The record-union., 1895-04-10
Special to the REcoRD-UNIoN.

Special to the RECoRD-UNIoN.
WASHINGTON, April 9.-The decision
of the Supreme Court yesterday in the
income tax case has plunged the Internal
Revenue officials into almost inexplica-
ole mysteries and trouble. The more the
decision is studied the greater seem the
difficulties attending'a clear understand
ing OF its scope. The declaration that
rents and incomes from real estate are
exempted has opened up the question
whether the effect OF the decision is not
10 include all the profits OF whatever
character growing out Of real estate, in
Guiding farm products, timber, coal and
all mine products within the exemption
clause. Whether losses sustained through
bad rent debts and the amount of ex-
penses incurred collecting rents or for re-
pairs on houses are 10 be deducted from
incomes is also a mooted question.
Under the decision rents are not to be
! included in assessing the income tax.
Suppose. it is asked, mans income is of
mixed character, that is from real and
personal property. The former is ex-
empt. Can he deduct the expenses neces-
sary for the collection of his income from
realty from the income from personal
| property before making his returns
The question is puzzllng revenue collect
ors, and legal opinion on the point prob
ably viii be sought
Another grave question raised by the
decision Is whether the rOaG-bed, round
! houses, stations, etc., of railroads are real
estate or personal property within the
| meaning or the law. The laws OF several
a ra to Il fTa
on several others OF Importance involved
| In the opinion Of the court
As soon as verified copy of the opin-
! ion can be had the Internal Revenue Off
ciais will begin the preparation of sup
! Elementary regulations which will cover
in more or less general way the opinion
| OF the court. leaving the more abstruse
questions TO be solved as they are pre-
sented.
THE DECISION BINDING.
$50 far as the lower courts are con-
! cerned." said Attorney-Generai OIney
! to-day, the decision ofthe Supreme Court
| on the income tax law is as binding as if
| the whole court had been unanimous in its
favor. L cannot believe any Judge would
! grant an injunction to prevent collector
! from collecting the tax on incomes de-
rived from other sources than rents or
State and municipal bonds in the face of
! the supreme Courts action. The only
way l can see by which persons who OBJ
! ject TO paying the tax can secure judicial
action Is by paying the tax under pro-
/ test and entering suit for it's recovery
/ FURTHER PROCEEDINGS WILL BE BEGUN.
Attorney J. w. Wilson, who repre-
sented John q. Moore in the Court of
| Appeals in the recent income tax cases.
SAID this morning that further proceed
| ings would be begun immediately.
several parts OF the law will be at
/ tackled said he, the principal one being
! the exemption from taxation of incomes
under $1,000 annually. This will be at
! tackled as unjust discrimination. | can
not say just yet who Will be the COM
! plainants or what the title of the suits
/ will be, but they will be instituted prob
ably within few days and be pushed as
| rapidly as possible
! LOSS OF REVENUE BY THE DECISION.
! The debates on the income tax while
/ the bill for its imposition was under con
! sideration IN Congress are almost barren
| of figures showing the comparative i'm
! Dortance of the incomes from rents and
/ interest on county, municipal and State
| bonds IN furnishing a revenue to the
! Government 1t does not appear that
/ this matter was touched upon in the
/ House discussion, and it was only casu-
/ ally referred to in the Senate, Senator
/ Aldrich of Rhode Island prepared a state
| ment, placing The revenue likely to be
/ derived through the income tax at SIO0 =
/ OUU,OOO, and credlting rents and public
! bonds with about 80 per cent. of this
| amount
! Senator PETER, who made the prineinal
! speech IN the senate in ad vocacy OF an IN
! come tax, did not go into this branch of
| the question at all, but he said to-day in
/ an interview that he was of the oDinion
/ that between S9,OO0000 and SlO,00U,OOO OF
| revenue would have been derived from
1 those two sources If the Supreme Court !
! had allowed them TO stand, and he added
! that ne thought this amount would have
/ been about twO-LhiTds OF the revenue
| produced by the income tax.
1he census reports show" he eaid
! that % per cent OF the people of the
| \ nlted States are reuters, and it is to be /
! inferred that about thIs proportion OF the |
| land ls occupied by renters. The land of |
! the entire country, with Improvements
| added, IS put down as worth SIS, ,544 J44. !
| 80 OF this amount twenty billion dol |
! lars worth IS rented. The rental on that
! amount, at tie average rate of 5 per cent (
/ would be one billion dollars. Just what /
| proportion of that would come under the /
! law Is another matter, and that could not /
be gotten at accurately. But let us as /
sumo one-quarter OF 1t, or two hundred /
and fifty millions worth would be taxa !
ble income, that would give five million |
dollars of income taxes. That, l think, is a |
very low estimate. The bonds, munich |
pal, county and school districts, which |
would be subject to the tax, amount to |
| S9O6, ,2l3,053. Take one-quarter of this |
amount coming within the operations |
of tine law, and one arrives at the rate of |
2 per cent. on this amount, 81, ,53I, ,065, or |
a total on the two items of about nine and /
half million dollars"
Late this afternoon Commissioners
Miller decided to require all persons who |
have made returns to make affidavits to
the facts as to the amount of income re-
ceived from rents and bonds, and those
who have not yet sent in their returns to
make the necessary correction thereon
before doing So 1t seems probable the
final decision will be that yesterdays
opinion in effect eXempts incomes re-
! ceived from bonds ana rents, the latter to
! be strictly defined as the amount the .
landloard derives from his tenant. In /
computing incomes ii is believed it will /
De held that insurance, ordinary repairs
ana taxes on exempt property may be /
properly deducted. In that case it is
probable the courts Will be called upon
70 e& plaln just what yesterdays decision /
intended to exempt from the tax.
TALK OF EXTRA SESSION.
Private Secretary Thurber's attention
being called to the statement contained
In the Washington evening papers to-day
that the President was being flooded |
with kilograms from all parts of the
country, appealing to him to call an
extra session OF Congress TO reneal the
income tax law, said not one single tele-
gram or communication had been ra
ceived on the subject.