Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1895-05-25
INCOME TAX LAW DIES.
United States Supreme Court Says
II is Unconstitutional.
Five of the Justices We're Against 1t and
Four Favored the Law-AI1 Previous
DEGREES of the Court are Vacated
Taxes Already Paid VIII
'Je Refunded.

Justice announced the following con-
clusions:
First-wc adhere to the opinion already an
nounced that taxes on real estate being indis-
putably direct taxes taxes on the rents or IN
come of real estate are equally direct taxes.
Second-We are of opinion that taxes on per-
sonal property or on the income OF personal
property arc likewise direct taxes.
Third-The tnx imposed by Sections q to 50,
inclusive, of the act of 1894, so far as 1t falls
on the income of real estate and OF personal
property. being direct tax within the meaning
of the constitution, and therefore, unconstitu-
tional and void, because not apportioneu ac-
cording to representation, all those sections
constituting one entire scheme of taxation are
necessarily invalid.
The decrees hereinbefore entered in this court
will be vacated; the DEGREES below will be re-
served and the cases remanded with inStruc-
tions to grant the relief prayed.
AS heretofore stated, the constitution divided
federal taxation into two great classes, the class
OF direct taxes and the class of duties, imposts
and excuses and prescribed two rules which
qualified the grant power to each class Inc
power to lay direct taxes apportioned among
the several states in proportion TO their repre-
| sentation in the popular branch in congress- a
| representation based on population, as nscer-
| tained by the census, was plenary and absolute;
| but to lay direct taxes without apportionment
was forbidden. The power to lay duties, I'M
| post and excises was subject to the qualihca-
| ton that the imposition must be UNIFORM
| throughout the United States.
| Our previous decision was confined TO the
consideration of the validity of the tax on the
| income from real estate and on the income from
municipal bonds. The question thus limited
was whether such taxation was direct or not IN
| the meaning of the constitution, and the court
went no farther, as to the tax on income from
real estate than to hold that it fell within the
same class us the source whence the income
was derived; that is that q tax upon the realty
and tax upon the receipts therefrom were
alike direct while as to the income from mu-
nicinnl bonds tnat could not be taxed DecHuSe
vi want of power to tax the source and no ref
erence was made to the nature of the tax as be-
ing direct or Indirect.
We are now permitted to broaden the field OF
inquiry and to determine to which of the two
great classes Il tax upon persons entlre IN
come. whether derived from rents or products
or otherwise, of real estate. or from bonds,
stocks, or other forms OF personal property oe-
longs: and we are unable to conclude that the
enforced subtraction from the yield of all the
owners real or personal property, in the man
, ner prescribed, is so different from tax upon
the property itself; that it is not a direct, but
nm indirect tax in the meaning of the constitu-
tion.
} We know of no reason for holding otherwise
than that the words direct taxes on the one
hand, duties, imposts and excuses" on the
other were used in the constitution in their
natural and obvious sense; nor, in arriving at
1 what those terms embrace. do we perceive any
v ground for enlarging them beyond or narrowing
them within their natural and obvious import
at the time the constitution was framed and
ratified.
= The chief justice then reviewed the
Q history of the struggle in the constitu-
tional convention as to the power to be
granted the government in the matter
of laying taxes; the views of early con-
81 stitutional writer's and expounders,
and the early decisions of the court,
l. and continued:
If The constitution prohibits any direct tax un-
e less in proportion to numbers as ascertained by
the census and in the light of the circumstances
to which we have referred is it not an evasion
u of that prohibition to hold that general unap-
e. portioned tax imposed upon all property owners
d as a body for, in respect of their property, is
,e not direct in the meaning of the constitution
but confined to the income therefrom!
'e Whatever the speculative views OF political
III economists revenue reformers may BE- can IL
1T be properly held that the constitution taken in
ia its plain and obvious sense and with due regard
TO the circumstances attending the formation
81 of the government, authorizes general unap-
portioned tax on the products OF the farm ana
Mt the rents of real estate although imposed mere
nd ly because of ownership and with no possible
- means of escape from payment as belonging to
~ totally different class from that which in
nc clrdes the property whence the income pro-
lis ceedS!
There can be but one answer unless the con-
stitutional restriction is to be treated as utter
li ly llusory and futile and the object or It's tra-
IL ers defeated
ge an hour in the reading of his opinion
I'm and was followed by Justice Harlan
,es who read the first dissent from the
ne Judgment of the court. Justices Jack
on son and Brown also read dissenting
nd opinions Justice Harlan said:
ay In my judgment-to say nothing of the disre
,as gard Of the former adjudicationS OF this cour
and of the practice Of the government for
century-this decision may well excite tn
gravest apprehensions. 1t strikes ut the yer
foundation of national authority In that IL ue
uld MES to the general government, power whlc
is, or may, ut some time in great emergenc
nal such rs that of become vital to the exist
-, ence and preservation of the Union.
'no 1t Is cause for profound regret that the high
ON est judicial tribunal of the land has thought
re- appropriate to intimate that the law now peior
ba us had it's origin in desire upon the part or
majority in the two houses of congress TO In
isI pose undue burdens upon the people OF parSicu
'ec- lor states. | am unable to perceive that IN
mt performance OF our duty should depend In an
degree upon an inquiry as to the residence
,top the persons who are requlreG Dy inc sbaIuIe
on, pay this income tax
,ha. Upon the question of the genera
THAI unconstitutionality of the law tn
ther court was divided as follows:
icle. Against the law, Chief Justice Fulle
,eed Justices Field, Gray, Brewer and Shira
i in For the law, Justices Harlan, Brow
ible jackson and White.
20 IN Internal Revenue Commissioner Mi
aeit- Ter says that under Section 1920 of I'll
yet revised statutes, all the money paid
rec on account of the income tax Will
refunded to the payers by the treasul
StI department without delay. Acting u
ia =, der this section internal revenue tax
Ter II wrongfully collected are daily relunu'
con- bv his Office, and the same action W
e the be taken as to repaying the income u u
NlW 30. go alNY