The National tribune., 1895-05-23
INCOME TAX VOID.
United States Supreme Court Majority
Decides Against II.

The income tax law has been declared nm
constitutional and void by majority of the
United States Supreme Court the vote stand
ing five to four. Justices Harlan, Brown,
Jack son. and White weYesthe dissenters.
Chief Justice Fuller delivered the opinion
of the Court. In brief no said:
The Constitution divided Federal taxation
into two great classes, the class of direct taxes
and the class of duties imposts and excuses, and
prescribed two rules which qualified the grant
of power as to each class. The power TO lay
direct taxes, apportioned among the several
States in proportion to their representation in
the popular branch of Congress, representa-
ton based on population as ascertained by the
census, was plenary and absolute; but to lay
direct taxes without apportonment was for
hidden. The power to lay duties, imposts and
excuses was subject to the qualification that the
imposition must be uniform throughout the
United States.
Our previous decision was confined to the
consideration of the validity OF the tax on the
income from real estate, and on the income from
municipal bonds. The question thus limited
was whether such taxation was direct or not,
in the meaning of the Constitution, and the
court went no farther as to the tax on the in
comes from real estate than to hold that it fell
within tho same class as the source whence the
income was derived-that is that tax upon
the realty and tax upon the receipts there
from were alike direct, while to the income
from municipal bonds, that could not be taxed
because of want of power to tax'the source, and
no reference was made to the nature of the tax
as being direct or indirect.
We are now permitted to broaden the field
of inquiry, and determine to which of the two
great classes tax upon a PERSONS entire in
come, whether derived from rents.or products,
otherwise of real estate, from bonds,
stocks, or other forms Of personal property, be-
longs; and we are unable to conclude that the
enforced subtraction from the yield OF all the
owners real or personal property in the man
ner prescribed. is so different from a tax upon
the property itself, that it is not direct, but
an indirect tax in the meaning of the Constitu-
tion."
The opinion next took up the argument that
a tax Oh property is not direct tax within the
meaning of the Constitution, and OH this point
says:
1.-The Constitution prohibits any direct tax.
unless in proportion to numbers, as ascertained
by the census; and, in the light of the circum-
stances to which we have referred, is it not an
evasion of that prohibition to hold that gen.
eral unapp0rtoned tax imposed upon all prop
erty owners as body for, or in respect of their
property is not direct, in the meaning Of the
Constitution, because confined to the income
therefrom?
Nor can we perceive any ground why the
odbt IettsubIHs bOco nOe apply W Iu per
sonalty held for the purpose Of income or ordi-
narily- yielding income, and to the income
therefrom.
The power to tax real and personal property
and the income from both, through apportion-
ment. is conceded that such tax is direct
tax in the meaning of the Constitution has not
been and, in our Judgment, cannot be success
fully denied, and yet We are thus invited to
hesitate in the enforcement Of the mandate of
the Constitution. which prohibits Congress from
laying direct tax on the revenue from prop
erty Of the citizen withoutregard to State lines,
and in such manner 'dat tho State cannot iu-
tervene by payment regulation of their own
resources, lest a government OF delegated powers
should he found to be- not less powerful, but
less absolute, than the imagination of the adyo-
cate had supposed"
Justice Harlan delivered the principal dis
senting opinion. In part he said "In my
jUdgment-t0 say nothing of the disregard Of
the former adjudications Of this court and of
the practice of the Government for a century
this decision may well excite the gravest APP 4
prehensions. 1t strikes at the very founda-
tions OF National authority in that it denies 4
to the General Government power which is
or may become vital to the existence and pres
ervation of the Union.
when this Court adjudges, as it does now
adiudge, that Congress cannot impose duty
or tax upon income arising from rents of real
estate, or upon invested personal property
or upon income arising from invested per-
sonal property. bonds, stocks Investments of
all kinds except by apportioning the sum to
be raised among tho States according to popu-
lation. it practically decides that without an
amendment to the Constitution such incomes
can never be made to contribute to the support
of the National Government.
Under the operation of the decision just rem
dered, Congress cannot, for purposes of reve-
nue., impose general tax even upon the valu-
able dogs aud valuable race horses of the coun-
try, as property, unless it apportions such tax
among the States, according to population; but
it may, without such apportiOnment, and di-
rectly, under the rule of uniformity, reach in
dividuRl workmen, artisans, men Of business,
authors, lawyers, physicians and ministers.
owning no invested personal property, and
make each one, in respect Of his own earnings,
and in whatever State he may reside, pay this
tax according TO the amount OF his earnings.
=" The Judgment just rendered defeats the pur-
pose OF Congress by taking out Of the revenue
not less than $4,000, 600, and possibly $50, OO0-
900. expected to lie raised from incomes
Such a result is one to be deeply deplored 1t
cannot be regarded otherwise than rs disaster
to the country. The practical, if not direct,
effect Of the decision is to give to certain kinds
Of property a position of favoritism and ad.
vantage that is inconsistent with the fuuda-
mental principles of our social organization"