The President's Recommendation to Congress
June 16, President Wm. H. Taft sent in a recommendation to Congress recommending that Congress adopt by a joint resolution by two-thirds of both houses “proposing to the states an amendment to the Constitution, granting to the Federal Government the right to levy and collect an income tax without apportionment among the states according to population; and second, the enactment as part of the impending revenue measure, either as a substitute for, or an addition to, the inheritance tax of an excise tax upon all corporations, measured by two per cent of their net income.” He states that he has been informed that a two-per-cent tax of this character would bring into the treasury of the United States not less than $25,000,000, and that one of the merits of this tax is the federal supervision which must be exercised in order to make the law effective over the annual accounts and business transactions of all corporations. “While the faculty of assuming a corporation form has been of the utmost utility in the business world, it is also true that substantially all of the abuses and all of the evils which have aroused the public to the necessity of reform were made possible by the use of this very faculty. If now by a perfectly legitimate system of taxation we are incidentally able to possess the government and the public of the knowledge of the real business transactions and the gains and profits of every corporation in the country, we have made a long step toward that supervisory control of corporations which may prevent a future abuse of power.” It is thought by Republican leaders that this plan of the President's will be adopted in the Senate by a majority of at least a dozen. It is reported that the progressives are meeting a forlorn hope against the plan, but that it would not be surprising to see the opposition go to pieces when the whole subject of special taxation is taken up by the Senate. It is generally understood that if the corporation tax goes through, the Democratic Senators will vote solidly for the submitting of the Constitutional amendment to the respective states.