Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1895-05-21
DEALT A DEATH-BLOW.
Supreme Court Says That Income Tax
Law Is Unconstitutional.
Source ofAnticipated Revenue
. Is Thus Closed.
Review Of the Points al Issue and How the War
Tax Worked.

WASHINGTON, May III. - Inc suprem
court has decided that the income tax 1
unconstitutional. Upon the question O
the general unJbnstitutionality of the Law
the court was divided as follows:
Against the law-Chief Justice Fuller
Justices Field, Gray, Brewer and Shiras
For the law-Justices Harlan. Brown
jackson and White.
Inasmuch as one Of these dissentin,
opinions was handed down by Justio
jackson, and as he was absent at the frs
hearing, when the court divided evenly OF
the question of sustaining the law on al
points except those as to the tax on rents
and bends, it follows that one Of the mem
bers of the court who at first pronounced
for the law, except on those two points
changed his attitude after the second argu.
ment.
The opinion of the court and the po-
sition of each of the Ipembers had been SO
accurately forecasted that no surprise was
expressed in any quarter at the announce
ments made.
1t should probably be stated that while
the cases in which these opinions were de-
Hvered are uniformally characterized as
the income tax cases, they are know n on
the court dockets as the cases of Cb...,-
Pollock VS.. the Fa~-.acrs Loan and Trust
p~-uy, and Lewis III. Hyde VS.. the Con-
'tinental Trust company of New York,
both appealed from the circuit court OF
the United States for the southern dis
trict Of New York.
The Stumbling Blocks.
The unconstitutionality of the law was
asserted upon several grounds. First-In
that it imposes a direct tax with respect of
real estate rents, issues and profits, as well
as of income and profits of personal prop
erty, which, not being appOrtioned, is in
violation of section 2, article 1, of the con-
stitution. Second-In that its provisions
are not uniform throughout the United
States, and provides for exemptions and
inequalities in violation of section 8, article
10. Third-In that 1t makes no exemption
of the tax upon income derived from the
stocks and bonds of states, counties and
municipalities, which amounts to $65, ,OOO,-
600 annually, and which is not proper
subject for the taxing power of congress.
4 Unsatisfactory Revenues,
Although the decision Of the court will
materially cut down the anticipated rev.
enues of the government, 1t is not thought
that 1t will necessitate an extra session OF
congress, unless some unlocked for con-
tingency arises to make 1t advisable. 1t
Is known that the administration does
not regard an extra session as necessary,
although the revenues during the last few
months have not been at all satisfactory.
The customs receipts, particularly, are
surprisingly low. During last January
the receipts were only $17, ,361 ,916, and dur
ing February they fell to $12, ,33S $50. Dur
= T.. ~ 80
$2,500,0O0, but April showed a falling of
to $12, ,086. During the same months
there has been a slight increase in the re-
ceipts from internal revenue resources,
those for April being $lO,64s,SSO. The
$34, ,246,3S6. On Feb. % it had been in
creased to nearly $3S,OOO0 900, and on April
30 to about $45, ,25O,OOO.
Interesting Data
In the first three years of the II years,
from 1853 to 1873 inclusive, during which
the United States collected an income tax,
the exemption was $500; the tax on in
comes from 5000 to $4,000 was per cent;
the tax on incomes over $4,000 was per
cent on $4400, and 5 per cent on all above
5000. From 1866 to 1867, inclusive, the
tax was 5 per cent on incomes from $500
to 5000, and ~ per cent beyond 5000.
From 1853 to 1871 the exemption was $1,000,
and in 1872 1873 1t was $1,000, the rate
remaining the same. Nearly $347 600, 900
was raised altogether. The highest amount
was about $73, 900, 600, In 1856, and the next
highest, $66 0OO, 600, in 1867.
The large amount of revenue from any
one class of incomes was in 1866 from
those above $1,000, which then yielded S34,-
bO0,000 but the next year it fell to $25, ,5OO,-
600, while the income from incomes below
$1,000, which was $26, ,0O0, 600 in 1885, rose to
e31 900 900 in 1857. The uniform tax of 5
per cent on all incomes over $1,000, which
was first collected In 1853, was then $32, :
100000, sank to $25 900, 600 In 1869, rose to
e27 900 600 in 1870, and sank to $10,6S0, 900
In 1871, though in that year $3, $50, 900 was
collected under the law making the ex-
emption 5000, so that the total collections
from this source in that year was $14, ,430,-
GOO.
Wide Variance In Figures.
The feature of these figures is their ex-
treme irregularity. For instance, per
cent on bank dividends in 1865 yielded
$l.i96 600, and in 1859 %, 769, 900, a shrink
age OF about 10 per cent, but the total col
lections from tax of per cent on in
dividual incomes shrank from $73, ,000, 900
to less than $35 900, 600. The exemption in
1855 was $500, and in 1869 it was 5000. In
1877, the last year that the tax was col
lected with much thoroughness, the total
revenue was only $l4,436, 600, and about
$6,OO0,0OO OF this came from dividends.
In 1859 1t was estimated that 10000 per-
sons In a population Of 100000 paid an
income tax, the total of which was $4O,-
100000. Allowing for the families of these
taxpayers, they represented only 1000, 600,
or in 40 Of the population.
Doctrine Questioned.
nATrAc Mo-. Of -Tbo Cnutbor,. D~u.t.-.