The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1895-04-10
THE INCOME TAX.
Decision Of the Supreme Court. Declared
Unconstitutional in Part.

come IN ease til the question Ni1etner
.or not tx on rents from real estate is a
'tax on real estate and therefore a direct
tax. he announced that the Court has de-
citled tina. il is n tax ON real estate there
fore a direct tax and provided in the pres
cnt law unconstitutional. The opinion
Of the Chief Justice also declares that the
tax on municipal and State bonds is un-
constitutional. ON ali other points the
Court IS equally divided, and no opinion
thereon j given. The decision of the
Court below on these points is reversed
and a similar entry made in the case of
Hyde versus the Continental Trust Com
pany.
The announcement OF the decision Of
the supreme Court of the United States
in the income tax cases to-day was made
in the presence'of a crowded court room.
the spectators hobby being thronged to
its utmost capacity. Public interest in
the eases has drawn All attendance every
decision day since the argument took
place that has taxed the power and inge-
nuity of the officials 70 care for. Among
the many prominent persons within the
rail to-day were Attorney General Oh
ney. eN-Attorney General Garland, ex-
Secretary Boutwell,, Senator David b.
Hill, who 50 prominently fought the in
sertion Of the tax provision in the tariff
law, and Senators Mitchell and Hunter
The decision of the Supreme Court de-
claring those portions of the income tax
law unconstitutional which impose a tax
npon rentals and State and municipal
bonds, il Is said by officials OF the De-
par.ment Of Justice, does not affect the
legality Of the remaining portions Of the
Law. In q statement sent out by the Uni
ted Press on March 18th last, ii was as
serted on the authority OF the Attorney
General that the case had been 50 pre-
sentea TO the Cour, That portion OF the
law might lie declared Unconstitutional,
while the rest Of it could stand.
WHAT THE COURT SAID.
The Court ia course Of It's opinion says /:
'.That the understanding and expectation
at tie time of ;he adoption OF the consti-
tuition was that direct taxes would not be
levied by the General Government ex-
oept under the pressure of extraordinary
emergency, and such has been the prac-
lice down TO august 18th, lS9l If the
power to do as Is 20 be exercised as an
ordinary and usual means of supply, that
llct furnishes an additional reason for cir
cunlspection in disposing OF the present
case. That taxes on real estate belong TO
the class of direct taxes, and that the taxes
on the rent or income Of real estate, which
IS the incident Of is ownership, belong To
the same class. That 50 much Of the act
OF August 18TH, 1925, as attempts 10 i'm
pose q tax anon the rent or income of real
est.te without apportionmen; j. invalid"
The Court i further of opinion that the
act of August 18th, IS9s, is invalid 50 far as
]; attempts 10 levy q tax Epon the income
derived from municipal bonds. A. a
municipal corporation is the representa-
tive OF The State and one of the instru-
mental les OF the State government, the
property and revenues Of municipal cor
porstions are not the subjects of Federal
taxation nor Is the income derived from
State, county aud municipal securities,
since taxation On the interest therefrom
operates on the power before il * eXercis-
o,I and has q sensible iniiuenceon the con-
tract, and therefore, such tax i a Tx on
the power of the states and their instru-
mentaiities 10 borrow money ana consc-
qaently repugnant TO the Constitution.
Upon each of the other questions argued
at the lar, towit: I. Whether the void
provisions A. 10 rents and income from
real estate iuvaiids the whole act. >
Whether - 10 the income from personal
property as such the act Is unc0nstitG-
tional As laying direct tax. ,. Whether
any part Of The tax, ifnot considered As
direct tax, is invalid for want Of uniform
ity on either OF the grounds suggested.
The Justices who heard the argument are
equally divided, and therefore no opinion
i expressed. The result i, that the de-
cree ofthe Circuit Court Is reversed, and
the cause rcmanded with directions to
enter a decree in favor OF the complaint
ant in respect only Of the voluntary pay
mont Of the tax on the rents and income
OF is real estate and that which il holds
in trust and on the income from the muni-
cipal bond owned or so had by it.
Associate Justice Field read an opinion
declaring the whole income tax proyis-
ion OF the tariff law Of 1884 to be unconsti-
tusiona.
Associate Justice White dissented from
iha view ofthe Court and protested against
reopeniHs Of The decisions OF the Court OF
4 hundred years past. Heconcurred with
the majority Of the Court however, upon
the question Of the taxation of State and
Municipal bonds.
Justice Harlan was Of the opinion that
a tax on gains. profits and income derived
from TIE rent oflands was not direct
tax. 50, under numerous decisions of
this Court, the income derived from mu-
nicipai bonds was not the subject Of spe-
citc taxation ia any form by the United
States. III other matters he was liz accord
with Justice White. Al 2:35 P. N. the
Court concluded the reading of opinions.
THE EFFECT OK THE REVENUE
WAsHINCroN, April s.-The effect OF
the Supreme Court decision in the income
tax law, SO ar rs the Treasury Depart
ment officials can determine after a hur-
ried estimate made this afternoon, will be
a reduction Of about oBe-half in the reve-
nue. originally estimated as ob;ainable
from that source, thus making the annual
revenae 80 he expected about si5,GD000e.
The original estimate Of >S0G1,0)o per
--ss -l r..,.. -, . -., So, u, l.,
law would be held to De constitutional in
al It, provisions.
HOW THEY sToOD.
WasHISCIoS, April S.-Jpcn theques-
lion of the C9nstiIiionality Of the taxa
tioa OF incomes from State and municipal
bonds, the Court was unanimously in the
negative upon The question Of oftaxation Of
rents. the Court stood ss follows: Affirm
ing Tie law. justices Harlan and White
against the law. Chief Justice Fuller,
Justices Field, Gray. Brewer, Brown and
Shiras. Upon the general question Of the
constitutionality ofthe law the Court is
said 10 be divided as follows. For the
law. Justices Harlan, Brewer. Brown and
While; against the lax, Chief Justice
FnlIer, justices Field. Gray and Shiras.
EGrdsrer's Queer Pea.
ToPEKA. Kan. April G.-Tle Supreme
Court to-day rendered a decision in
which hypnotism is recognized both rs a
defense and ground for conviction of
crime. The ease passed upon came up
from the cowiey county District Court.