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The Boise Citizen FRED FLOED'S PAPER M VOL X BOISE. IDAHO. JULY 2. 1909 NO 31 THAT CORPORATION TAX The Springfield Republican gives expression to the followi upon the proposed corporation tax ; To all appearances the nature of the proposed federal tax corporation net earnings is not generally understood. Most people seem to identify it with the tax placed on net corporation incomes in connection with the individual incomes as by the income tax law of 1894 w'hich w'as overthrown in the United States Supreme Court in 1895. On the contrary, there are certain important differences to be observed. The corporation tax may be levied in the same in both cases, but the results will necessarily be radically different when it is applied without a tax on individual incomes from what they will be when the tax is applied in connection with a general income tax. ing on way Let it be said at the outset that little justification exists for a tax on corporation incomes when the government is taxing indi vidual incomes. First or last all corporation incomes find their way to individual pockets and are there taxed above a certain amount; and when the income is taxed in the hands of the corporation and again when it reaches the individual we have a double taxation of sort of use or essential bearing upon the effort to make super fluous wealth bear its fair share in the support of the government. But let this pass. The point now to lie considered is that a tax simply on corporation net earnings or net income involves injustice and presents broad opportunity for evasion which are wanting when applied in connection with a general individual income tax. The injustices are manifest. The "bloated bondholder" in this case es capes altogether, but not so when individual incomes are also taxed. The man who assumes all the risks or uncertainties of a corporate business is to be taxed under the Taft plan, while the man who re poses upon all its certainties is exempt. Risk or ownership capital in corporate undertakings is taxed while the same kind of capital in partnership undertakings is exempt. Multi-millionaires like Mr. Carnegie, whose wealth is mostly in bonded investments, go free, while the owner of no more than one share of stock in any paying no corporation is taxed. The common sense of justice is outraged by any such proposition. Great, how'ever, as this objection is another of a more serious character remains to be considered—the opportunities offered for evasion which are largely absent when the corporation income tax is applied along with an individual income tax. The smaller cor porations under the Taft plan can quite easily dodge the whole levy and all that it involves by simply dissolving into a partnership form of doing business. Corporations of only a few stockholders can easily make places for them in the management of the company and pay out of the salaries (operating expenses) what would otherwise go to net income and dividends. Similarly, as no individual income tax lies in wait on the outside of the corporation, as it were, under the Taft plan, incentive within the corporation is increased greatly to find other ways of diverting earnings before they reach the form to be made taxable by the proposed scheme. The consequence of this is that the Federal government under the Taft plan must exercise an espionage in the affairs of all busi ness corporations and a direction of the bookkeeping and account ing which would be unnecessary in the case of a general income tax. be imposed with any degree of fairness at all as If the tax is to between the stockholders of the several corporations ,a federal ac countant will have to be placed in every corporation counting-room throughout the country. The President is said not to believe this, but his commissioner of corporations, H. K. Smith, who has been having some experience in the matter of corporation accounting, is quoted as declaring that "to keep the corporations in line and prevent their evasion of the tax would require a force of special agents and examiners as large as the standing Army of the Lnited States." And Mr. Smith's practical knowledge of the requirements of the case is no doubt to be placed above tha of the I resident. more than $25,000, And all this merely on behalf of raising 000 Federal revenue as against a yearly total now collected of abo\e $800,000,000! Surely one of the most extraordinary fiscal proposi tions ever presented by the responsible public authority. Revenue obviously cannot be its chief purpose. The mere question of additional The best course to pursue would as the Democrats and insurgent on What then should be done? revenue is easily to be determined, he to impose a general income tax Republicans propose, with, say, additional and temporary stamp taxes to make up the revenue deficit pending a rehearing of tue in come tax question before the Supreme Court, poration dividends (as distinct from net earnings or much to be preferred as a temporary measure to this pi op«»et 1 pi- 1 ' for, while objectionable on the grounds of equity , it couM l>e c lected with very little trouble or expense. If it is deemed unwi-v u> presume so greatly upon a reversal by the Supreme Couit of its I >95 judgment, then the programme of a constitutional amendment for income tax could be followed, with the substitution of stamp taxes, °r even of a corporation dividend tax, for this scheme of the I ><- 1 dent Even a tax on cor income) is an as a temporary measure. Then, granting the need of closer Federal contml ut <. ' i> Interstate Commerce, let that question l>e dealt wit i VV hv bons engaged in !