New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-04
Amendment to the Constitution
Having Been Ratified, Demo-
Gratis Will Promptly
Enact a Measure.
WILL PROVIDE S1OO.OOO.OOO
Ways and Means Committee
Will Make Deep Cuts in Tariff
Duties, Counting on the
Income Tax to Fill
Treasury.

From Tho Tribune Burcau1
Washington, Feb. 3.-An income tax
law which will raise annually at least
100000. 900 in revenue became q part
of d Democratic tariff revision plan
to-day following the action of Wyom-
ing. Delaware and New Mexico in rati-
flying the income tax amendment TO
the Constitution.
The Democratic members Of the
Ways and Means Committee heard
with satisfaction that a thirty sixth,
thirty-scventh and a thirty eighth state
had ratified this amendment, thus max
ing genuine income tax bill possible.
| Representative Hull, who is slated TO
draft an income tax bill for the COM
mittee. estimated that the measure
ought TO produce S1O0OOOO00.
II is the intention Of the House
leaders to pass an income tax bill dur
ing the extra session. The ratification
Of the amendment lifts n considerable
burden from the shoulders of the tariff
tinkers and will probably result in
cuts in the tariff rates which could not
have been made without a great reve-
nue. producer such as an income tax
law.
\ full-hedgcd income tax law will
| supplant the existing corporation tax
and tho Underwood bill To extend its
provisions. The latter measure passed
the Senate last session and was pro-
posed as a companion bill TO the free
! sugar schedule enactment Of which
would have resulted in AN annual rev.
cnue loss of approximately 100000
600 The corporation tax law will he
combined with the proposed income
tax law.
Means Heavy Tariff Cuts.
Receipts under tho present corpora
ton tax range from S25cOnOo0 TO
S3oOOo.OO0, and if Mr.. IIull's estimate
is correct the income tax bill which
is now made certainty. will raise
about S70.0oO,0v additional.
This prospect will enable the Demo-
Gratis If the Ways and Means Com
mittcc to proceed without worry TO
the slashinS Of many existing tariit
rates and 10 the report of another free
sugar bill. Their present plan is TO
combine IN a blanket statute the
substantive provision Of the existing
corporation tax law and additional
legislation putting into operation a
simon pure income tax.
! Mr.. Hull has made an exhaustive
study of the income tax laws of for
eign countries and las made a hobby
Of such legislation since entering Con
gress. Mr.. Underwood gave the Ten
ncssccan credit for the blu TO extend
the corporation tax which bore the
formers name.
Mr.. Hull IS tentatively committed. il
is understood to a tax Of | per cent
on all earned incomes Of 5000 or
more a tax of 1l2 per cent on un-
earned incomes above that figure and
a stil higher but graduated tax on
incomes from swollen fortunes and
large real estate holdings.
Collection Of the tax at the source
Of income" is expected TO be feature
Of the Democratic bill This would
obviatc in many cases the necessity Of
the individual taxpayer from making
returns.
To Escape Inqusitions.
"The government. corporations. CO.
partnerships and persons paying annual
earnings TO employees" explained Mr.
Huu "would withhold and deduct the
tax and pay it 10 the government
This method would likewise apply TO
roortgaeors and lessees of real or per-
sonaI property. and the taxpayers
would not come in contact with the in
mi,' ions of a revenue official"
Ratification of the income tax
o,oondment was announced in the
Senate by Senator Brown, author Of
the original resolution, who made a
short statement congratulating the
people on its adoption.
The proposed amendment was llltro-
duced on June II, 1909, and referred
n the Committee on Finance. Sena-
TOR Aldrich reported ii TO the Senate
an J,ne 2S with a slight amendment
II was passed by the Senate on July
: 1909. by a vote of q to ., hfteen
Senators not voting
In the House the bill was reported
by Representative Payne. after 1t had
beon before the Ways and Means
Committee for three days. on July L.
II was passed on the same day by
.ote Of 31S to II, and a copy was
aanoeited with the Secretary of state
ON July II. 1903
The adoption Of the amendment
marks the first change in the Consti-
tution since 1870. The Fifteenth
amendment was proposed on February
o. 1869. ratified by twenty-nine out
- ,birty-seven states, and went into
effect by Executive proclamation on
March 80. 1870.
Text Of the Amendment.
The text Of the income tax amend
ment is as follows:
Article XVI-The Congress shall have
noWer TO lay and collect taxes on incomes,
from whatever source derived WITHOUT
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