Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-03-02

| this tax x107 100000 annually. The $52,-
0O0,0O0 collected in 1911 were paid to the
government and the custom houses, and
the remainings $5J, 100000 were paid to
the producers and refiners.
Profits Due to Tariff.
"From the Investigations made by the
ways and means committee and those
made by the special committee appointed
by Congress at this session to investigate
the sugar trust 1t is believed the large
profits that have been made In recent
years in sugar by the manufacturers and
retiners have been due to the customs
! tariff. Placing sugar on the free list will
| reduce their profits. but 1t will not de-
stroy the industry in the United States,
and will result i'm a saving to the Amer
lean people of S1O1, 100000.
The removal of all taxes at the custom
| houses will of course reduce the revenue
that the government needs by $4,000. 600.
and 1t was necessary for the committee on
| ways and means to provide other sources
of revenue to take the place of the loss
| from the removal of taxes on sugar. To
| accomplish this result the ways and
means committee have determined to pre-
| sent to the caucus a bill extending the
present excise tax on corporations to in
dividuals and co-partnerShipS. The SUI
preme Court of the United States, not
withstanding its former decision holding
L tIidl ali income TAX was
has maintained the constitutionality Of an
excise tax levied on all corporations doing
business in the United States. The Su-
preme Court has decided that the Con-
] gress has the power to levy special ex-
| else tax on the doing of a particular buSi-
ness, whether that business is conducted
by an individual or a corporation, and In
| the case of Flint versus the Stone Tracy
Company, in which they held that the cor
pOration tax was constitutional, they de-
c10o0 that the Congress had the power TO
| levy a special excise tax on the doing OF
all business by corporations. The purpose
! of the. bill presented to the caucus is to
extend the tax on the doing of business
by individuals and cO-partnerships.
Conforms to Courts Ruling.
''The special excise tax bill will accom-
plish the same result as would have been
accomplished by an income tax if it were
| within the power of Congress to enact
an income tax so far as raising the rev.
enue is concerned. but at the same time
the bill keeps well within the principles
laid down by the court in its decision af-
firming the constitutionality of the cor
poration tax law. The bill does not in
4 any way alter. amend or repeal the cor
poration tax law as it now stands on the
| statute books, but provides that, every
person firm or co.partnership shall be
! subject to pay annually a special excise
| tax with respect to the carrying on or do
| ing business by such person equivalent to
| l per cent upon the entire net income
over and above $4,000 received by such
person from all sources during each year.
and further provides that in computing
the income Of any persons there shall not
be included the amount received from any
corporation, joint stock company or assoc
citation or insurance company as divi-
dends upon the stock in such corporation.
IN CT In IN
surance company if the special excise tax
of per cent now imposed by law has
been paid by such corporation, joint stock
company or association or insurance COM
pany,. In other words. the income derived
from dividends Of a corporation on which
the tax is now levied by law will not be
subject to a further or additional tax,
but incomes derived from other sources
poration tax act will be subject to tax
of / per cent per annum where the net
income exceeds 5000 annually. Under
the present law persons who have their
employing labor and developing the coun-
try are taxed l per cent on the net earn
ings of the corporation. !
Alleged Inequality.
why is it not as equitable and just to
impose similar tax on individuals whose
money is invested in lines of business not
organized as corporations? Under the
present law the stakeholder in a corpora
ton is compelled to pay a tax; the bond
holder. who as a rule takes little or no
| risk in the business, is not taxed. If the
bill becomes a law the bondholder can be
taxed on the same basis as the stock
holder. The levy of this tax is not excess
! sive; a man having an income of $1,000
would pay no tax on the first 5000 and
| on the second 5000 would pay only $50 a
year. and yet from the estimates made
! we feel assured that the levying of this
| tax will produce q revenue for the gov
eminent that will equal that lost by the
repeal OF the tax on sugar.
'1f these bills become laws they will
have repealed a burden of taxation now
borne by the American people on food
product that all must consume of $780,
100000 and will have substituted in place
thereof taxes that will probably aggre
! gate between $50 100000 and SOC, 600 900
that will be collected from persons having
| incomes of more than 5000.
| raise each year between 500. 0OO, 900 and
$500, 100000 by taxation. The present
! corporation tax raises about $40 OOO. 600.
| and IL the special excise tax on individ-
| uals raises $6OOO0,0OO more. it will only
place a direct burden on the wealth Of
|. the country of about $90.OOO.O0O. as COM
pared with 500, 100000 or $500, OoO 900
| that we must raise to support the gov
eminent AS the wealth OF the country
receives great benefits from the mainte-
nance Of the government it Is not believ-
| ed that the collection Of this amount Of
| taxes from this source will be regarded
as unjust.
Demand for Free Sugar.
| 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 be reduced to
| some extent The removal of this tax
! will bring relief to all, no matter how
| humble, no matter how poor, and the
! burden will be shifted to those who are
possessed of more than comfortable for,
tunes and can bear the additional tax
| without serious Inconvenience
/ THE Underwood bill provides that in
| computing incomes the necessary ex-
/ peuses actually incurred in carrying on
| any business. but not personal or living
| expenses, shall be deducted: also all in
|. terest paid within year on existing in
debtedness and national, state county,
| losses sustained during the year in trade
| or arising from fires, storms or ship
| wreck: and, finally, debts ascertained to
be worthless. No deduction, however,
shall be made for any amount paid for
new buildings, permanent improvements
or betterments.
"Furthermore the bill provides that only
| one deduction of 5000 shall be made