The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-04-09
Justica Field pissents.

Justice Field DisSentS.
The dissenting opinion delivered by
Justice Field. the Oldest member of
the court. was an exhaustive review Of
the case and the PRINCIPLES involved in
it. Some decisions of the court. he
said, had thrown some doubt upon the
meaning of direct taxes" hut in the
discussions of British parliament. the
income tax has always been considered
a direct tax. while the tax upon real
property. its rents and income had by
universal consent been recognized to
be direct tax.
Justice Field said exemptions from
the operation of a tax always creates
inequalities. Those not exempted must
IN the end bear an additional burden.
Or pay more than their share. A law
containing arbitrary exemptions can IN
no Just sense be termed uniform. We
do not think that Congress has right
fully the power. at the expense OF
others owning property of the like
character. to sustain private trading
corporations such as building and loan
associations. savings banks and mu-
tual life. fire. marine and accident in
surance companies. formed under the
laws Of the various states, which adj
vance no national purpose or public
interest and exist solely for the Decu-
-tidEI DTCIlL OF their IQSIQD@rS.s w mere
property is exempted from taxation.
the exemption which has been justly
stated, must be supported by some
consideration tfat the public ard not
private Interest," will be advanced by
it. Private corporations and private
enterprises cannot be 1ided under the
pretense that it is the exercise of the
discretion Of the legislature to exempt
them.
The income tax law under consider
alton is marked by discriminating
features, which affect the whole law.
Il discrirninates between those who
receive an income of $4,000 and those
who do not. 1t thus vitiatas. III my
judgment, by this arbitrary d;scrim-
ination, the whole legislation. The
legislation in the discrimination it
makes is class legislation. Whenever
distinction IS made in the burdens
a law imposes or benefits i confers
on any citizens by any reason of JEeir
birth, wealth or religion, il is class
legislation and leads inevitably to cp-
preston and abuse and to general I'M
rest and disturb lnce in society. 1t
is hoped and believed that the great
amendments TO the legislation which
followed the late evil war hac rem
dered such legislation impossible for
all future time. But the objectionable
legislation re3ppearS III the act under
consideration. II IS the same In es-
sential character as the English
statute of 1851, which taxed Protest
ants at a certain rate, Catholics as
class at double the rae of Procsstants
and Jews 1T anl:iIer aa1 separate
rate.
As to mutual savings banks:
Under income tax laws prior to 1870,
these institutions were specifically
t1xed Under the new law certain in
IL
provided the shareholders do not par
tieipafe in the profits and dividends
are only paid to the depOsators. No
limit is fixed to property and incomes
THIS excepted-at may be 100000 or
500. 10000
AS to mutual insurance corpora
tions:
These companies were taken under
previous income tax laws. They do
business somewhat different from
other companies, but they conduct d
strictly private business in which the
mulolic has no interest, and have been
often held not to be benevolent or
charitable organizations.
The sole condition for eXeuPting
them ..nder the present law is declar-
ed 40 he that they make loans to or
divide their profits among their mem
bers or policy holders. Every cor
Eoratiou is carried on, however, for
the benefit Of its members, whether
stockholders, depositors or policy
holders. Ii it IS carried on for the
benefit of it's stockholders, every
dollar Of income is taxed; if 1T is
carried on for the benefit Of its policy
holders or depositors who are but an
other class of shareholders, it is
wholly exempted.
AS to building and loan associa-
Eson<-
The property of those institutions is
axeanpteCi from taxation to the extent
OF millions. They are in no sense
benevolent or charitable institutions,
and are conducted solely for the pc
so,,rSary profit of their members.
cT.hasr assets exceed the capital
stnck of the national banks of
me country. The aggregate amount
Of savings to those associations
nv reason of their exemption is over
$500 600 a year.
This inherent limitation apon the
+axing power forbids the imposition of
-res which are unequal in their opera
ion upon similar kinds of property,
and necessarily strikes down the gross
nd arbitrary distinctions in the in
come tax law as passed by Congress.
The law, as we have seen. distin-
er5ishes in the taxation between cor
Dorations by exempting the properly
aa some of them from taxation and
SevviIig the tax on the property of
others when the corporations do not
No fE.riSily differ from one another in
f t11Is character of their business or in
Sf,e protection required by the govern
nnerf. Trihing differences in their
modes of busiEess but not in their re-
suits. are made the ground and occa-
sion of the greatest possible differences
in the amount of taxes levied upon
them. showing that the action of the
serisiaffye power upon them has been /
: arbitrary and capricious and some |
zines merely fanciful.
There was smother position taken in /
the arguments on this case which is