The Washington herald., 1913-02-02
Income TAXBILL
TO BE ENACTED
Thirty-6ve States Have Rati-
fed Proposed Amendment
to the Constitution. 8
ONLY FOUR ARE OPPOSED
Measure the Democrats Propose to
Pass Possibly VIII Net
$loo,000,o0o
ONLY FOUR ARE OPPOSED

The favorable action Of the West vir-
ginia Legislature Friday on the income
tax resolution means that this amend
ment in the near future will be added to
the Federal Constitution. So confident
are the Democratic leaders in the House
on this subject that they already are
| making preparations for the drafting of
an income tax bill to be submitted to
the special session in connection with
the tariff revision
This income tax measure, 1t was learn
| ed yesterday, will serve as a substitute
| for the Underwood excise tax bill which
was passed by the House at the last ses-
| sion Of Congress. and which was designed
to make up the $50. .Do0,0 900 loss in revenue
occasioned by putting sugar on the free
list
The news that the Democrats will see,
| to enact an income tax bill for the pur-
pose OF meeting cuts in revenue caused
by lowering OF duties came yesterday
soon after the Ways and Means Commit
tee had finished their public hearings and
had set themselves down to the task of
framing the tariff bill which President
Wilson and the Democrats are to present
TO the country at the opening OF the
special session of Congress
The action OF West Virginia made the
thirty-fifth State that has ratified the IN
come tax amendment. Favorable action
by one more State will make 1t a part
of the Federal Constitution. The DEM
ocrats in Congress are looking to the
State of New Jersey to take the final
action on this important amendment.
One branch OF the New Jersey Gegis-
lature already has voted in favor of the
amendment. and the Democrats believe
that the other house will do likewise
within few days. There are. however,
five other State Legislatures now in ses-
sion, which have not as yet ratified the
amendment These are Massachusetts.
Pennsylvania, Delaware. Wyoming. and
New Mexico. At least two Of these i've
are known to be favorable to the amend
ment and are certain to act on 1t before
the Inauguration OF President Wilson.
May Net sIOO,OOO,OOo.
The character Of the income tax meas
ure that the Democrats will seek TO enact
is uncertain at this time, and Gov.
Wilson probably will have a good deal
to say on that subjece Some OF the
Democratic leaders give 1t as their opin-
ion that they will seek to collect S1e0, NJ
61OOo through the medium of the income
tax This means that a relatively low
rate will be fixed. II the rates OF Eng
land, which are high, were adopted In
this country, they would yield about $780,
OOo,ooo
The records of the State Department
show that only four States thus far have
rejected the income tax amendment
These are Connecticut. New Hampshire.
Rhode Island and Utah.
The States that have ratified the
amendment are Alabama. Arkansas. Ari-
zona, California, Colorado, Georgia.
Idaho, Illinois, Indiana. Iowa, Kansas.
Kentucky. Louisiana. Maine. Maryland.
Michigan. Minnesota, Mississippi, Mis-
souri,, Montana, Nebraska, Nevada New
York, North Carolina, North Dakota.
Ohio. Oklahoma, Oregon, South Carolina,
South Dakota. Tennessee. Texas, WASH
iIgton. Wisconsin, and West Virginia.
Alabama was the first State to ratify.
The Alabama Legislature registered its
approval on August II. 1903. New York
ratified the proposed amendment on July
u, 1911.
Representative Hal of Tennessee a
member of the Ways and Means Com
nittee has been the active leader in the
House for several years in the matter
Of an income tax resolution. He viii.
have good deal to do with the drafting |
Of the bill.
Details Are Lacking.
While the details of the income tax
bill are still lacking, the impression |
in Washington is that 1t will follow |
pretty closely along the lines OF the |
excise tax measure passed at the last |
session. The latter measure provided |
for tax of 1 per cent on all net in
comes from business amounting to
$4,000 or over. The word business,
however. was construed to include pro-
fessional, and practically all other ef- |
forts yielding an income. The excise |
tax represented an effort on the part |
of the Democrats to levy an income |
tax by indirect methods. They sought |
to take advantage of the decision of |
the Supreme Court upholding the con- |
stitutfonality of the corporation tax |!
law, and contended that their excise |
tax measure was merely an extension |
of the corporation tax law. The Demo- |
cratic bill, of course, never became a /
law.
The general belief in Washington Is i
that any income tax legislation drawn |
by the Democrats will exempt small |
incomes and will seek to levy the tax |
probably at from $1,000 up. There has |
been some discussion among Democrats /
of a scheme to make the rate higher
on unearned incomes than on earned |
incomes. The former would embrace /
such incomes as are derived from the |
Astor estate, for instance. and by An
drew Carnegie.