The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1895-05-28
Five Justices Of United States Su-
preme Court Decide Against It.
-FOUR GIVE DISSENTING OPINIONS.
Law Regarding Tax On Rents and Bonds
OBSERVATION-DISCLOSURES Thing Must
Be CIassed In Same BOx-POwer to
Tax through ApportIonment Conceded

WASHINGTON, May 2O.-After being
twice heard in the United States
Supreme Court the income tax wa:
finally decided today to be invalid and
unconstitutional. There were four dis
senting opinions delivered, one each
by Justices Harlan, Brown, Jackson
and White, showing that the court
had stood five to four against the law.
While the opinion of the Chief JUS
tice was largely review of the gen
eral aspects of the questions involved,
he based the opinion of the court today
upon the argument that the provisions
of the law regarding the tax on rents
and bonds were so essentially factor
OF it as to render all other parts of it
dependent on them, and in accordance
with the well known rule of law bear
ing on this question, the law as a
whole must be declared invalid.
The opinion was delivered by Chief
Justice Fuller and makes long and
exhaustive article, so as toy preclude
publishing more than the following
extracts:
sour previous decision was confined
to the consideration of the validity of
tax on income from real estate and on
income from municipal bonds. The
question thus limited was whether
such taxation was direct or not in the
meaning of the Constitution, and this
court went no farther as to tax on in
comes from real estate than to hold
that it fell within the same class as the
source whence the income was derived;
that is, that tax upon realty and a
tax upon the receipts therefrom were
alike direct; while as to income from
municipal bonds, that could not be
taxed, because of want of power to tax
that source, and no reference was made
to the nature of the tax as being direct
or indirect. We are now permitted to
broaden the field of inquiry and to de-
termine to which of two great classes
q tax upon PERSONS entire income,
whether derived from rents or products,
or otherwise, of real estate, or from
bonds, stocks or other forms of personal
property, belongs; and we are unable
to conclude that enforced subtraction
from the yield of all owners of real or
personal property in the manner pre-.
scribed is so different from a tax upon
the property itself that it is not a
direct, but an indirect tax in the mean
ing of the Constitution.
HThe words of the Constitution are
to be taken in their obvious sense,
and have a reasonable construction.
We know no reason for holding other
wise than that the words direct taxes
on one hand and duties, imposts and
excuses on the other were used in
the Constitution in their natural and
obvious senses; nor in arriving at
xUbot fhnSn fnrC1o hronn do
ceive any ground for charging them
beyond or narrowing them Within the
natural and obvious import at the
time the Constitution was framed and
ratified. And passing from the text,
we regard the conclusion reached as
inevitable wher the circumstances
which surrounded the convention and
controlled its action and the views of
those who framed and those who
adopted the Constitution are consid-
cred.
at is apparent that the suggestion
that the result of compliance with the
fundamental law would lead to the
abandonment of that method of tax
alton altogether, because of inequali-
ties alleged to necessarily accompany
its pursuit, could not be allowed to
influence the conclusion, but the sug-
gestiOn not unnaturally invites atten-
ton to the contention of the appel
lant's counsel that the want of uni
formity and actuality in this Act is
such to invalidate it.
"Ghe power to tax real and personal
property and the income from both
through appOrtiOnment is conceded;
that such a tax is a direct tax in the
meaning of the Constitution has not
been denied, and in our judgment can
not be successfully denied, and yet
we are thus invited to hesitate in the |
enforcement of the mandate of the |
Constitution which prohibits Congress
from laying direct tax on the rev |
enue from property of the citizen |
without regard to State lines, and in |
such a manner that the States cannot !
intervene by payment in the regula- |
ton Of their own resources, lest a gov |
eminent of delegated power should be |
found to be not less powerful, but less |
absolute, than the Imagination of its |
had supposed.
"Being of the opinion that so much |
of the sections of this law as lays a
tax on income for real and personal |
is invalid, we are brought to |
the question of the effect of that con-
clusiOn upon these sections as whole. |
1t is elementary that the statute may |
be in part constitutional and in part |
unconstitutional, and If the parts are
wholly independent of each other,
that which is constitutional may |
stand, while that which is unconstitu-
5ional will be rejected.
According to the census, the true
valuation of real and personal property
n the United States in 1890 was
S65, 0o7, 091, 191, of which real estate
With Improvements thereon made up
S39, 544 ,544, 333. Of course from the lat
er must be deducted in applying these
ections all unproductive property
whose net yield does not exceed $4,000;
)ut, even with such deductions, it is
evident that the income from realty
ormed a vital part of the scheme for
he taxation embodied therein. If
hat be stricken out, and also the in
ome from all invested personal pro-
'erty, bonds, stocks and investments
# all kinds, it is obvious that by far