Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1895-04-09
Portions OF Income Tax Statute Are
Incompatible With Constitution.
Supreme Court Is Divided on
the Question.
Rents and Stale and Municipal Bonds Ex.
, empi From Taxation.

Tho members OF the court, except Justice
Jackson, entered the chamber promptly ut
noon. a fow cases OF minor Importance
were Disposed Of, after which tho great
case OK tho day WAS read by Chief Justice
Fuller The conclusions Of tho court were
stated to be ms follows:
l. That by tho constitution federal taxation
IN divided into two great classes direct taxes
and duties, imposts and exclses
Y. That the imposition or direct taxes IL
governed by the rule of apportionment among
the several states according TO numbers, and
the imposition OF duties, impost and cxcises by
rule OF uniformity throughout the United
States.
3. That the principle that tho taxation and
roprf sentation go together was intendod 10 be
and was preserved In the constitution hy the
establishment OF the ruio OF epportonmcnt
among the several states, so that such appOr-
tionment should be according to numbers in
each state
A. That the states surrendered their power
to levy impost3 and TO regulate commerce 90
the general goYcrnment and gave it the con
current power TO levy direct taxes in reliance
on the protection afforded by thG rules pre-
scribed, and that the compromises OF the con
stitution cannot DO disturbed by legislative
action.
g. That these conclusions result from the
text of the constitution and are SUPPORTED by
the historical evidence furnished by the cir
cunstances surrounding the framing and
adoption OF that instrument, and the views OF
those who framed and adopted it.
O. That the understanding and expectation
at the time OF the adoption OF the constitution
was that direct taxes would not be levied by
general government except under the pressure
of extraordinary oxigency, and such has been
the practice down to Aug. Is, 1894 III the
power to do so is to be exercised as ordinary
and usual means OF supply, that fact furnishes
an additional reason for circumspection in dis
posing of the present case.
z. That taxes on all real estate belong to the
class OF direct raxes and that the taxes on the
rent or income of real estate. which Is the in
cident Of its ownership, belong TO the same
class
g. That by no previous decision OF the eourt
has this question been adjudicated TO the con-
trary OF the conclusions now announced.
o. That much OF the act OF August 1a.
1894, as attempts to impose tax upon the reIt
or income Of real estate without apportion-
ment Is invalid
The court is further ~ the opinion that the
act OF Aug. l5, 1894. is invalid so far as 1t AZ.
tcmpts to levy a tax upon the income derived
from municipal bonds AS n municipal cor
poration is the representative or the state and
one OF the instrumentalities OF tie state gov
ernment, the property and revenues OF munich
pal corporations not the subjects OF fed
eral taxation, nor is the income derived from
state, county and municipal securities, since
the power TO borrow before 1t is exercised and
has sensible influence on the contract, and
therefore, such tax il tax Oh the power
of the states and their instrumentalities to
borrow money and consequently repugnant to
the constitution.
Upon each of tho other questions argued
at the bar, to wit:
l. Whether the void provisions as to rents
and income from real estate invalidates the
whole act?
q Whether as to the income from personal
property as such, the act Is unconstitutional
as laying direct taxes9
g. Whether any part Of the tax IL not con-
sidered as n direct tax, is invalid for want OF
uniformity on either of the grounds suggested2
The justices who heard the argument are
equally divided, and, therefore, no opinion is
expressed.
Reading Of the Opinion.
There was only one member of the
bench absent-Justice Jackson, who has
not boen able to be In attendance upon
the court since last fall. and who has not
participated in the consideration Of the
case in any way.
The judges fled in promptly at high
noon, ana there was very little prelimi.
nary work before the ohisf justice began the
delivery Of the opinion, which consumed
an hours time.
Mr.. Fuller began with brief reference
to the question Of jurisdiction In tho case.
This point had, he said, been frequently
referred to, but he dismissed 1t by saying
that as the question had not been raised
In the court below and had been waived
In the argument Of the case in the supreme
court, there appeared no objection to con-
sidering the case purely on Its merits.
Proceeding to this end, he gave his at
fn ka oh IN ha 1nx
made by the appellant, quoting the prin-
cipal ones as follows:
1. That the net imposes . direct tax in re-
spect to real estate, rents, issues and profits
well as of the income and profits OF personal
property and, not being apportioned, is in vio
laton OF sectiou Of article OF the constitu
ton
g. That the law, IL not imposing direct tax
IL nevertheless unconstitutional in that its pro
visions are not uniform throughout the United
States, and do not operate with the same force
and effect upon the subject Of the tax wherever
found, and in that 1t provides exemptions in
favor OF individuals and oopartnerships Will,
denying all exemptions to corporations having
similar incom. derived from like property and
values and provides fer othor exemptions and
Inequalities i'm violations Of section OF article
of the constitution.
.. That the act provides no exemption Of tn,
tax upon incomes derived from the stock and
ties and municipalities therein, which stock
and bonds are not proper subjects for the tax
ing power of congress. The income from these
securities In the United States amounts I,
over s65,00,0O0 per annum, OH whica the tota
annual income tax wonld be yl 100000
Points at Issue.
The body of the opinion was devoted tc
the consideration of the question from
constitutional point of Wow. The chic
Justice said that under tho constitution
federal taxes were divided into direct
taxes, and duties imposts and cxciscs
and laid down the rule that diroct taxes
should, under that instrument. bc gov
ernod by tho rule of fapportionmont amonG
tho several states, according to population
Referring To tho question Of direct taxa
ton, no said that the trainers OF the con
stitution had before them more promi.
L. al..x. lar 4laass lha lau