The evening world., 1911-03-13

ing ore lands and collecting royalties
managing wharvcs. dividing profits. and
In some cases investing the surplus are
engaged in doing business within the
meaning of his statute and, in the ca
pacity necessary to make such organlza-
lions. subject to the law"
After dealing at length with numer-
ous other objections to the law. Justice
Day came to the attack upon II based
on the co-called publicity features OF
the provisions which require certain re-
turns to be made to the government.
as an aid In the assessment OF a tax.
"The taxation being. ~ we have
held" said the Justice, within the legi-
Innate powers OF Congress. II Is FOR
that body to determine what means arc
appropriate and adapted TO the purpose
" making the effectual.'
The opinion thus summarized covers
fifteen OF the eighteen cases In which
the constitutionality of the tax was as
sailed. Tho non-appllcability Of the act
to the real estate trusts was decided in
the other three cases.
The fight against the constltutlonallty
of the corporation tax began almost i'm
mcdiately after the enactment OF the
Payne-Aldrich Tariff law OF 1908, or
which 1t Is "A part. During the long days
OF %wrangling in Congress over tina
measure. President Taft originated "A
plan to raise part OF the revenue ncces-
sary for the running of the Government
by imposing "A corporation tax. lie Is
said to have made the first rough draft
OF the proposed law and to have asked
the Department OF Justice TO perfect t..
Scarcely fifteen years before the SUI
premc Court Of the United States had
declared unconstitutional the Income
Tax measure enacted by Congress, In
order to have IA valid tax. the errors Of
tina law had to be avoided. Finally the
attention of members OF the HOUSE and
Senate was called to the proposed Cor
poration tax as 0 constitutional measure
II WIS urged as preferable TO another
income tax which, Il was argued. prob.
ably would be declared unconstitutional
and n under the circumstances better
legislation than an inheritance tax.
When the Tariff bin was In the Senate
the corporation tax provisions were IN
serted as an amendment to the Payn,
bill passed by the House, They REMAINED
there and became u part OF the Tarin
act.
{ Those Who Pay the Tax.
The provisions OF the law stated tina
} the tax was a special excise tax witt
respect 20 the carrying on or doini
business" Ii was TO be paid by "ever.
corporation. Joint stock company %
association, organized for profit an,
having a capital stock represented b,
shares, and every Insurance company
organized under the laws OF the Unite,
= States or OF any state or Territory.
. II was provided that the tax Shout
: be equivalent to ono per centum upl.
the entire net income over AnG aboy
5000 received from all sources eXclu
4 s,ve o, amounts received as dividend
upon stock OF other corporations, jolu
stock companies, or associations, or In
suranee companies. subject TO the tax.
c The law provided also that return
should be made 10y those taxed to IA
"a Treasury Department, TO be used as
basis for assessing the tax. These wer
Il open to inspection, but I'm 1910 Congres
enacted legislation providing that n
- returns should he open to inspection onl
rs upon rules and regulations approved b
N the President.
Woman Started Flight.
Fifteen cases attacking the constltl
IS tionality OF the law were begun I'm con-
the first by u woman. Stalla j. FIlf
guardian OF the property OF Samuel
stone ST.. n %stockholder In tho Stol
b. Tracy Company of Windsor. VI.
ms The constltutionality OF the tax W
d. attacked from all points from WA.
lie any tax possible Of enactment by 60
gress could be- attacked, Prominc
~ among the objections to the law "
the argument that the tax was IA llr,
~, tax, not apportioncd. according to |
III constitution. Some dubbed the tax
corporation income tax and invalid
-, the same reasons that the income [
H. was declared unconstitutional In IS