The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-04-10

These companies were saxed under pre-
yious income tax laws They do bust
ness somewhat different from other com
panies. but they conduct strictly rri-
yats business, In which the public has
no interest and have been often held rot
10 be benevolent or charitable organiza-
tons The sole condition for exempting
them under the present law Is declared
70 be that they make loans TO or divide
their profits among their members or
policyholders Every corporation is car
ried on. howevr. for the benefit of its
members. whether stockholders. deposit
tors or poiicyholders- II II Is carried on
for the benefit OF its stockholders every
dollar OF income IS taxed. il IL Is carried
on for the benefit OF its poiicyholders or
depositors. who are but another class Of
shareholders. il is wholly exemo-ed.
AS 20 building and loan associations:
The property OF those institutions is sx-
emp.ed from taxation to the extent of
millions They are IN no sense henevo-
lent or charita bic Institutions and con-
Quoted solely for the pecuniary profit of
their members. Their assets exceed the
capital stock OF the national banks of
the country. The aggregate amount of
saving TO those associations by reason of
their exemption Is over $4,000 year.
The inherent limitation upon the tax
ing power forhids the imposition OF taxes
which are unequal In their operation
upon similar kinds of property and
necessarily strikes down the gross and
arbitrary distinction In the income tax
law as passed by congress. The law, as
We have seen, distinguishes in the taxa
tion between corporations by exempting
the property of some of them from taxa
ton and levying tax on the property
OF others when the corporal tons do not
materially differ from one another in the
character of their business, Trifiing diff
ferences In their mode of business, but
not in their results. are made the ground
and occasion of the greatest possible dif-
ference In the amount OF taxes levied
upon them. showing that the action of
the legislative power upon them has
been arbitrary and capricious and some
times merely fancifnl
There was another position taken in
the argument of this case which is not
the least surprising 10 him of any ad-
yanced by the upholfers of the law. and
that is. that IL this court shall declare
that the exemptions and exceptions from
taxation extended to the various corpor-
ations of fire, life and marine insurance
companies and to mutual savings banks.
building and loan associations. violate the
requirement of uniformity therefore the
tax as TO such corporations must be en-
forced. and the law will stand as though
The abrogation or repeal of the uncon-
stitutiona or Illegal provision does not
create and give force 10 any enactment
or part of an enactment which congress
has not sanctioned or promulgated. The
law of 1884 says there shall be assessed,
levied and collected. except as herein
otherwise provided per eentum of the
amount II the exceptions are stricken
out there is nothing to be assessed and
collected except what congress has CHER
wise affirmatvely ordered Nothing less
can have the force of law. This court
is Impotent TO pass any law on the sub
ject 1t has not the legislative power.
The law of congress is also invalid in
that Ii authorizes "A tax upon the sal
aries of the judges of the courts of the
United States. against the declaration OF
the constitution that their compensation
shall not be diminished during their con-
tinuance in office.
In conclusion Justice Field said: Here
l close my opinion. | could not say less
in view of questions of such gravity. that
go down to the very foundation of the
question. If the provisions of the consti-
tuition can be set aside by an act of con-
gress. where Is the course of usurpation
TO end?
THE present assault upon capital is
but the beginning. 1t win be the step
ping-stone to others larger and more
sweeping, until our political contests will
become a war of the poor against the
rich. a war constantly growing in inten-
sity and bitterness.
IF the court sanctions the power of
requirement of uniformity, therefore the
uniformity mandate of the constitution,
IL viii. as said by one who has been all
his life a student of our Institutions
mark the hour when the sure decadence
of our political government will commence.
II the purely arbitrary limit of $1,000 in
the present law can be sustained, none
having less than that amount of prop
erty being assessed or taxed for the sup
port of the government. the limitation of
future congresses may be fixed at much
larger sum, at five or ten or twenty thou
sand dollars, parties possessing ths'
amount alone being compelled TO bear
the burdens of our government, or the
Limitation may be designated al such an
amount as a board of walking delegates
may deem necessary. There is no safety
In allowing the limitation TO be adjusted
except in strict compliance with the man.
dates of the constitution. which requires
taxation to be uniform In operation. and
so far as practicable. I'm proportion TO
their property. equal upon aiI citizens
Unless the rule OF the constitution gov
erns. a majority may fix the limitation
at such a rate as will not include any
of their own number.
81 am of the opinion that the whole
law of 1894 should be declared void and
without binding force: that part which
relates 10 the tax on rents. profits and in
come from real estate, that is so much
as constitutes the direct tax. because not
imposed by the rule of apportionment ac-
Cording 10 the representation of the
states. as prescribed by the constitution.
and that part which imposes a tax upon
the bonds and securities Of the several
states and upon the bonds and securi-
ties OF their municipalities, as being be-
yond the power of congres 10 impose and
the law as far as IL imposes duties i'm
posts and exeises. as void In not provid-
ing for the uniformity required by the
contitution in such cases"