The record-union., 1895-04-25
THAT INCOME TAX OPINION.
The Full Text Made Public for the
First Time.
HOW THE SUPREME COURT REACHED
ITS CONCLUSIONS.
The Tax on Government Stock a Tax
on Contracts and the Credit Of the
United Stares-It is Therefore Re-
pugnane to the Federal Consritu-
ton, Say the Court.
Special to the REcoRD-ENrox.

WASHINGTON, April 24.-The text of
| the opinion OF Chief Justice Fuller in the
| income tax case, which was delivered on
! the Sth inst, was made public to-day.
The opinion is preceded by an elaborate
review of the history of the case. The
! opinion proper is introduced with the
! statement:
'The Constitution provides that repre-
/ sentative and direct taxes shall be appOF-
toned among the several States, accord
ing to numbers, and that no direct tax
| shall be laid except according to the emu
meration provided; also that all duties,
imports and excisos shall be uniform
throughout the United States"
The men, says the opinion, who framed
the Constitution had just emerged from
the struggle for independence. whose
rallying cry had been that taxation and
representation go together" The mother
country had taught the COlOnists that
seit-taXation constituted the main seCur-
lty against oppression. The States were
careful TO sea that taxation and represent
alton should go together so the sover-
eighty should not be impaired, and that
when Congress voted a tax upon property
II should do so with the consciousness
and under the responsi bility that in so
doing the tax so voted would proportion
ately fall upon the immediate constitu-
ents Of those who passed it.
More thans@sthis, by the Constitution,
the States not only leave to the Nation
the concurrent power TO tax persons and
property directly, but they surrendered
their. own power TO levy taxes on i'm
ports and to regulate commerce. SO
when the wealthler States are between
themselves and their less-favCred associ-
4 al i.-nG a. nd
those VINO were to come, gave up for the
common good, the great source OF rev.
euue derived through commerce, they
did SO IN reliance on the protection al
forded by restrictions on the grant of
power.
Thus in the matter of protection, the
Constitution recognizes the two great
classes OF direct and indirect taxes, and
lays down two rules by which their i'm
position must be governed, namely: The
rule OF appOrtiOnmenJ as 10 direct taxes,
and the rule of uniformity as to duties,
imD0sts and eNCises.
There have been from time to time init
nations, said the Chief Justice, that there
might be some tax which was not di-
rect tax, nor included under the words
duties, impOsts and excises," but such a
tax tor more than 100 years OF national
existence has remained undiscovered,
and now, for the stress OF particular
vestigatiOn into sources OF revenue.
by lar the greater part of the opinion
IS devoted to the consideration of the
question whether the tax on rents is q
direct tax WIthin the meaning Of the Con-
stitutiOn.
Ordinarily" said the Chief Justice, in
taking up this branch of the subject, ''alI
taxes paid primarily by persons who can
shit the burden on someone else, or VINO
are under no legal compulsion 10 pay
them, are considered Indirect taxes; but
taxes upon property holders III respect
to their estates, whether real or personal
or OF the incomes yielded by such es-
tates, and the payment OF which cannot
Oo avoided, are direct taxes. Neverthe-
less, II may be admitted that although
this definition OF taxes and direct taxes
is prima laCie correct and 10 be applied
| in the consideration of the question be-
fore us, yet tie Constitution may bear a
/ different meaning, and that such differ
ent meaning must be recognized; but in
arriving at any conclusion upon this
point we arc ct liberty to refer 10 the his
tOrlCai circumstances attending the franz
ing and adoption of the Constitution, and
the COuSeq uences naturally attendant
upon the one construction or the other
Hence the inquiry as TO which, at the
time the Constitution was framed and
adopted, were recognized as direct taxes"
Discussing the qualifications of the
members OF the convention, he said they
were men OF great sagacity, fully con-
yersdnt with governmental problems
deeply conscious of the nature Of their
task, aud profoundly convinced they
were laying the foundations OF vast
future empire
Various authorities are quoted at con-
siderable length to show the process by
which the compromise by which the con-
vention delegated TO Congress the power
to tax the various States was arrived at,
and the Chief Justice adds: The COM
promise, IN embracing the power OF di-
rect taxation, consisted not simply in in
cluding part of the slaves in the enumera-
ton of population, but providing that, as
between state and State, such tax should
be prOportioned to representation"
Many quotations are also made for the
purpose of demonstrating that the right
of the Federal Government to directly
assess and collect its own taxes, at least
until after acquisitions upon the States
had been made and failed, was one of the
chief points of conflict.
Discussing the Hilton case, so fire.
quentiy referred to in connection with
this case, in which the Supreme Court in
1874 decided that a tax on carriages was
not direct tax, the Chief Justice says
each OF the Justices, while suggesting
doubt whether anything but capltation
or u land tax was direct tax within the
meaning OF the Constitution, distinctly
avoided expressing All opinion upon that
question or laying down a comprehen-
slVe definition, but confined his opinion
to the case before the court.
The Acts Of July Ii, 1913, and August 5,
1861, are reviewed, after which the fol-
lowing propositions are laid down:
tlrSJ-Ihat the distinction between di-
rect and indirect taxation was well un-
derstood by the trainers of the Constitu-
ton and those who adopted it.
Second-ThaT under the State system of
taxation ali taxes on real estate or per-
sonal property, or the rents thereof were
regarded as direct taxes.
Third-Ihat the rules of apportionment
and OF uniformity were adopted in view
OF that distinction and those systems.
Fourth-That whether the taxes on car
riages, direct or indirect was disputed,
the tax was sustained as q tax on the use
and an excise.
Fifth-That the original expectation
was that the power OF the direct taxation
would be exercised only in extraordinary
eNlgencies, and down to August 10, 1884,
this expectation has been realized. The
Act OF that date was passed in a time
OF profound peace, and if we assume no
special eXigency called for unusual legis-
lation and that resort TO this mode of tax
ton Is to become an ordinary and usual
means of supply, that fact furnishes an
additional reason for circumspection and
care in dlsposiug of the case.
The opinion here reviews numerous
decisions under the Act OF 1861, including
the Springer case, which was largely re-
lied upon 10y counsel for the Government
IN the present cases TO sustain their con-
teation. Chief Justice Fuller, said: