The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1895-04-09
INCOME TAX.
The Latest Dselsloa> in tho Case Before
the Supreme Court

The Latest Dee isioas An the Case Before
the Supreme Court
WASHINGTON. April s.--After almost a
month Of deiioeration. the United States
supreme court rendered its decision to-
day In the income tax cases. deciding by
q divided court the law to be valid, except
regarding incomes derived from rents and
from municipal bonds, on which point the
decision of the tax was Unconstitutional.
BY tie vote OF the court the law was
sustained In other respects. Tho courts
conclusions after reviewing the historical
and other phases of the question were rs
follows:
In the case OF Charles Pollock va the
Farmers Loan d Trust company, ct al,
it is established;
1. That by the constitution federal
taxation is divided into two great classes:
Direct taxes and duties on imports and
excises.
2. The imposition of direct taxes Is
governed by the rule of apportionment
among the several states, according to
numbers and imposition of duties. inn
ports and excises by the rule of uni-
formity throughout the United States.
3. That the principle that the taxation
and representation 60 together was in
tended to be and was preserved In the
constitution by the establishment of the
rule OF apportionmeut amongshe several
states so that such apportionment should
be according TO the numbers In each
state.
4. That the states surrendered their
power to levy imposts and to regulate
commerce to the general government aud
give II the concurrent power to levy direct
taxes In reliance on the protection af-
o. <I..1 -. H. l..1 .x<.I hat
the compromise of tho constitution cam
not be disturbed by legislative action.
5. That these conclusions result from
the text of the constitution aud ara sup
ported by tho historical evidence furnished
by the circumstances surrounding the
framing and adoption OF that instrument
and the views of those who framed and
adopted IL.
6. That the understanding and ex-
pectation at the time of the adoption of
the constitution was that direct taxes
would not be levied upon the general gov
ernment except under the pressure of
extraordinary exigency, and such has
been tho practice down to August, 1894.
IL the power TO do so is TO be exercised as
an ordinary aud usual means of supply,
that fact furnishes an additional reason
for circumspection In disposing of the
present case.
z. That taxes on real estate belong TO
the class Of direct taxes and with the
taxes on tho rent or income of real estate.
which Is tho incident OF its ownership be-
longing TO the same class.
8. That by no previous decision of
this court has this question been adjudi-
Gated to the contrary of the conclusions
now announced.
n 49,
Is, 1894, as attempts to imposs n tsxup0u
the rent or income of real estate without
apportionment is valid.
The court is further of the opinion that
tho act OF August 10. 1894, is invalid 30 far
as II attempts to levy tax upon the in
come derived from municipal bonds. As
a municipal corporation il the represent
ative of the state. and one of tho instru-
mentalities OF tho state government. the
property and revenues OF municipal cor
porntious are not subjects Of federal taxa
ton. nor Is the income derived
from state. county and municipal
securities since the taxation on
interest therefrom operates on the power
to borrow before IL is exercised and has a
sensible influence on the contract and
therefore such tax on the power Of the
state and their instrumentalities TO
borrow money, and consequently repug-
nant TO the constitution.
Treasury officials arc greatly dispiritcd
over the supreme courts decision on the
income tax case and express tho belief
that the result of tbs decision will be o
loss OF at least 80 per cent. of the receipts
from the incomes. Internal revenue off,
cials will Mt once proceed TO prepare sup
Elemental regulations to conform to to-
days decision. Persons who have made
returns and paid the tax will be advised
of the change In the regulations and as
soon as possible proportionate amounts of
tax paid by each on rents and bonds will
bc refunded them.