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Show COURT HOLDS CORPORATION TAXJSLEGAL Highest American Judicial Tribunal Declares New Law Constitutional. MEANS $25,000,000 YEARLY TO UNCLE SAW Court Is Unanimous; Law Was AttacKed on Many Points. WASHINGTON, March 13 The cor poratlon tax nroTisionAttha.ayna Aldrlch tariff act ware sustained todaj aa constitutional by tha supreme court of the United Statea. Tha court waa unanimous In tha decision. Thereby a souree of income of approximately approx-imately 23,000,000 annually waa assured as-sured to the government. Of all the objections to the tax raised by suits ia all parts of the country none of them waa found sufficient to aaullify tha law. Tha court did hold that the tax was not applicable 'to the real estate "trust" of Boston, which is organized not nnder any statute, but under the common law. The law was held not applicable to the Minneapolis syndicate, a real estate concern, on the ground that it was not doing ebusiaess" within tha meaning of the law. Juetice Day first announced that it waa within tha power of tha, senate to Insert tha corporation tax provisions in the tariff law, which originated in the house, and of which the tag pro-visioaa pro-visioaa are a part. Ia Excite Tax. Justice Day said that tha eourt held that the tax wae an excise tax on the doing of business, which is exactly the basis oa which tha government haa defended de-fended the law. Judge Iay seemed to hold that the tax proviaiona were not the arbitrary exercise of a power. This had been urged in argument aa ons reaeoa why the law should be held unconstitutional. The fight against the constitutionality constitutional-ity of the corporation tax began almost immediately after th oenaetment of the Pavne-Aldrich tariff law of1909. of which Tfn rTSarl.'' Turgthe long days or wrangling in congress over that measure President Tsft orlgiaated a plan to raise part of the revenue necessary neces-sary for the running of tha government by imposing a corporation tax. He is said to have made tha firet rough draft of the proposed law and to have asked the department of justice to perfect it. Sods la on Tariff Bill. Scarcely fifteen years before tha supreme su-preme eourt of the United Statee had declared unconstitutional tha income j tax measure enacted by congresa. Ia order to have a valid tax, the errora of that law had to bo avoided. I mall J tha attention of members of tha house and senate were celled to tha proposed corporation tax as a constitutional measure. It wss urged as preferable to another income tax which, it waa argued, ar-gued, probably would bo declared unconstitutional, un-constitutional, and as under tho circumstances circum-stances better legislstion thsa an inheritance in-heritance tax. When the tariff bill was in tha seaata tha corporation tax provisions provi-sions were inserted as aa amendment to tha Payne bill passed by tha house. They remained there and became a part of the tariff act - Th. proviaiona of tha law stated that tho tax was a spec i si exeiso tax with respect to tha carrying o-i or doing business. It waa to be paid by ".very corporation, joint stock eompaay or association as-sociation organised for profit aad having hav-ing a capital stock represented bv eharss, aad every insuraaco eompaay" organised under the lawa of tha United Statea or of aov state or territory. It waa provided that tho tax should be equivalent to 1 per centum upon the entire net income over aad above 15000 received from all aoarcea," exclusive of amouata received as dividend, upon atock of other corporations, joint stock compsniea or sssoeiatione or insurance companies, subject to tho tax. . , TjiiHtig Sight of Inspection. The lew provided slao that returns ahould be made by those taxed to tho treasury departaeat. to bo used at a baste for assessing tho tax. These were open to isspertioa, but in 1910 congress enacted legislation providing that the return ahould b opea to inspection only upon rules and regulations approved ap-proved bv tha president. The constitutionality af tho tax waa nttarked from all tho pointa - from which any tax poasiblo of enactment bv congress could be attacked. Prom-iaent Prom-iaent among the obteetione to the law waa the argument that the tax wss a direct tax, not apportioned, according to' tho constitution. Homo dubbed the tax "a corporation income tax" and invalid for .the seme reasons that the income tax was declared unconstitutional unconstitu-tional in 1895. Others clsimed that it wa, a tax oa state franchises and hence waa an uaeoastitutionsl inter-ferenea inter-ferenea with the 'sovereignty of the gtateu. Another line of ohieetione waa based oa the argument that aa an excise ex-cise tax it waa sot uniform, but contained con-tained vnroaatitHtiona elaeei&rarioas. Tse publicity feature, of the returns were attacked aa taking private property prop-erty without compeoaation. To all of! thes. ohtectlons the department of .fua-; tire, throui-h the late solicitor general,! Lloyd W. howers, St the first hanm'.i and throuifh S'e ,'iereaaor, Freoenra. W. Lenmaua, at toe eecofid heanog, ! made- an.wer. |