The herald., 1895-04-09

| be resorted TO and take IL wouit be al
lowed without deciding the question of
/ constitutionalitv.
Eleventh This being the true theory
here adopted that it is necessary to pro-
nounce upon the constitutiohahty OF the
! law in order to protect the rights OF the
| stockholder seems to me to be sound.
/ Twelfth-The only decision referred to
/ in tie opinion as supporting the conclu-
! SION reached by the court are: Dodge VS..
! Wolscy, Is How, and Howes vs.. Oakland.
l0i [. 5. $50.
Neither of these authorities in my judg-
ment sustains the position III support of
! which 1t is cited. rhe first of these cases
involved question of state tax and there
lore was clearly outside OF the rule ap-
plleu IN the case of United States taxes.
The second case was II controversy be-
tween stockholders and a corporation re-
| Sardlng the administration OF corporate
affairs. Ii involves no question OF taxa
tlon whatever and therefore the decision
did not deal at all with the act OF CON
Sress or the enforcement on continuous
line ot decisions of this court, holding
that ii will not restrain the payment OF
tax or allow relief in the premises un-
I'll the party had paid and seeking redress
by SUING Tor recovery.
On the merits OF the act he made the
following points:
flrst-Ihe government OF the United
States possesses plenary powers OF taxa
tion-all powers which belong to any gov
ernment Us such-subiect only to the I'M
itation imposed by the constitution III
1orbdding the levying OF an export tax;
Second-This power unlimited Itself,
is limited as to form by the requirement
that direct taxes shall be apportioned ac-
cording to population and uuties, excuses
and imposts, shall be uniform throughout
the United States.
Tbird-The Limitation as to apportion-
ment is not Il limitation on the power of
taxation, but a limitation OF the manner
in which the power shall be exercised.
Fourth-WhetneI federal income tax
is direct or indirect does not depend alone
ON the theories of economists but upon
the sense in which these words are used
in the constitution as heretofore inter-
preted.
Ninth-From 1861 to 1865 many acts
were passed by congress levying an in
come tax. These acts imposed a tax upon
incomes nom every source. They were
passed by ov erwhelming ma jortles, and
their enactment demonstrates tbo con-
Sensus of opinion III regard to the effect
of the Interpretation of the constitution
made by this court many years before.
Tenth-Every case in the lower courts
involving the validity of these laws which
can be found was decided i'll their favor
Justice Waite then reviews each of the
previous decisions of the supreme court
in similar tax cases, and adds:
The opinion OF the court today in hold
ing that the inclusion of the rentals of
land in income tax renders the tax direct
quod hoe, not only reverss the decisions l
have cited, but involves it seems to me,
a contradiction in terms. Ii the income
tax is not direct tax, how can it be said
that the inclusion therein OF rentals de-
rived from real estate makes it a direct
tax pro tanto?
The question is not according to my
view, whether such inclusion affects real
estate, but whether the tax thus levied IS
a direct tax thereon, within the meaning
OF the constitution.
According to the very words of the
statute this tax Is indirect. In no sens
5 it tax on land as such. 1t places no
burdens on real estate-if it is not rented.
or if the rent is not collected, or if 'he
owner occupies his land himsclf-it puts
no direct burden on land under any cir
cumstances, for it allows the deduction
from the income derived from the land
and all other sources, of 5000, as well as
all expenses incurred Ill the transaction
of business. The fallaCy of the opinion, as
| see it, lies in the assumption that the
constitution forbids an indirect taxation
of land by the federal government with
out apportionment among the states. In
my Judgment the position here assumed
IS full OF danger to our institutions. Inc
august power lodged in this court of
passing upon the constitutionality of acts
of congress has always been discreetly and
carefully exercised. | believe this is the
first case in our history where authority
which has been conceded to congress by
nearly one hundred years of acquiescence,
in departments of the government, and
has been sanctioned by repeated adjudi-
cations of this court, has been judicially
denied
The effect of all the opinions delivered |
is to show that the court was unanimous |
in the opinion that the law is constitu-
tional as to municipal and state bonds. |
that Chief Justice Fuller and Justices |
Field, Gray Brewer, Brown and Shiras
hold it to be invalid on incomes derived |
from rents, and Justice Harlan and JUS !
tice Waite dissented from this opinion as
to rents. 1t is impossible to state the |
exact division as to the validity OF the
other parts OF the law further than was
disclosed by the proceedings. 1t appears
quite clear that Chief Justice Fuller and
Justices Harlan and Waite voted to sus-
tain the other parts of the law, and the
best opinion obtainable is that Justice
Brown stood with them in his opinion
which would leave Justices Field. Gray,
Brewer and Shras as the opponents of
the law as whole.