The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-04-25

am TIE ~zaf ansxtson IS, L. thers any
fsS*s mpcn vrhAch % rest the cGnten1ol
xhzs real estate belongs 70 ere Of The Two
great classes or taxes. ard me rent or n
come. which is th@ trci1ent ef It's o~hsf-
shin. belongs 20 IRE other We are M
ahs@ - perceive any ground for me al
Legged distinction. Al annual tax upon
fhsnznnuaf value or ANIMAL uses Of real
appears 20 as the sac1e IN s0b-
stance SIS an annual tax on real estate
Hhicn would be paid out OF the rent or
income. This Law taxes the income re-
ceived from land and the growth or pro-
duee OF the land
~Ju<sf~e Patterson observed in Hilto8s
case that Land. Independently OF lis pro
duets, - 81 m vslue. and certainly Ead
no thought that direct taxes were con-
fined 50 unpro~fEctfxe land II II De true
that by varying the form the substance
nav b. changed. X Is not easy % So
that anything would remain OF the itDl-
tsf4ons Of the constitution. or Of the rule
Of taxation and representation SO care
fully recognized AMI guarded IN favor o.
the citizens % each state But coAsl-
fgtional provisions cannot be tDus sFad-
81 L 81 the substance and not the form
which controls. as has. indeed. been es-
fa0Iisaed by repeated decisions OF ais
CCart.
TT Is not doubted that property owners
ought 20 contribute III just measure n
kf. EXPENSES OF the gov az AArAAA- - ~
the states and their municipalities, TINS
Is reached largely through the inposl-
ton Or direct taxes. As TO the federal
government. g. IS attained in part through
excuses and Indirect taxes upo Injuries
and consumption generally. 10 Which IL
rect taxes may be added 10 the extent the
rule OF ap-Dorrionment allows And
through one mode or the other the en-
tire wealth OF the country. real and per
sonAl. may be made. as u should De. 10
contribute 20 the common defense and
general welfare. But the acceptance OF
the rule OF app0rtionmeut was one or the
comnromaSe which made the adoption
OF the constitution possible. and secured
the creation OF that dual form OF govern
meat, SO elastic and 50 strong. which mas
thus far survived In undated FiEoT. IL
by calling A tax indirect. when TX Is es-
sentLa.ly direct, the rule OF protection
could be frittered away. one OF the great
landmarks defining the boundary be
tween the nation and the states OF when
IL Is composed. would have disappeared
and with IL one Of the buiwarks OF pri-
vate rights and private property.
we are OF the opinion that the law IN
question, SO far as IL leyies a tax on the
rents or income of real estate. Is in sio-
latfon OF the constitution and Is Invalid.
Comparatively brief space is devoted 10
the question OF a tax on the income de-
rived from municipal bonds. "Ihe con-
stitution." says the opinion 'cohtem-
plates the independent application by the
nation ard the states seVeraIiy or our
corstttu1 i0naI powers. As the states can
not tax the powers. the operations or tue
pr0uartv of the United States. nor the
means which they employ 10 carry tilciF
powers into execution, 50 II mas deem
held fhat the United States have no pow
er under the constitution 70 tax e{nac
the instrumenfalities or the property OF a
state. A municipal corporation Is the
representative of the state, and one or
the nstrumfntatitie OF state govern
ment. Ii was long z determined that
property and revenues OF municipal cor
porations are not subjects OF ieoefa1 tAA-
alton"
The opinfon concludes as follows:
.aThe law under consideration provides
that nothing herein contained shau APP
My 10 states. counties or municipalities
IL is contended that. although the prop
ertv or revenues OF the states or their
ins~frumentalities cannot be taxed. never
theless the income derived from state,
county and municipal securities can be
taxed. hut we think the same want or
power to tax the property or revenues or
the states or their nstrumentaliues eX-
lists in relation TO a tax on the an
comes from their securities. and Fer the
same reason. and that reason Is gwen oy
Chief Justice Maxwell in Weston vs..
Charlestown, where he says: The right
u tax the contract 10 any extent. when
made. must operate on the power 60 bor-
row before It 81 exercised, and have a
sensible influence on the contract, The
extent Of this power depends on the viii
of a distinct government To any extent,
however incousiderabIe. IL is a burden on
the operations OF government. 1t may be
carried to an extent which shall arrest
them entirely
The tax on government stock is
thought by the court 10 re a tax on con-
tracts. a tax on the power to borrow
none on the credit Of the United States,
and consequently TO be r%epugnant TO the
constitution. Applying this language to
these municipal securities. Il is obvious
that taxation on the interest therefrom
would operate on the power 10 borrow
before IL IS exercised, and would nave a
sensible influence on the contract. and
that the tax I'm question Is a tax on the
power Of the states and their iDstrumen-
t~alities 20 borrow money. ed consequent
~ repugnant 10 the constitution"
Customs Receipts in March.