The herald., 1895-05-08


previous decisions. This conclusion is
one of which [ ain unable to feel the
force. or appreciate the justice. and as
the question is of immense importance to
the government politically and pecunar-
ily, | shall consume few moments in
respectfully urging its consideration.
at is i'm po;tat to bear in mind the pre-
else question. 1t is not whether there
may not be a tax on rents which must
not be deemed to be tax on land pro-
ducing them. 1t is not whether a land
tax measured by rents or rented value
may not be the most efficient and most
c method of taxing land. The
question is does this income tax law
create tax which is necessarily to be
deemed tax on real estate?
''For answer the best source of informa-
tion is, of course. the statute itself. The
most superficial examination shows that
no real estate tax as such is intended by
congress. If it had been. there would
have been II provision for the apprase-
ment by rental value or otherwise, OF
vacant and unproductive land. If it had
been, there would have been provision
for the apprasement by rental value or
otherwise. of houses and grounds which
are occupied as honesteads and for liur-
poses of private enjoyment and pleasure
The sOwners of vacant unproductive
lands held for investment and specula-
tion, whether they be city lots or thous.
ands OF unimproved acres. pay nothing
under this law OH account Of such lands.
The millionaire, with a half-million dol
lar mansion in the city and an equally
costly residence by the seaside, pays moth
ing under this law The manufacturer
or the railroad corporation, the very
basis OF whose business is the interest III
real estate occupied and used therefor,
pays nothing under this law OH account OF
such real estate. 1t is impossible to con-
tend. therefore, that this law contem-
plates real estate as such, as the subject:of
the tax imposed by it. If there could be
a possible doubt on this point it is ex-
cluded by the enumeration Of the subjects
for the tax contained in section %. Each
and every one is personal property. and
so carefully is the distinction observed
that when the clause imposing the sue
crsson tax is reached it is expressly linn
tied to money and the value of all per-
sonal property acquired by gift or in
hertancc.'
''Such being the unmistakablc purpose
of the law, is it true that congress has
stultitiei itself? Is it true that it has
managed to do the very thing that it
meant to avoid doing? That is supposed
to be the result because taxpayer s
rents are placed among the constituents
OF his taxable income. But the intention
OF congress is to be recognized and effec-
tuated if possible, and its inclusion OF
rents in valuable income is not to be
suffered to defeat that intent If any leglti-
mate view of the statute will prevent 1T.
Can such view be taken? | respect
fully submit not OILY that it can be taken
but that it should-that it is the only rea-
sonable and best way. The opinion of the
courts deal with the court as if rents
we're the only subject of the income tax
law. That is not, | submit, the true way
of looking at the matter But isuppose
it be adopted what follows? We then
have II statute dealing widh the landlords
as class, taxing them because of their
vocation of landlord and measuring the
tax by rents actually received"
Attorney Ge neral Olney began to speak
| on the income tax at 2:20 p. m. He said
at the outset he was unable to eel the
force or appreciate the justice of the
courts opinion that rents of real estate
were not embraced within the scope of
the previous decisions of court legalzing
the income tax. He then proceeded to
urge reconsideration of the courts re
cent decision exempting rents from the
scope of the income tax law.
The statute, however, cannot properly
be looked at in thast way. 1t is not a
statute imposing a tax upon a particular
class of persons. namely landlords. in re-
pect to a particular source OF income.
namely rents.
1t is statute, special exemptions be-
ing not now considered. 1t is statute
taxing all persons having incomes in re-
spect of all sources OF inco mes.
The taxpayer pays this year according
70 his money spending ability of last
year, and it is entirely conceivable that a
man who this year does not earn a cent
and is without cents worth of prop
erty, real or PERSONAL may, nevertheless
be assessed on hundreds of thousands of
dollars of income actually received by him
laSC year. Gu tHlS is bHC SOT6 OI UHX
which is called a tax on real estate for 10
other reason than that last years rents
form part of the yardstick by which this
years money spending capacity is meas
ured.
"A greater error, l submit, could not
easily be committed.
''If the distinction Ibetween personality
and realty in the matter of taxation is
made by the constitution itself-and that
is necessary assumption of the arg,i-
ment-where does this court get the au-
thority to set it aside as a matter of form?
No such authority exists.
1T may be tax upon personally in
the shape of rents, and is the same thing
to the landlord pecuniarily as tax upon
the land itesef.
'But landlords are not the only parties
concerned. The whole people are inter
ested since, to them. it is the first import
ance that the constitution should be re-
spectsd in it's entirety and that no branch
of the government should undertake to
deal with any part of it as mere matter
of form.
at is intimated that, logically speak
ing, if tax on real estate is direct tax,
So is tax on personal property, and that
if tax on rents is tax oa real estate,
SO is tax on interest and dividends tax
on the capital producing them.