Connecticut western news., 1895-04-11
THE INCOME TAX.
DECISION OF THE SUPREME COURT
 AND ITS EFFECT.

ANU " S tffECls
 Most of the Law Stands, but the T.x o- Rents and Municipal Bonds Is Decided Co R. Unconstitutional and win Not Bs Lev. ied-A Tie on the Other Points.
 WASHINGTON, April 9-The anxiously awaited decision of the United States su- premc court in the Income tax was rcn. dercd today by Chief Justice Fuller. The court knocked out the law SO far as it taxed incomes derived from rcnts and also from state. county and municipal honda By tie vote of the court the law was sus- tained in other respects.
 The courts opinion wRs ss follows;
 In Charles Pollock versus tho Fnrmers' Loan and Trust Company ct al it Is es. tablished:
 First-That by the constitution federal taxation Is divided into two great classes -direct taxes and duties, imports and ex- oises.
 Second.-That tho imposition of direct taxes Is governed by the rule of apportion- ment among the several states according to numbers, and the imposition of duties, imports and cxoisos by the rule of uni- formity throughout the United States
 Third. That tho principle that taxation and representation 70 together was intend- cd to bc and was preserved in the oonsti- tuition by tho establishment of tho rule of apportionmont among the several states so that such npportionmont should be accord ing to numbers In oach stato. Fourth.-That the states surrundercd thoir power to levy imposts and % rcgu- lato commerce to the general government and pavo it tho concurrent power to levy | direct taxes in reliance on tho protection afforded by the rules prescribed, and that | the compromises of tho constitution can not be disturbed by legislative notion.
 Fifth-That these conclusions result from tho toxt of the constitution and arc supported by tho historical evidence fur nished by tho circumstances surrounding the framing and adoption of that inEtru- mcnt and tho views of those who framed | and adopted it.
 Sixth.-That tho understanding and er- pectatlon at the time of the adoption of the constitution were that direct taxes would not bc levied by the general govern mont except under the pressure of extraor. dinary exipcncy. and such has boon tho | practice down to Aug. ln, 1894 If the | power to do SO Is to be exercised as an or dinary and usual means of supply. that fact furnishes an additional roason for cir. cumspection in disposlng of the present case
 Real Estate and Rent.
 Seventh. That taxes on rcal estate be- long 10 the class of direct taxes and that the taxes on the rent or income of rual estate, which is the incident of it's ownc- rship. belong to tho same olasA
 Eighth. That by no previous decision of this court hns this question been ndJudi. oatcd to the contrary of the conclusions now announced.
 Nineth. That SO much of the net of Aug 10. 1894, as attempts to impose a tar upon tho rent or income of rcal estate without apportionmont is Invalid,
 The court is further of opinion that the act of Aug. lb. 1894, is invalid so far ns 10 attempts to levy n tax upon tho Income do- rived from municipal bonds. As a munio- ipal corporation is tho representative of tho stato and one of tho instrumontalitioa of the state government tho property and revenue of municipal corporations arc not the subjects of federal taxation. nor is inc income derived from state county and municipal securitics sinoo taxation on tho interest thu rofrom operates on the power to borrow before it Is exercised and has sensible innuencQ. on the contract and therefore such n tax Is tax on the power of tho states and their rinstrumentAlitica to borrow money, and consequently ropug- nnnt to tho constitution.
 Upon each of tho othor questions argued at the bar to wit
 First.-whether the void provisions as to rents and incomes from real estate in- validatos tho whole act
 Second. Whether as to tho Income from personal property as such the act Is un- constitutional ns laying direct taxea
 Third. Whether any part of tho tar, If | nf taW IA for want of uniformity on oither of tho grounds suprostcd3 The justices who hoard the argument arc equally divided. and therefore no opinion Is expressed.
 Tho result is that tho decroo of the cir cult court is reversed and the onusc TO- mandcd. with directions to cntor decree in favor of complainant In respect only of the voluntary payment of tho tax on the rent and income of it's rcal estate and that which it holds in trust and on the income from the municipal bonds owned or 90 hold by 1t
 Treasury onsclsis Dispirised.
 Tho treasury officials arc groatly dis. piritod over tho supreme courts decision In the income tax case, and while admit ting that they have no reliable data upon which to form an accurate estimate they express tho belief that tho net result of tho decision will be loss of at lcast 90 per cent in the receipts from inoomes
 Attorney General olncy was much sur prised at that part of tho decision which exompts ronts under tho Income tax. As to the section of tho act rotating to bonds the attorney general rather expected an adverse decision but he regards the 60. ton of tho court on the ront proposition as having been taken on tcchnioalities which he believes will not stand the tcst of timo and cannot cmain the porma. nont law of tho land. On all other points the government, he believes, has no ss- rlous cause for complaint
 It is universally regretted that thcro wac not full bench to hear the case. and, should Justice Jackson resign. his sue oossor. thero is good roason to bolievo would almost certainly be favorable to the law, in which event another test case very soon would be brought to the oourt for determination.