AMERICAN FINANCE.

Dominion, Volume 2, Issue 533, 19 June 1909, Page 5

AMERICAN FINANCE.

FEDERAL TAXING POWER. IMPORTANCE OF A DUTY ON INCOMES. . CORPORATIONS' PROFITS. (By/Telegraph.—Press. . New York, Juno 17i President Taft, m a mossayu to Congress, 'recommends, j-thq ..imposition of a: tax of 2 per cent, on the not earnings of corporations, which ho estimates wiil 'bring . into ; tho' Treasury 60,000,000 dollars (£10,000,000) annually. . ! ' .''./ The President •also'recdmmerids nn amend.motit of the Constitution, enabling the United 1 States 1 Govehu-.ont to. levy an jncome-. tax' without', apportionment among .'tho ,-Statos. He adds;' ' "It is' undoubtedly,.a proper ' tils, ',which; tho;Government ought to havoj and it might bo indispensable to tho nation's lifo in a groat'crisis." ; . LIMIT? OF FEDERAL TAX-POWER. , COURT'S ADVERSE DECISION. ■ ; Tho 'taxing powers of the Fed«ral Government in' tho- United -'States, arc limited by: (a) The provision: of. the' Constitution which prohibits all- duties- on exports, and (b) the; provision of tho .C- nstitution. that all direct taxes -must be levied;"in proportion to population—ft-provision ■whioh 'deprivesVdiroct taxos of nearly all their efficiency; for- revenue purposes/ .The 'Constitu- . tion jlecitires f / "Representatives ■ and'. Jdireat taxes;shall be apportioned among the several 'States .which may he included in this Union,' icoordiiiji ; .to'.tht'ir rospectivorminibprs \ .". Tho prefenco of a serious deficit in the United jn most other- courilties—lias' stimulated taxation -'enterprise;, ■ Some politicians favour ii dividend tax, (in inheritance tax, some an-. income., tax.;; Ah attempt to levy a Federal'-income, tix 'in 1304- was killed by an adverse of tho Supremo Court.' .■ •.

>'-In\t'ho:,Uliifea ; States; .Seriate reocntly..: Mr. Bill Icy, .on ; behalf of the ■ Democratic : Senators, introduced nn' amendment imposing' a . tax or i) per 1 cent. oh', all incomes dollars (4)1000),V with. exemption .for /Federal, Stato, Qo,unt,v," 'an(l 'Wiinioipal 'SEonrlties, 'and the Salaries of all. Stato officers.. Mr. 'Bailey estimated that such a tax would produce about 10,000,000 dollars:(i£2,(loo,ooo)•annually...H« declared his belief ( that the Supremo Court would not reject jt, ,as i it'-did. tho. income-tax lawf in .1891, to-' ..minding! his hearers that that decision was given .lly. a divided Corirt., •:. On behalf of- Middle West'Eepnblicansi/Sen'a-tor'-C.umntiits; also Introduced -an-' income-tax Bill, providing for a graduated income tax covering all. .incomes, over ,£IOOO, and .running from'; 2 to 6 -per! cent. •: : Corporations, arc not assessed under this.Bill.:; . >?.