After the Supreme Court’s Pollock decision, a group of ‘progressive’ Republicans joined with Democrats in passing a law taxing corporate income in 1909 (36 Stat. at L. 11, 112-117, Chap. 6, §38.). To avoid the limitation imposed by the Supremes in that case, the crafty Congress imposed the tax on the “carrying on or doing business” by corporations, joint stock companies or associations, and insurance companies, measured by the amount of its entire net income from all sources. In Flint v. Stone Tracy Co. (220 US 107, 146), the court said the tax “may be described generally as a tax upon the doing of business in a corporate capacity.” It further defined “business” as “everything about which a person can be employed,” citing Black's Law Dictionary, and continued with “[t]hat which occupies the time, attention, and labor of men for the purpose of a livelihood or profit,” citing Bouvier's Law Dictionary.
Just one year after the Flint decision, amid some uncertainty as to the ratification of the 16th Amendment, this contingent of Representatives decided to extend this special excise tax to include individuals as well. The bill to accomplish this was H.R. 21214. It just so happens that years ago I came across the House debates on this bill on one of my many expeditions in the law libraries. They provide a revealing glimpse into attitudes and beliefs of the Congressmen of that time. So, in the interest of sharing information that might otherwise escape your attention, here are links to those debates from March 16 and March 19, 1912. Enjoy!
