New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-07-19
Senator Root Contends Levy
Cannot Be Made Till Bill
Has Been Enacted.
RETROACTIVE IN EFFECT
CONSERVATION Among Demo
cratic Leaders Who Cal
culated on Revenue
from March /.
lrron Tho Tribune Bureau. J


dropped a bomb Of large proportions
among the Democrats Of the Senate to-
day I'm the form of a purposed amend-
ment 10 the tariff bill making the in
come tax applicable solely TO incomes
accruIng from the date Of the passage
of the measure. instead Of from March
l, and supporting 1t with what they
feared was an unanswerable argument.
Senator Root contends that the gov
eminent is without authority TO collect
a tax on incomes Gccruing from March
!, because such legislation would be
retroactive, and as such forbidden by
the Constitution. Privately, the Demo-
cratic leaders admit that II, as they
fea-, Mr.. Roots contention IS correct
their carefully calculated plans for
raising revenue will so all ewry. in-
stead OF q surplus Of something more
than $4,000. 900. as estimated in the
report OF the majority Of the Finance
Committee to-day, they will face q de-
ficiency OF s36,O00,OO and some other
method Of raising revenue must be de-
viscd.
The Finance Committee estimates
the revenue from the income tax ut
IS, 1893 900 a month, but the bill provides
for the imposition Of this tax on all in
comes received since March l, 1918.
The most optimistic estimate of the
Democratic leaders is that the tariff
bill will not become law before Sep
TENDER Is. III Mr.. Roots contention is
correct, II will mean loss of revenue
from this source for six and half
months, which, according to the Demo-
cratic estimate would be S37.904,500.
Veritabe CONSERVATION.
1t is violating no confidence to say
that Mr.. Roots contention has pro-
duced CONSERVATION among the Demo
cratic leaders, who, although unwilling
to admit it, fear that the argument Of
the. Senator from New York is impreg-
nable.
The reason l think it would be wise
to MAKE the changes / suggest said
Senator Root quietly, lis that all direct
taxes must be apportioned unless they
come within the income tax amend
ment to the Constitution. When in
come has been received il Immediately
becomes principal and il cannot be
taxed without apportionment. Income
received a month ago is no more to be
classified as such than income received
ten years ago. IL has all become cap
ital. Consequently, the government
has no more authority to levy direct
tax upon income received month ago
than ii has to impose a tax upon in
come received ten years ago"
Senator Simmons, chairman Of the
Finance Committee, was not present,
but Senator Stone. acting in his stead,
received the amendment in much the
same spirit in which it was presented.
The Finance Committee" Senator
Stone said, gravely, would be glad to
have a suggestion of such an important
character as this"
The report Of the majority Of the FL
nance Committee, submitted to the
Senate to-day, displays as one i'm
portant feature of the tariff the long
free list. The fact that the Senate bill
is 4.22 per cent lower in rates gen
orally than the bill as il passed the
House is pointed TO with pride.
An average reduction of 2164 per
cent under the rates of the existing
Payne Aldrich tariff law is purposed.
Larger Free List.
The salient feature OF the bill as re-
ported to the Senate is the large in |
crease of imports 10 be admitted free |
of duty. Under the House bill the !
value Of free listed imports, on the !
basis OF 1912 importations, was S1O3,- |
100000, whereas the Democrats Of the |
Senate in caucus. by sweeping changes, !
purpose TO free list imports valued at |
S147,367, 900. an increase of undutiable |
imports over the House bill OF S43.- |
3G7, 900.
Senator simmons, who wac absent to- |
day because Of death in his family, |
viii start the debate on the tariff bill |
tomorrow With q speech setting forth |
the general views of the Democratic |
majority and the needs for tariff re-
vision. Senator Cummins served notice |
that he wCuld speak on behalf Of the |
minority. and he may follow Senator |
Simmons tomorrow afternoon. Sen |
ators Smoot and Burton plan to talk |
on Monday.
Upon the basis OF ten months for the
coming fiscal year. the majority report |
estimates that the total customs re-
ceipts under the new bill will be $2G6.. |
10000: from income tax for ten !
months. 5e.3300O0: corporation tax.
S3T,OOO.O00: internal revenue, including |
tax Of S5.O00OOO on cotton futures, |
S29T. 900 600 and that the revenue from |
all other sources will bring the total for |
the fiscal year to S996.Sl0,100 With !
disbursements estimated for the COM
mittee by Treasury experts at $780, |
10000 balance is shown in favor OF |
the government of $2,020,O00
The date when the income tax section |