Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1895-04-12
FRIDAY MORNING. APRIL ~. 1895
THE INCOME TAX DECISION.

In the U. s. Supreme Court on Monday,
fhe case of Charles Pollock Us. the Farm
ers Loan and Trust Co., better known as
the income tax case, was decided. The
opfnion was delivered by Chief Justice
Fuller. 1t declares that so much of the
income tax law passed last August,
as attempts to impose tax upon the rent
or income from real estate is invalid.
The court is further OF opinion that the
act of August Is, 1894, is invalid so far as
it attempts to levy a tax upon the income
derived from municipal bonds. AS a mu-
nicipal corporation is the representative of
the State and one of the instrumentalities
of the State government, the property and
revenues of municipal corporations are not
the subjects of federal taxation, nor is the
income derived from State, county and
municipal securities, since taxation on the
interest therefrom operates on the power
to borrow before it is exercised and has a
sensible influence on the contract, and
therefore, such tax is on the power OF the
States and their instrumentalities to Dor
row money, and consequently repugnant to
the constitution.
Upon each of the other questions argued
at the bar, to-wit 1. Whether the void
provisions as to rent and income from real
estate invalidates the whole act? 2.
Whether as to the income from personal
property as such, the act is uncOnstitutiOn-
al as laying direct taxes? 8. Whether
any part of the tax, if not considered as a
direct tax, is invalid for want of unifor-
nifty on either of the grounds suggested p
the justices who heard the argument are
equally divided, and therefore, no opinion
is expressed.
The result is, that the decree of the Cir
cult court is reversed and the cause re-
manded with directions to enter decree
in favor of complainant in respect only of
the voluntary payment Of the tax on the
rents and income of it's real estate and that
which it holds in trust, and on the income
from the municipal bonds owned OF so held
by it.
The Washington correspondent OF the
Alexandria Gazette, to whom we are in
debted for the above summary of the
court IS decision, says that the Treasury
Department officials estimate that the de-
cision will reduce the amount which the
income tax bill was expected to contribute
to the revenue, about one half, leaving
$15,O00,000, all that can now be expected
The Department will change its form to
conform to the exceptions made by the
court-incomes from land, rent, State.
county and municipal bonds-and proceed
with the collection of the tax.
AS this decision eXempts from income
taxation one of the wealthiest classes in
the land-the investors in real estate, State,
city and county bonds-and makes liable
to income tax the more active classes who
really make the prosperity of the country.
it is more than likely that the whole in
come tax law will be swept off the statute
books by the next congress. And it may
come sooner, for Justice Jackson of Tenn,
who was absent from the bench by sick
ness, is said to hold the income tax uncon-
stitutional. AS the court stood four and
four Oh other points besides those decided,
it is certain that new cases will he made
up for the court with the almost certain
result that the law will he wiped out.