Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1911-03-21
TAX LAW IS UPHELD
UNITED STATES SUPREME COURT
HOLDS CORPORATION TAX
is CONSTITUTIONAL.
LONG CONTEST AT AN END
Justice Day Reads Decislon-Law Pro-
vldes That All incorporated Bodies
Shall Pay Tax on Net Income
Above $4,000.

ABOVE S5,COO.
Washington.-Wit dissenting
| opinion the Supreme court of the Uni
led States Monday handed down its
decision holding the corporation tax
law constitutional. Thus ended a con-
troversy waged almost continuously
since President Taft suggested its
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 1y it's affirma-
ton the revenues of the national treas
nry are increased annually more than
| S25,000,0o0 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 indicated 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 rain 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 a power.
This was urged in argument as one
reason why the law should be held I'M
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 the
country none of them was found suf-
ficient to nullify the law.
Near the outset OF the opinion is
the statement that the tax sis 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 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 it 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, sis
4 moi 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
IRE of the tax is to be the income with
/ the deduction stated, received not
only from property used in business,
/ but from every source"
4 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
4 because imposed on property simply
/ because of its ownership.
I'm the present case" said Justice
/ Day, 1.-The tax is not payable unless
| there is 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-
/ tutional distinction between the cor
| porations and partnerships or indi-
viduals He said there was sub
stantial difference between the carry
/ ing on of business between corpora
/ lions taxed and the same business
when conducted by a private firm or
! individual.
Measurement of the tax by the net
income of the corporation or the com
7 pany 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.
~