Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-04-09
THE LAWS STATUS
Effect Of the Supreme Courts De-
cision on Income Tax Collections.
VIEW OF TIE ATTORNEY GENERAL
Opinions Expressed by Lawyers oi
Ability and Distinction.
IN THE POLITICAL ARENA

$50 far as the lower courts are concern
ed" said Attorney General Olney to Star
reporter this morning, 1.-The division of the
Supreme Court upon the income tax law Is
as binding as If the whole court had been
unanimous in its favor. 1 cannot believe
that any judge would grant an injunction
to prevent a collector from collecting the
tax on incomes derived from other sources
than rents or state and municipal bonds
in the face of the Supreme Courts action.
The only way I can see by which persons
who object to paying the tax can secure
judicial action is by their paying the tax
under protest and entering suit for its re-
covery."
A Mistake as to His Views.
The Star reporter mentioned the fact
that Mr.. Olney, in his oral argument before
the Supreme Court on the income tax cases,
had indicated the possible declaration by
that body that the taxing of incomes de-
rived from rents and state and municipal
bonds was unconstitutional
1T is a mistake to state that included
the incomes derived from rents" said Mr..
Olney. II did not believe the law would
hold regarding the taxing of state and mu-
nicipal bonds, and am glad the decision was
against it in that regard. but did not say
anything Of the sort about rents. Here is
what had to say on that subject"
The Attorney General handed the reporter
a printed copy of his argument, with the
following paragraph marked:
What He Did Say.
"In this connection, therefore, there is
but one suggestion 1 desire to very briefly
notice. A part of the income taxable un-
der the law is rents of land, and a tax up
on rents is claimed to be a tax upon the
land, and SO to be direct tax within the
meaning of the Constitution. But the sug-
gestion is by no means novel, and certainly
is not to be accepted as sound. There is a
practical commercial sense in which tax
upon rents Is always a tax upon land. 1t
affects the value of land; land the income
from which Is subject to a tax, must sell
for less in the market than land the in
come of which is not so subject. But, ex-
cept 1E that view, tax upon rents is not
necessarily tax upon land. but may be a
tax upon a wholly distinct subject matter.
Instead of being upon realty it may be up
on so much personally wholly dissociated
from the land. 1t is. of course, competent
for the government to tax upon either plan
to tax rents under scheme of taxation
of personally as personal property, to
tax them under scheme of taxation as
realty and as representing and measuring
the value of real estate. The only question
is of the intent-an intent to be looked for
and found OF ly in the statute imposing the
tax. That test being applied, what is the
purpose of Congress in the present income
tax law? Is it to tax land-rents being
used as ready mode of valuation-or is it
to tax rents as SO much personal property
irrespective of its origin?
No Lnnd Tax Aimed At.
"It is difficult to see how that question
can be answered except in one way. No
land tax Is aimed at or attempted by the
statute-there is no lien on land for it's
payment-and the whole scope and tenor of
the statute show the subject of the con-
templated tax to be personal property and
nothing else. 1t Is well nigh conclusive on
this point that there is no provision for the
valuation and taxation of unproductive
land-a provision that would almost GER
tainly have been found if the object had
been to make real estate tax. 1t may be
suggested, however, that 1t may be the pur-
pose to tax land, but only such land
yields rent. But there is no sign or symp-
tom Of such an intent in any specific pro-
vision of the statute, while its general pro-
visions, as already observed, contemplate
nothing but tax on personal estate. 1t
may also be suggested that If a tax reaches
rents in point of fact, it is a tax upon land
no matter what the intent of the taxing
statute may be. But that position is Who'll
ly untenable, because rents in the pocket
of the owner are not intrinsicaly and of
themselves land. They are money, like any
other. If for the purpose of a tax they are
nave any al ClldTdClSF DIS llle rep
resentative Of land, it is a character i'm
pressed upon them from some source and
can come from no other source than the
taxing statute itself. 1 submit, therefore.
with great confidence, that while a tax
upon rents may under some circumstances
be held to be in truth and in fact tax
upon land, it cannot be held to be such un-
der a statute like the present which taxes
rents without regard to land and merely
as one of the constituents of income.
"You will see from that that, so far as
rents are concerned 1 have been mis-
quoted" said Mr.. Olney.
Il do not think the law will stand as the
law of the land" he said. in concluding the
interview. 1t is too technical"
MIR. Enoch TOtten's Opinion.
Mr.. Enoch Totten, when requested to
define the exact present status of the
income tax law, stated that, with the eX-
ception of the paragraphs providing for
the taxing of incomes derived from real
estate rentals and state and municipal
bonds, the law stood precisely as it did
before the Supreme Court rendered its de-
cision. The judges sitting at the hearing
of the case were equally divided. There
was nothing, he thought, to prevent the
bringing of suits for injunc tions by per-
sons who believed the law, as a whole to
be unjust against the collections proposed
to be made under 1t.
Judge Jerc Wilson's Views.
Mr.. jeremiah NJ. Wilson, who was Ole
of the counsel for Moore and Schley in
their suit to restrain the collection of the
income tax, was seen this morning by a
Star reporter and requested to give his
views on the income tax decision. He ex-
cused himself from going into details, be-
cause he had not gone thoroughly into the
subject, but in response to a question
whether the action Of the Supreme Court
would have the effect of preventing per-
sons from seeking injunctions to prevent
internal revenue collectors from demanding
tax upon incomes derived from other
sources than rents or state or municipal
bonds, replied that it would not.
There is an equally divided bench upon
the question of the constitutionality of
the rest of the law" said MIR. Wilson, land
therefore it remains virtually undecided.
Suits may, therefore, be brought and taken
up to the Supreme Court, where, With a
full bench of nine justices, 4 final decision
may be reached. Under the present condi-
tions there is nothing to prevent persons
who believe the law is unjust to have re-
course to the courts and seek to have col
lections of the tax enjoned."
What Robert Christy Says.
"'The cold neutrality of the impartial