San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1895-04-08
INCOME TAX KNOCKED.
SUPREME COURT DECISION TODAY
SETTLES 1T.
Incomes Derived From Rents and
State, County and Municipal
Bonds Can Not Be Taxed.

cision of the Supreme court on the
income tax case.
The court knocked out the law
as far as it taxes the incomes de-
rived from rents and also from
state, county and municipal bonds.
1t was ruled that the fact that
the law was pronounced unconsti-
tutional in those two particulars
did not invalidate the law as
whole. 1t was announced in this
latter conclusion that the court
was equally divided and therefore
gave no opinion, the lower court
having ruled in favor OF the law.
By a divided court the law would
stand, except as to rent and state,
| county and municipal bonds, and
on these two points it was directed
that Judgment below be reversed.
He began by stating the ex-
captions to the law as made by
the counsel for appellant, as fol-
| lows:
First. That the act imposes a
| direct tax in respect to real est ate,
rents, issues and profits, as well as
OF income and profits OF personal
property, and not being appor-
| toned; a violation OF section OF
article l, of the constitution.
Second: That the law, il not
imposing direct tax, neverthe-
less is unconstitutional, in that its
provisions are uniform throughout
the United States and do not oper-
ate with the same force and effect
upon the subject of the tax where
ever found, or in that it provides
| exemptions in favor of individuals
and co. partnerships, while denying
all exemptions TO corporations.
having a similar income derived
from like property and values,
and provides for other exemptions
and inequalitie in violation OF
section s, OF article |, of the con-
| stitutiOn.
Third: That the act provides no
exemption tax upon incomes de-
rived from stocks and bonds OF
states OF the United States and
counties aud municipalities there
in, which stocks and bonds are not
proper subjects for taxing in the
power OF Congress. The income
from these securities in United
States amounts to over 500, 100000
per annum on which the total an
nual income tax would be ST. 100000
He then tick up the constitu-
tional points involved, dwelling
upon the fact that the constitution
requir, d a arp )rtiOnment OF direct
taxes and uniformity in excuses
and imports. He also dwelt upon
| the question Of representation and
taxation, which was, he said, the
foremost one when the constitu-
ton was adopted. He then took
up the question of the tax on rents,
and in SO doing discussed at con-
siderable length the question of d.
rect taxes as considered at the time
OF the framing OF the constitution
He quoted various Supreme
court decisions and sought to show
that while the income tax ques-
| ton had been before the court, the
question only had been considered
as applying to the point at issue in
| particular cases. Coming down to
the present tariff, he said the law
was passed in a time of profound
peace, and it was to be taken as
evidence that Congress had
| sought in this matter to
form a precedent and establish a
departure from established lines,
and it therefore became important
to INQUIRE into the circumstances
with some attention to detail, and
for the purpose Of comparison he
went back to the enactment of an
income tax during the civil war.
He quoted from a decision in the
Springer case, giving the history
| of the case and devOting much at
tention to it, as he said twas upon
this case the defense apparently
relied more generally than upon
any precedent. 1t is he said, con-
| coded in all cases, from Hylton
to Springer's, that taxes on
land are direct taxes, while
in some of them it is determined
that taxes on rents derived from
lands are indirect taxes. Was
there, he asked, any distinction be-
tween tax on land or an income
derived from the lands? What,
in other words, was land but the
profit on it? The name OF
the tax is unimportant, and the
court has been unable to see any
distinction. He closed by saying