Bismarck weekly tribune. [volume] (Bismarck, Dakota [N.D.]) 1884-1943, 1895-04-12
This one IS OFFICIAL
Decision of the Supreme Court
in the Income Tax
Cases.
1T is READ BY JUSTICE FULLER
Rents and Income From State
County and Municipal
Bonds Exempt.

WASHINGTON, April S.-In0 anX-
iously awaited, decision of the United
States supreme court in the income tax
was rendered by Chief Justice Fuller.
The court knocked out the law so far as
it taxed incomes derived from rents
and also from state county and munich
pal bonds. By tie vote of the court
the law was sustained in other respects.
The courts conclusions after review
ing the historical and other phases Of
the question were as follows:
In Charles Pollock versus the Farm
ers Loan and Trust company ct al. 1t
is established:
1. That by the constitution federal
taxation is divided into two great
classes direct taxes and duties, imposts
and excises.
2. The imposition of direct taxes is
governed by the rule Of apportionment
among the several states, according to
numbers and the imposition Of duties,
imposts and excises by the rule Of uni
formity throughout the United States.
3. That the principle that taxation
and represen tation together was in
tended to be and was preserved in the
| constitution by the establishment of the
rule Of apportionment among the sew
eral states, so that such apportionment
should be according to numbers in each
| etate.
| 4. That the states surrendered their
power to levy imposts and to regulate
commerce to the general government
and gave it the concurrent power to
| levy direct taxes in reliance on the pro-
lection afforded by the rules prescribed,
and that the compromises OF the consti-
tuition cannot be disturbed by Legislative
action
5. That these conclusions result from
the text Of the constitution, and are
supported by the historical evidence
furnished by the circumstances sur
rounding the framing and adoption Of
that instrument and the views Of those
who framed and adoptedit.
| g. That the understanding and ex-
pectation at the time Of the adoption of
the constitution was that direct taxes
would not be levied upon the general
government, except under the pressure
of extraordinary exigency and such has
been the practice down to Aug. Is,
1894. If the power to do SO is to be ex-
ercised as an ordinary and usual means
. of supply, that fact furnishes an addi-
tional reason for circumspection in dis
posing Of the present case
:. 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 it's own
ership, belong to the same class.
8. That by no previous decision of
this court has this question been adju-
dicated to the contrary of the conclu-
slons now announced.
8. That so much of the act of Aug.
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 opinion that
the act of Aug. 10, 1894, is invalid so
far as it attempts to levy tax upon
the income derived from municipal
bonds. AS a municipal corporation is
the representative Of the state and one
Of the instrumentalities Of the state
government, the property and eyenues
of municipal corporations are not sub
jeots of federal taxation, nor is the in
come derived from state, county and
municipal securities, since taxation on
the interest therefrom operates on the
power to borrow. before it is exercised and
has q sensible influence OH the contract,
and therefore such a tax is a tax on
the power Of the states and their instru-
mentatalities to borrow money, and
consequently repugnant to the consti-
tuition.
Upon each of the other petitions
argued at bar, to wit:
First Whether the void provisions
as to rents and incomes from real estate
invalidates the whole act.
Second us to the income
from personal property as such, the act
is unconstitutional, as laying direct
taxes.
Third Whether any part Of the tax
if not considered as a direct tax, is in
valid for want of uniformity on either
OF the grounds suggested.
The justices who heard the argu-
ments are equally divided and there