River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1895-05-02
DIRECT rl.x.
Definition OF the Term by Chief Justice
Fuller.


WASHINGTON, April ;p.-The text of
the opinion of Chief ksnce Fuller in
the income tax case vi ich was deliv-
cred April was made public Wednes-
day The opinion is preceded by an
elaborate review of the his
tory of the case. The opinion
proper is introduced with the
statement that "the constitution pro-
vides that representatives and direct
taxes shall be apportidhed among the
several states according to numbers
and that no direct tdx shall be laid
except according to the enumeration
provided, and also that all duties. inn
posts and excuses shall be uniform
throughout the UnitedJSt States
Thus in the matter IF taxation the
constitution recognizes. the two great
classes of direct and indirect taxation,
and lays down two rules by which
their imposition must be governed,
namely, the rules of apportionment as
to direct taxes and tlSe rule of uni
formity as to duties, ,mposts and ex-
cises.
BY far the greater part of the opinion
is devoted to the consideration of the
question whether tax on rents is a
direct tax within the |neaning OF the
constitution.
The opinion here reviews numerous
decisions under the act of 1861, includ-
ing the Springer case, which was
largely relie' upon by counsel for the
government in the present case to sus'
tsin their contention. Chief Justice
Fuller says:
"It is conceded in all these cases, from that
of Hilton TO that of Springer, that taxes on
land are direct taxes and in none Of them
is IL determined that taxes on rents or income
! derived from land are not taxes on land"
Summing up, the cl,ief justice says,
among other things:
THE requirement OF the constitution ia that
no direct tax shall be laid otherwise than by APP
portlonment The prohibition is not against di-
rect taxes on land from which the implication
is sought to be drawn that indirect taxes on
land would be constltutional but 1t Is against al
direct taxes and IL is admitted that a tax on
real estate direct taxi Unless, therefore
tax upon rents or incomes issuing out
of lands is intrinscally so different from
tax on the land itself that 1t belongs
to IA wholly different class of taxes, such
taxes must be regarded as falling within
the same category as al tax on real estate
go nomine. The name OF the tax is unimpor-
tant The real question is, is there any basis
upon which to rest the contention that real es-
| tate belongs to one of the two great claSses oil
taxes and the rent. or ircome. which Is the
incident OF its ownership. belongs TO the other
We are unable to perceive any ground
for the alleged distinction. An annual taa
upon the annual value or annual use OF rea
estate appears to us the same in substance as
an annual tax on real estate, which would be
paid out OF the rent or income. This law take
the income received from land and the growth
or produce OF the land
Nothing can be clearer than that what the
constitution Intended to guard against was the
exercise by the general government OF the
power of directly taxing persons ana property
within any state through majority made VI
from the other states.
I'VE are OF opinion that the law in question
so far as it levies tax or the rents or income
Of real estate IS in violation OF the constitu
tion and is invalid"
Comparatively brief space is devoted
to the question of a tax on the income
derived from municipal bonds. The
opinion says.
The tax on government stock is thought by
this court to be a tax onthe contract, tax OF
the power to borrow money on the credit o.
the United States, and consequently to be re-
pugnant to the constitution.
Applying this language to these municipal
securities, 1t is obvious that taxation on th'
interest therefrom would operate on the powe
to borrow before It Is exercised and woulC
have a sensible influence on the contract, anC
that the tax in question is q tax on the power
of the states and their instrumentalittes I,
borrow money, and consequently repugnant Z
the constitution.