The Washington times., 1911-03-21

When the Supreme Court the other
day. by unanimous vote. upheld the
corporation tax law in one of the
most sweepings decisions for the
Government ever given. 1t put into
the hands of Congress a weapon for
the regulation of corporations whose
nature is as yet but little appreciated
or understood.
1t is the opinion of officials most
competent to pass Judgment on the
effect of this decision that 1t opens
the road wide to Government regula-
ton of corporations, more especially
of the great corporations in interstate
business. OF course, the corporation
tax decision gives the Government
the same right of taxation of the
small corporation, doing business
within State lines as of the great in
terstate corporation. But the prob
lem looming before Congress Just
now is that of regulating the great
corporations whose business overlaps
State lines.
Graduated Tax
One important fact in connection
with the corporation tax decision
which has been given no attention
publicly is that the ruling of the
court opens the way to a progressive
or graduated tax. The corporation tax
today is levied equally on the large
corporation and the small one. But
there is no question that a graduated
law would stand the test of the
courts. At least that Is the view ex-
pressed by officials competent to
judge of this matter. If Congress
wants to, it can impose a much
higher tax, for instance, on corpora
uons whose earnings are above a
million dollars a year than on those
whose earnings are less than that
figure.
1t is apparent that II Congress can
impose graduated tax on corpora
tons it holds club over the heads OF
the great corporations. generally re-
ferred to as trusts, and combinations,
and monopolIes, that can be so Nielded
as to drive them into compliance with
any regulative legislation which NAV be
enacted. 1t is easy to conceive of Con-
gress enacting a corporation tax law
so graduated as to make It utterly out
OF the question for a great combina-
exist. That the Government has the
power to do this cannot be doubted N
the light of the corporation tax de-
cision, II the opinion of officials who
have given most careful study to the
question be correct.
Publicity Attacked.
In their fight against the corporation
tax, the publicity feature was one Of
the things attacked by the corporations.
But the Government contended that
Congress had a perfect right to know
the secrets of the business a CORPORA
tion was doing. The Department of
Justice took the position that the tax
assessor has the right to go into a
mans home and find out all about his
property. and that 1t was absurd to
suppose the Government could not OBJ
tain the facts with respect to a COR
poration's business. The Supreme Court
upheld the publicity features of the law,
as 1t did the other features. No ques-
ton whatever exists of the right Of the
Government to get at the facts as to
earnings, and in the
knowledge thus afforded the Govern
ment there Is given handle for regu-
lation purposes of the utmost value.
The present Congress undoubtedly is
going to give serious consideration t.
the question of regulation of the great
interstate corporations. The problem is
more and more pressing for solution. a
number Of members Of Congress are
to take the question up ac-
lively and urge legislation on it. The
demand for such legislation is getting
stronger. That the corporation tax de-
cision clothes the Government with i'm
portant powers which will make regu-
iation Of corporations much easier Is
hardly to be doubted. Many of the
great corporations are already willing,
some of them anxious, for strict Gov
ernment regulation. Others are hostile
TO it. But those hostile to it are not in
4 position to fight against 1t IL the Gov
stands ready to use the re-