_ 5 by itself. Why force it into a tariff and revenue discussion? divert attention at this moment from a troublesome tariff and revenue And in question to this other problem of even greater difficulties? is prepared to indorse a plan ot distinctions what "iy case who has thought of or is federal control of corporations which draws no among them in regard to restraint or interstate trade, but | . tbe Federal regulative power in every countingroom wholly regan - less of monopolistic character or relationship to interstate commerce ever DISGUSTED REPUBLICANS The Kansas City Star, which is professedly independent in pol itics,but at the same time usually alights on the Republican side of the fence when the test comes, has lieen sizing up the situation as regards the tariff bill now being hatched in Washington and returns the following indictment : "The Aldrich bill is the first tariff bill since the Civil war which has not had the support of the party press. The McKinley and the Dingley bill were accepted unquestionably as the true party gospel by the Republican new spapers at the time, and even the Wilson bill, with all the disappointments it brought to hon-est ad-vocates of a tariff for revenue, evoked approval from most of the Democratic newspapers. "But the Aldrich bill is too much for even the most hardened Republicans to stomach. Among its most conspicuous critics stand such staunch Republican organs as the New York Tribune and the Chicago Tribune. "The Herald is the only newspaper of importance in New York to uphold the senate finance committee. The Boston Herald and Transcript are thoroughly dissatisfied. "In Chicago, in addition to the Tribune, the Record-Herald and Evening Post dissent from the Aldrich policy, and even the Inter Ocean, a stand-pat newspaper, says that the campaign promises of downward revision should be fulfilled. The St. Louis Globe-Dem ocrat, the St. Paul Dispatch and the Minneapolis Star are up in arms. "On the Pacific coast the Portland Oregonian, the chief Re publican newspaper of the northwest, has been bitterly attacking the Aldrich bill and the Spokane Spokesman-Review resents the Aldrich kind of 'tariff-revision.' " The Philadelphia North American adds that "these newspapers expressed the enthusiastic satisfaction of their respectives communi ties when Taft ran and won. They express today only the anger and disgust of their millions of honest Republican readers at the result of the administration's seeming transfer of the control of the party to the very men directly and intentionally repudiated by the nomination and election of Taft." The Springfield Republican harks back to November 3 of last year and shows "that a change of little more than 100,000 votes in western states last November would have defeated the Republi cans, and if we take the states of Ohio, Indiana. Kansas. Missouri and Iowa, and add Montana, without counting either Wisconsin or Minnesota, a change of less than 100,000 votes in a total active electorate of about 3,500,000 would have defeated the Republican ticket, other states going as they did." The people in the central west were bambozzled into voting the Republican ticket by the interpretation of the tariff plank in the Chicago platform by w illiam H. Taft, the Republican candidate. The North American, in commenting upon the figures given by the Springfield Republican, rises in righteous indignation and says : "And no fair observer can doubt that if the American people had known that Aldrich and Cannon were to dominate the party ac tion, with the apparently complete sanction and support of the ad ministration, the states named would not have been the odly ones made more than doubtful. "The American people are very patient. But the time of the sanctity of a name without works has been passed. They w'ould accept uncomplainingly any error of 'the party of God and morality' as long as the issues of the Civil war were alive. When, in Cleve land's day, the permanence not of some tariff schedules, but of the protective principle was imperiled all lesser doubts were sunk in the general desire to prevent disaster to the country's commerce and industry. The party label "Those periods of blind regularity are over, put upon a law that is a cheat, a trick and a lie, will not save the lawmakers who enable Aldrich to break every party pledge and principle from the condemnation and righteous anger of their Re publican constituents who are not liars, cheats or tricksters." "Liars, cheats and tricksters" is pretty strong language when used by a Republican newspaper to designate members of its own party, but the North American goes further and pays its respects Senator Aldrich personally at his command : "One of the ablest students of American institutions has said that constitutional government remains vital only as long as there is periodical renewal of understanding and confidence between the governed and those selected to govern The position taken today by the foremost Republican newspapers, east and west, proves sim ply that that svmpathy and that understanding have been destroyed to as well as those who fetch and carrv a: THEBANK OF IDAHO. bi iii r - GET THE HABIT The practice of banking anJ saving bespeaks thrift, intelligence and stability ct character , 1 We put forth our best efforts in giving encourage ment to these virtues. 