The Birmingham age-herald., 1911-03-14
CORPORATION TAX STRONGLY UPHELD
 BY SUPREME COURT
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CONTINUED FROM FACE n corporations and partnerships, or in- dividuals. 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 a private firm or individ- ual.
 1 The thing taxed said he, lis not the mere dealing in merchandise, in which the actual transactions may be the same whether conducted by in dividuals or corporations, but the tax is laid upon provisions which exist in conducting business with the advan- | tages which inhere in the corporate capacity of those taxed and which are not enjoyed by private firms or in dividuals,
 Has Advantages
 These advantages are obvious and have led to the formation of such com panies in nearly all branches of trade The continuity of the business without Interruption by death or dissolution, the transfer of property interests by the disposition of shares of stock, the ad vantages of business controlled ant managed by corporate directors, the general absence of individual liability these and other things inhere in the advantages of business thus conducted which do not exist when the same bus | mess is conducted by private individ- | uals or partnerships.
 | It is this distinctive provision which ii | the subject of taxation, not the mere | buying or selling or handling or goods which may be the same whether dons | by corporations or individuals. Measurement of the tax by the net l income of the corporation or company re- ceived by it from all sources was nexi defended by Justice Day in his opinion as not being so unequal, and so arbi- | trary, and baseless as to fall outside o1 the authority of the taxing power. Justice Day said it was especially plar that certain of the corporations whose stockholders challenged the validity o1 | the tax were so-called real estate com | panies.
 "We think 1t clear he said, that cor. porations organized for the purpose oi doing business and actually engaged il such activities as leasing property, col lecting rents. managing office buildings making investments of profits or leas 1 ing ore lands and collecting royalties managing wharves. dividing profits and | in some cases, investing the surplus, art engaged in doing business within th' meaning of the statute and, in the ca pacity necessary to make such organiza tions subject to the law
 Covers Fifteen Cases
 The opinion covers 15 of the IS case. in which the constitutionality of the ta,
 was assailed. The non-applica ability of h'
 act to the real estate trusts was decided | in the other three cases.
 The decision of the supreme court iI
 upholding the constitutionality of the cor
 poration tax laws relieves the govern ment from an embarrassing situation Had the law been declared unconstitu tional and favorable to the corporations the government would have to return {, ,279 corporations an aggregate of nor, than $26 900.000 paid by them into the fed
 eral treasury by operation of the law an, an issuance of government bonds prob ably would have been found necessary l These 262,219 taxable corporations had : capital stock represented by $52 371, 1926, ,752 their bonded and other indebtedness wa | $31, ,3s3, ,952, 696, and their net income wa | 8, ,125, 491 ,101.