The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-03-15
pines But perhaps that would be a
CORPORATION INCOME TAX.

The decision of the United States
Supreme Court affirming the validity
OF the income tax on corporations,
would appear TO clear the way for
reversal of the former decision of the
court iuvalidating the tax upon indl-
vidual incomes. The court holds that
t. tax on the income of corporations
is not direct tax u0on property, but
an excise upon the transaction Of
business. In precisely the same way
law imposing an income tax upon
individuals or firms would logically be
valid also, inasmuch AS il would not
tax the property of the person or the
firm. but only the income from bust
ness done.
This is the precise distinction made
by the Supreme Court in affirming the
validity Of the corporation tax. 1t is
an excise on doing business, and not
a direct tax property,
1t ought not TO be difficult. there;
fore, to draft law that would, in
like manner, be an excise upon the in
come of individuals or firms applying
to the business done by them. and not
direct upon their property holdings
1t appears that certain realty asso.
Citations, whose operations have been
considered by the internal revenue Of
fcials TO be within the purvicw of this
taxation, are EXEMPT from it by this
Supreme Court decision, apparently for
the reason that they were not incor.
porated 1t is difficult TO see, how
ever, why the fact of corporation
should govern in matter of this kind
and probably the insistcncc of the SUI
prcme Court upon that particular point
may he liable to lead to Il new align.
m2nt IN business affairs. In place of
corporations there is likely TO be formed
voluntary associations, such as arc cx-
prcssly exempt from this tax under the
decision. III that should be the result
of this decision, and there would seem
TO be no reason TO doubt it, the de-
.cision, while affirming the corporation
tax rs such is very likely to operate
against the formation and the con
tinuancc of corporations as such. For
voluntary associations can. as a rule,
do business in about the same way AS
rorneratious, and it would appear from
the report of this decision that. if this
change of form becomes general. the
CORPORATION lax Will automatically be.
come obsolete. Thus in undertaking to
hud way TO not disturb the former
decision against personal income tax
at: 4 while affirming the validity of
C,urj Will pro' ably be found TO have
opened the way for the escape of all
corporations from any liability TO the
corporation tax merely by their chang
ing the form of their associated meth
ods of doiag business.
We believe that eventually ,hc Su
prcmc Court Will be obliged by the
logic of the situation TO reverse its
former decision invaldating tho tax on
individual incomes. The more the sub
rect is considered. and the more efforts
That are made to get at the Just tax
alton of incomes, the more 1t will be
proved that the foundation of all is
the right of the government to tax in
comes. whether corporate. associated, or
personal, and that this is power which
it is dangerous 10 deny to the govern
m at. For. without this power of tax
alton, the governmental efforts to de-
rive revenue from the income tax are
certain TO be headed of one by one
until We come back 10 the foundation
principle. which eventually will have to
be affirmed. Expert constitutional law
vcrs have declared their opinion, and
it seems to us that there is no escape
from the logic of their position, that
the inhibition in the constitution
against direct taxation was intended
to apply in forbidding a capitation tax
on slaves. this by reason of the debates
in the constitutional convention, by
declarations and correspondence in the
newspapers at the time, and because of
the connection in which the expression
is found in the constitution itself.
HOMESEEKERS' SToPoVERS.