Omaha daily bee., 1911-03-14
CORPORATION TAX LAW VALID
Supreme Court Unanimously Upholds
COnstitutionslity of Statute.
JUSTICE DAY READS oPIEION
IL Holds that Tax e. Measured By In
cSme Instead OF Being n TAE
On the IBcsme IT.

WASHINGTON. March ax-Ths corpora
tiun tax proViEons q she Psgue-Al6rirh
tariff act were sustained today as consti-
tUt5onsl hy the supreme court q the Uni-
ted States The court was unanimous in
the corporation tax decision. By regarding
fhe tax - FaeaEass.- " tncszns raEher
than being a TAI On thooms- ths upinion
as given by guEtics Dsv proceeded 10 hold
that the Law Was constitutional notwith-
standing the fRw might reach the income
/ from non-tAzsble sources
4 Thereby a source q income Of approx
matsly SIS OOo0oo snnually wAE assured 10
the government
Of ali the objections 10 the tax raised b.
suits IN all parts Of the country none Of
them was found sufficient 10 uuuify the
Law. TIE court did hold that the tax va
not applicable 70 the real estate trust Of
Bcston. which iE organised not under any
statute but Unde- the common law. The
laW wss hf3d not applicable 70 The Mime
Apohs syndicate real estate concern, on
the ground thai q Was not -doing business
within the meaning q the law
Al 12-& Justice DAY began 70 deliver the
decision of the supreme court On the COZ
EritutionElity of the corporation tax Jas
tics Day announced that Il was within the
power Of the senate 10 insert the corpora
ton tax provision IN the tariff law which
originated in the house and o. which the
tax provisions are a pirrL
Justice Day said. as il appeared 70 tAsHe
Z who listened 10 him. that the court held
I ths tax ar an excise tax on the doing OF
Z businss8'' which ts exactly the basis On
wh3ch the government has defended the
law
I Justice Day next held that the tax pro
visions we're nol arbitrary exercise of a
power. This Was urged b argument as
one reason Why me Law should bs held
EnoonsgiJu1ionEL
Tax on Corporate Business.
Near the outset o. the Opiuion a. il sp-
pesrs IN printed form is the statement thai
ths tai Is imposed moi upon the fran
chisss q ths corporations. irrsspsctirs q
their use IN business. nor upon the prop
srry Of the corporations. but upon the DO
4 ing Of corporate OF Insurance. business and
with respect 70 the earring on thereof
In q sum equivalent 70 i psr csnrum Of
4 the entire net income over and above
Z s. 0Sa received from al sources during the
year, thai is. when imposed IN this man
nsr II Is TAX upon the DONG q business
with the advantages which lnhere in ths
/ lpecuiizriuies o. corporate or JOHN stock or.
2
As the lEus- organizations share NAM
I bsnsfits Of corporate urganiEztion d mar
I b. described generally as a tax upon ne
lluang o. business ~ q cooperate capacity
Itls rEE, u Is expressly stated Be- 70 be
equivalent 20 ] per aentum o. the entire
net income over and above SsB85 received
from al sources during the year-this L
lths measure q The tEx explicitly adop1et
b. ths statute
The income Is not limited 10 such Al
- received from prur.erJy used in tllc tus.
iDess. strictly speaking but is expressly Dc
iclared 70 b. On the entire net income ab8r,
S5.8o from al sources ezeludiuE IN,
IaEnounts received a. DIVIDENDS On sroeE 4
other corporations. Joint stock oomuarie1
iUr associations, or Insurance comuari q
also subject 70 the TAX Ia Orhsr vords
TIE tai is imposed On the dong q bushes
iuf the character described and the rDtss5-.
q ths tAE b 10 b. the income ufth IN.
deduction stated reoHired nur only from
property useo in business, but from even
source.
TINS F1e~ Of the treasure q ths TAX is
strengthened Ehsn Es note tlsl a. ID
Organizations under the iass q f1relEl
countries the amDlnr q net income owe.
and above E-6aa incIudss tha- received from
business rranzsctiuns and capital llreste1
in ths Tinted staies tle territories Alaszs
and Dlstriet q Columha
Af-sT Justice Dsg hzd thus sven lh.
lntsrErstHton Ehich the cuzrI had pzr CO
rhs puoyisiouE q ths art ~ proceeded o,
answer ths Var1ols ob5ectioHs urged szIus
ths conslltuiionHltg - the tax he frs.
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