Morris tribune. [volume] (Morris, Minn.) 1880-2000, 1895-05-01
DIRECT TAX.
Defnftion OF the Term by Chief Justice
Fuller.


Fuller.
WASHINGTON, April 26.--The text Of
the opinion of Chief Justice Fuller in
the income tax case which was deliv-
cred April s was made public Wednes-
day. The opinion is preceded by an
elaborate review of the his
tory i of the case. The opinion
proper is introduced with the
statement that ''the constitution pro-
vides that representatives and direct
taxes shall be apportioned among the
several states according to numbers
and that no direct tax shall be laid
except according to the enumeration
provided, and also that all duties, inn
posts and excuses shall be uniform
throughout the United States"
Thus in the matter of taxation the
constitution recognizes the two great
classes of direct and indirect taxation,
and lays down two rules by which
their imposition must be governed,
namely, the rules of apportionment as
to direct taxes and the rule of uni
formity as to duties, imposts and ex-
cises.
BY far the greater part of the opinion
is devoted to the consideration of the
question whether a tax on rents is a
direct tax within the meaning of the
constitution.
The opinion here reviews numerous
decisions under the act of 1861, includ-
ing the Springer case, which was
largely RELIEF upon by counsel for the
government in the present case to sus-
tain their contention. Chief Justice
Fuller says:
ut is conceded in all these cases, from that
of Hilton to that of Springer, that taxes on
land are direct taxes and in none of them
is it determined that taxes on rents or income
derived from land are not taxes on land.
Summing up, the chief justice says,
among other things:
1.-The requirement of the constitution is that
no direct tax shall be laid otherwise than by APP
portionment. The prohibition is not against di-
rect taxes on land from which the implication
is sought to be drawn that indirect taxes on
land would be constitutional, but it against all
direct taxes, and it is admitted that tax on
real estate is direct tax Unless, therefore,
a tax upon rents or incomes issuing out
of lands is intrinsically so different from
tax on the land itself that it belongs
to d wholly different class of taxes, such
taxes must be regarded as falling within
the same category as tax on real estate
60 nomine. The name of the tax is unimpor-
tant. The real question is, is there any basis
upon which to rest the contention that real es-
tate belongs to one of the two great classes of
taxes and the rent, or income, which is the
incident of its ownership, belongs to the other:
We are unable to perceive any ground
for the alleged distinction An annual tax
urDn the annual value or annual use Of real
estate appears to us the same in substance as
an annual tax on real estate, which would be
paid out of the rent or income This law taxes
the income received from land and the growth
or produce Of the land.
Nothing can be clearer than that what the
constitution intended to guard against was the
exercise by the general government of the
power of directly taxing persons and property
within any state through majority made up
from the other states.
I'VE are of opinion that the law in question:
SO far as it levfes a tax on the rents or income
of real estate, is in violation of the constitu-
tion and is invalid
Comparatively brief space is devoted
to the question of a tax on the income
derived from municipal bonds. The
opinion says.
1.-The tax on government stock is thought by
this court to be a tax on the contract. a tax on
the power to borrow money, on the credit of
the United States, and consequently to be re-
pugnant to the constitution.
Applying this language to these municipal
securities, it is obvious that taxation on the
interest therefrom would operate on the power
to borrow before it is exercised and would
have a sensible influence on the contract, and
that the tax in question is a tax on the power
Of the states and their instrumentalities to
borrow money, and consequently repugnant to
the constitution.