The sun. [volume] (New York [N.Y.]) 1833-1916, 1912-03-02

pAy the Government at the custom
hotises and TO the producers and refner
Of sugar in the United states by reason o
this tax si07 .O00. 900 annually. The So.
0Oo 900 collected in 1911 we're pa Id to the Gov
ernnsnt and the custom houses. and tn
remaining sss.O00.O 900 were paid to th
producers and refiners.
From the Investigations made by th
Ways and Means Committee and thos,
made by the special committee appointe,
by Congress at this session to investigat
the sugar trust II is believed the larg,
profits that have been made in recent year
In sugar by the manufa cturers and reiners
have been due to the customs tariff. Plac
Ing sugar on the free list will reduce thei
pro6ts. but It will not destroy the industr,
IN the United States. and will result In q
saving TO the American people OF siO5 :,
O0o,00o.
The removal OF all taxes at the custom
houses will OF course reduce the revenue
that the Government needs by S55, 400 900
and u was necessary for the Committee or
Ways and Means TO provide other sources
Of revenue to take the place Of the loss from,
the removal Of taxes on sugar. To ac-
complish this result the Ways and Means
Committee have determined to present ia
the caucus a bill extending the present
excise tax on corporations TO individua Is
nhu VVpdTtHtTsHlps. lie supreme tOuTt
Of the United States, notwith sta ndins its
former decision holding that an income
tax was unconstitutional, has maintained
the consttutionalitv OF an excise tax levied
on all corporal ions doing business in the
United States. The Supreme Court has
decided that the Congress has the power
70 levy special excise tax on the doing of
a particular business whether that busi-
ness In conducted by an individual or a cor :
poratton. and in the case OF Flint versus
the Stone Tracey Company. in which they
held that the corporation tax was consti-
tutional. they decided that the Congress
had the power to levy a special excise ia Z
on the doing Of all business by corpora
tions. The purpose of the bill presented
to the caucus Is to extend the tax on the
doing OF business by individuals and CO.
partnerships
The special excise tax bill will accomplish
the same result as would have been accom-
plished by an income tax IL il we're within
the power OF Congress to enact an income
TAX so far as raising the revenue IL con-
cerned. but at the same time The bill keeps
we'll within the principles laid down by the
court in its decision affirmins the coustitu-
tionality OF the corporation tax law. The
bill does not in any way alter. amend or
repeal the corporation tar law as IL now
stands on the statute books, hut provides
that every person. hfm or copartnership
shall be subject to pay annually n special
excise tax with respect TO the carrying
on or doing business by such person ea,va-
lent to per cent upon the entire net income
over and above 5000 received by such
person from all sources during each year.
and further provides that in computing tho
income OF any persons there shall not be
included the amount received from any
fiop mint sfnrE
citation or insurance company as dividend
upon the stock in such corporation. joint
stock company or association or insurance
company II the special excise tax OF | per
cent. now imposed by law has been pa i'd
by such corporation. Joint stock company
or association or insurance company In
other words. the income derived from diy-
dends OF a corporation on which the tax
y now levied by law will not he subject
TO further or additional tax. but income.
derived from other sources Of business than
those named in the corporation tax act
Will be subject 10 tax OF per cent. per
annum where the net income exceeds 81, 900
annually. Under the present Law persons
who have their money invested in corpora
tions that are employing labor and develop
ing the country are taxed per cent. on the
net earnings OF the corporation.
Why Is 1t not as equitable and just to i'm
rose similar tax on individuals whose
money Ia invested in ines OF business not
organized as corporations? Under the
present law the stock holder in a cor
poration 10 compelled TO pay tax the bond
holder. who as a rule takes little or no risk
n the business. is not taxed. IL the bill
becomes a law the bondholder can be ia ed
on the same basis as the stockholder The
levy OF this tax is not excessive. a man
having an income Of $40 900 would pay no
tax on the first 81. 900 and on the second
s5, 900 would pay only $50 a year and yet
from the estimates made We feel assured
Z hat the lev.inS OF this tax will produce a
revenue for the Government that will equal
that lost by the repeal OF the tax on sugar.
II these bills become laws they will
have repealed burden OF taxation now
borne by the American people on food
product that all must consume of si07 900
900 and will have substituted in place thereof
taxes that will probably aggregate bet ween
$50, coo 600 and 500 900 900 that will he col
iected from persons having incomes of
more than $1,000
II is necessary for the Government TO
raise each year between 500, ,UOO. 900 and
$500. .c0o. 900 by taxation. The present cor
poration tax raises about $50, ,OOO. 900, and
II ths special excise tax on individuals
raises $50 o00. 900 more il will only place a
direct burden on the wealth of the country
Of about S90. 600 900. as compared with
ZOO 900 900 or $500 600, 600 that We must
raise TO support the Government As the
wealth OF the country receives great bene-
hts from the maintenance of the Govern
ment IL is not believed that the collection
Of this amount of taxes from this source
will be regarded as unjust
There has been a universal and general
demand coming from all parts OF the United
states for free sugar. that the high cost Of
living may he reduced TO some extent.
The removal Of this tax will bring relief
10 all. no matter how humble no matter
how poor. and the burden will be shifted
10 those who are possessed OF more than |
comfortable fortunes and can bear the |
additional tax without serious inconven-
ence.
The Underwood bill provides that in |
computing incomes the necessary ex-
pepses actually incurred in CARRYING on |
any business. but not personal or living |
expenses. shall be deducted; also all in
erest paid within a year on existing in |
iebtedness and national. State, county.
school and municipal taxes, as well as
oesee sustained during the year in trade |
" arising from fires. storms or shiDwreck: |
md, finally, debts ascertained to be worth |
less. No deduction. however, shall he |
made for any amount paid for new build |
ngs. permanent improvements or bet |
.erments. |
Furthermore the bill provides that onlv |
one deduction Of IS. ono shall be made from |
he aggregate income of all the members |
ii any family composed of one or both |
parents and one or more minor children or |
husband and wife. Guardians shall he |