The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1895-03-08

4
islation, Affecting Less Than Two Per
Cent of Our Citizens.
WASHINGTON, March S.-The supreme
court did not reach the income tax cases
until o'clock yesterday when w. ID.
Guthrie was recognized to open the case
for the appellants. He appeared especially
for Messrs Pollock and Hyde, who appeal
the cases against the Farmers Cont
mental Trust companies, of New York,
from the decision of the United States
court of appeals for the southern district
Of New York
Mr. Guthrie devoted himself TO an out
line of the argument proposed TO be made
by the counsel for The appellants, and had
not concluded when the court at 4 o'clock
adjourned for the day.
He stated that they would depend prin-
cipally upon showing that the present in
come tax law is unconstitutional because
of its want of uniformity and quoted at
length from the provisions of the law to
show that the tax is not uniform, contend
ing that congress had no right under the
constitution to levy a tax duty, excise or
impost which was variable or lacking in
uniformity as to individuals or corpora
tions, because it was the fundamental rule
that burdens in these respects should be
equally upon all alike
Mr.. Guthrie said the two cases against
the trust companies were very similar but
that he would devote himself principally
to the Pollock case. He said Mr.. Pollock
was a shareholder in this company, the
net incomes or profit of which during the
past year subject to the income tax ex
ceeds 5000, 900, of which $4,000 represents
rents of real estate and about S60,0 in
vestments in municipal bonds, which lat
ter investment could not, he claimed, be
taxed under a former decision of tho su
preme court
Mr.. Guthrie asserted that the provision
of the law exempting all incomes under
$4,000 would cause it to fall upon less than
per cent. of the population of the United
States, and the law was therefore class
legislation. He also showed that the tax
was not uniform as regards corporations,
of which a favored class were exempted,
as, for instance mutual insurance com
panies and building associations, as well
as partnerships and religious and benevO-
lent institutions.
As to the exemption of churches and
| benevolent concerns counsel would have
nothing TO say, as there was enough in the
other exemptions in cases where the ex-
emptions were in the interest of share
holders, though called by another name,
TO afford sufficient text for all they could
say.
As illustrative of the effect of the opera
ton of the law he pointed out that an in
dividual owning real estate bringing an
income of $500 would pay $50 tax. while
a corporation would be required to pay
double that amount. He also instanced
the case Of a partnership of five persons
doing "a business amounting TO S2OO 600 a
year which would be required to pay no
tax, while corporation composed of the
same persons would be compelled TO pay
64OO. In IA word he said the application
of the law would vary according to owner
ship.
The corporation was only an aggregation
of individuals, and in most corporations a
part at least of the stock was owned by the
middle classes. Referring to the exemp-
ton made in the interest of mutual insur-
ance companies he asserted that in the
United States there were 1900 such com
panies and that of these 900 were doing
business on the mutual plan, and he said
that in New York alone the wording of the
act exempting such companies would re-
lieve a thousand million dollars worth of
property from lUS op6rhblOu. Inc ledulnB
mutual insurance companies would secure
the benefit of an exemption on its income
amounting TO 100000 per year, while its
rival, organized on the stock plan, would
have to pay its income tax. This advan-
tage was given in the law, he asserted,
simply because some one wanted to favor
some particular mutual company.
Mr., Guthrie also dwelt upon the exemp.
J zion on the interest of the building and
loan associations, which were relieved of
the annual payments of 5000, 600 and whose
assets, it had been asserted, were greater
, than the combination of capital of all the
[ national banks. All that men have to do
TO eyade the operations of the law would be
to organize building and loan associations
The present arrangement is for Mr.. Sc.
ward to follow Mr.. Guthrie in behalf OF
the appellants, and for Assistant Attorney
General Whitney to speak next for tht
government, to be followed by ex-senator
Edmunds who will represent Mr.. Moore
In his suit for an injunction against Com
4 missioner of Internal Revenue Miller
MIR. J. c.. Carter will follow for the trus
companies, and Joseph NJ Choate will
close for Pollock and Hyde; but this orde
! of procedure may be changed