Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1895-05-23

NaSllngton, May Ill lie uCoIue
tax is declared unconstitutional IN
toto
The vote resulted five against the
conStitutionality of the law. Those
against the law were Chief Justice
Fuller and Justices Field Gray,
Brewer and Shiras; for the law, JUS
tees Harlan, White, Brown and Jack
son.
The conclusions of the court, which
were read by Chief Justice Fuller,
were as follows:
"First-.We adhere to the opinion al
ready announced, that taxes on real
estate being indiSputably direct taxes,
taxes ON the rents or incomes of real
estate are equally direct taxes.
"Second-We are of the opinion that
taxes on personal property or on the
income Of personal property are like
wise direct taxes
"Tnird-The tax imposed by sections
~ to 81 inclusive of the act of 1894, so
far as it falls on the income of real es-
tate and oil personal property, being Il
direct tax within the meaning Of the
constitution and therefore unconst-
tutional and void, because not appor-
toned according to representation, all
those sections constituting one entire
scheme of taxation are necessarily
invalid.
The decree bereiubefore entered in
this court will be vacated. The de
creeS below will be reversed, and the
cases remanded With instructions to
grant the relief prayed"
Sections - to 81 of the tariff act of
1894 referred to in the conclusions of
the court are all the sections of the
act relating to me income tax, so that
the entire income tax law is declared
void specifically.
Chief Justice Fuller then read the
main opinion, which, in substance fol
lows:
The constitution divided federal
taxation into two great classes, the
class Of direct taxes and the class of
duties, impoSts and excuses, and pre-
Scribed two rules which qualified the
grant of power as to each class. The
power TO lay u.rcct taxes, apportloned
among the several states in proper
tiOntiOn to IL representation III the
popular branch of congress, Il repre-
Sentation based ON population as as
certained by the census, was plcnary
and absolute, but to lay duties, impostS
and eXciSeS was subject TO the qualili-
cation that the imposition must be uni
form throughout the United States.
cur previous decision was confined
to the consideration of the validity of
the tax on the income from real estate
and on the income from municipal
bonds The question thus limited was
whether such taxation WAS direct or
not III the meaning of the constitution,
and the court went NJ farther rs to
the tax Oh incomes from real estate
than to hold that it fell within the
same class as the source when the
income was derived that is, that a tax
upon the realty and a TAX upon the re
cciptS therefrom were alike direct
while as to the income from municipal
bonds, that could not be taxed, be
cause of want of power to TAX the
source, and no reference was made 10
the nature of the tax as being direct
or indirect.
I'VE are now permitted to broaden
the field of inquiry and determine TO
which of the two great classes, tax
upon a persons entire income, whether
70 nTn1nptS
otherwise OF real estate, or from
bonds, stocks, or other forms of per-
sonal property. belongs; and we are
unable to conclude that the enforced
subtraction from the yield OF all the
owners real or personal property, IN
the manner prescribed. is so different
from a tax upon the property itself.
that it is not direct, but an indi-
rect tax in the meaning Of the constt-
4ution. The words Of the constitu-
ton are TO be taken in their obvious
sense. and to have a rea sonable con
Struction."
The chief justice next discussed the
reasons for the constitutional provi-
sions regarding direct taxation. he
states had p!enary powers OF taxation,
he said, but gave up the great sources
of revenue derived from commerce.
and retained the power Of levying
taxes and duties covering anything
other than excuses, but in respect 10
that the range of taxation was mar
rowed by the power granted TO the
federal government over Interstate