The daily morning journal and courier., 1895-04-09
IS Yo1D IY FART.
The Supreme Court Gives q Decision on
 Income Tax Law.

Income Tax Law.
 Washington, April S.-The supreme
 court has declared the income tax law
 void in part. The incomes from real
 estate and state and municipal bonds
 are exempted from the provisions.
 These were expected to be the most
 profitable sources of revenue for the
 government under the act. It is believed that an extra session of congress will be necessary to make good
 the deficiency in the government rev enues.
 The opinion of the chief justice de- clares that the levy on rents from real
 estate is unconstitutional as being a direct tax, and that the tax on muni- cipal and state bonds is unconstitution-
 al,
 On the other points the court is equal ly divided, and no opinion thereon is
 given. Ft
 The decision of the court below on these points is reversed and a similar
 entry made in the case of John G.
 Moore,
 Justice Field delivered dissenting opinion.
 The following is an official synopsis of Chief Justice Fuller's opinions; The
 courtis ofopinion, 1, that the constitution federal taxation is divided into two clauses-direct taxes and duties, inn ports and excises.
 2. That the imposition of direct taxes is governed by the rule of appointment among the several states according to numbers, and the imposition of duties, imposts and excises by the uniformity throughout the United States
 3. That the principle that taxation and representation go together was in- dicated to be and was preserved In the. constitution by the establishment of the rule of apportionment among the sev- 9ral states, so that such apportionment should be according to numbers in each state.
 4. That the states surrendered their power to lay imposts and to regulate commerce to the general government, and gave it the concurrent power to levy direct taxes in reliance on the protection afforded by the rules pres cribed, and that the compromises of the cannot be disturbed by leg islative action.
 5. That these conclusions result from the text of the constitution and are SUD- ported by the historical evidence fur nished by the circumstances surround | ing the framing and adoption of that instrument, and the views of those who framed and adopted it.
 6. That the understanding and expec- l tation at the time of the constitution | was that direct taxes would be levied | by the general gov arnment except un- der the pressure of extraordinary ex- igency, and such has been the practice down to August 15, 1894 If the power to do so is to be exercised as an ordin-lI ary and usual means of supply, that fact furnishes an additional reason for circumspection in disposing of the pres ent case.
 2. That taxes on real estate belong to the class of direct taxes, and that the taxes on the rent or income of real es- tate which is the incident of its owner ship belong to the same class.
 8. That by. no previous decision of this court has this question been ad- judicated to the contrary of the con- clusions now announced.
 g. That so much of the act of Aug ust IS, 1894, as attempts to impose a tax upon the rent or income of real estate without apportionment is invalid. | The court is further of the opinion that | the act of Angus 15, 1894, IS Invalid so far as it attempts to levy tax upon | he income derived from municipal | bonds. As municipal corporation is the representative of the state, and | 1ne of the .instrumentalities of the state the property and revenues ,f municipal corporations are not the subjects of federal taxation, nor is the ncome derived from state, county and securities. since taxation on he interest therefrom operates on he power to borrow before it is exer- ,ised and has a sensible influence on he contract and therefore such tax S a tax on the power of the states and heir instrumentalities to borrow money md consequently repugnant to the con- ititution
 Justice White dissented from the flew of the court and protested against reopening of the decisions of the ourt of hundred years past. He con- urred with the majority of the court, however, upon the question of the tax .tion of state and municipal bonds
 Justice Harlan was of the opinion hat a tax on gains, profits and in ome derived from rent of lands was not direct tax; that under numerous de- { isions of this court the income derived rom municipal bonds was not the sub- ect of specific taxation in any form " the United States In other matters