in answering
objections that had been raised
against the corporation tax He said
the income tax was held to be direct
because imposed on property simply
because of its ownership
In the present case" said Justice
Day. 1.-The tax is not payable unless
| there is a carrying on or doing Of bust
mes in the designated capacity and
| this is made the occasion for the tax
measured by the standard prescribed
The difference between mere owner
ship of property and the actual doing
| of business IN certain way
| Justice Day first considered whether,
as claimed, the law made an unconsti-
| tutionaI distinction between the cor
porations and partnerships or indl-
yiduals. He said there was a sub
stantial difference between the carry
Ing on of business between corpora
| tions taxed and the same business
( when conducted by private firm or
| individual.
Measurement Of the tax by the net
income OF the corporation or the com
Uany received by it from all sources
was defended by Justice Day in his
opinion as not being so unequal and
So arbitrary and baseless as TO fall
outside OF the taxing power.