4 PER CENT INTEREST Paid on Certificates of Deposit SAFETY BOXES FOR RENT *2 50 PER YEAR CO THE BANK OF IDAHO. ■■ M ■ between March 4 and July 4. "Never before did Washington present such a spectp.de of 'the blind leading the blind.' Senators and congressmen merely laugh when the very street boys in the national capital speak of going to 'The Aldrich' when they mean the United States senate. "They are content to follow meekly the man more ignorant of real Americanism than any other man in America ; the shallow pre tender to wisdom concerning the tariff and currency whose ignorance and trickery at last have been thoroughly exposed; the servant of every thieving, predatory corporation, front the sugar trust, which once saved his private and. political fortunes, to the traction swin dlers of New York; the man whose statesmanship is summarized in his declaration that duties on a certain fabric would remain un changed while he inserted a clause providing for a lesser width, thereby greatly increasing the duty ; the man who represents none even the intelligence, but only the venality of the rotten borough that calls itself a state, but in reality is only a corrupt excrescence up on the national body politic—Aldrich of Rhode Island. t "He thinks, and the weaklings and worse who obey his orders think, that a seacon is at hand of such prosperiy that the people will be reconciled to all that has been done during this precious special session. "So fatuous are they that they do not see that their faith breaking already has done more to destroy the practically universal approval that the doctrines of protection had won than the combined efforts of all the Democrats since Tilden. "Blind even to their own selfish interests, they do not see that not only have they put a triumphal party upon trial with the lam est of defenses, but that every senator and every representative from a state not dominated by trusts, rings or railroads, who continues suberviency to Aldrich and Cannon will stand indicted by public opinion, and will learn sooner or later at the polls the meaning of the people's present sullen anger and disgust." The schedules of the Aldrich bill will be finished in the senate this week and the corporation and income tax amendments taken up. The remaining features of the measure will lie agreed to in short order and both the Aldrich and Payne productions sent to conference. W hat will the harvest l>e? The North American sees no hope party pledges power ful editorial in sorrow as well as anger as follows; "This news paper believes today as always in real protection and in real Republi canism. And it is with sorrow that we make the prediction that the sowing of the wind by these false leaders will bring ultimately a harvest either of annihilation or of disaster nearly approaching it to the party as now controlled and organized. America has no room for a traitor—whether a party or a public man." It really begins to look as though the great mass of Republi cans have been fooled for the last time on the revision of the tariff bv its friends.—Salt Lake Herald. OLD MAIDS OR VOTERS Mrs. Oliver H. P. Belmont is attracting considerable attention just now by her militant declarations with regard to woman's suff rage. Mrs. Belmont, who has plenty of money and plenty of leisure to pursue any sort of an agitation she may see fit to take up, wants the women of America to adopt the rough and ready tactics of the English suffragettes and urges particularly that they pledge them selves not to marry until the suffrage is granted them. If they do this she says they will be given the right to vote within eighteen months. There is no question that women would be admitted to the franchise in short order if they vowed not to marry until they got it But they won't do it. All levity aside marriage is more to woman kind than any amount of suffrage just as it is more to man. laws of sex are more inevitable than any man-made rights or priv ileges for they are inherent in all the creations of earth, whether plant or animal. and they will be with it until the end. They are immutable. Woman will not and can not trangress them for the sake of obtaining the right to vote any more than man would, or could, were he in a sim ilar position. The They have been with humanity from the very beginning This commonly phrased talk of the equality of man and woman is utter nonsense. Woman is not the equal of man, for the very simple reason that she is not like him. We do not say that the mechanism of a watch is equal to that of a locomotive, but to state that is was would be equivalent to saying that man and woman are The question of equality can not possibly enter into any equals. discussion of the suffrage as between the sexes, for God in His wis dom made man and woman two unlikes, each the complement of the other, and upon their united duality based the future of civilization. Neither is supreme, because neither could exist without the other. Their individual superiority hangs on their joint superiority to all the rest of creation, not upon any fancied pre-eminence of either to the other. At the present time no large number of American women want the ballot, ardent woman suffragists to the contrary. Rightly or wrongly. they are perfectly willing to be represented by their fathers, brothers and husbands, and to wield their influence through the affec tions rather than through the vote. If the time ever comes that these women, the great majority of them, want to go to the polls with the men on election day they will do so. and few men will oppose Yet even if they do all vote some day. the woman suffragist them. dream of a social and moral regeneration of the universe will hardly be attained thereby, for woman, with all her noble qualifications, is quite as human as man and quite as liable to error.—Milwaukee Journal.