The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-04-25
Propositions Laid Down.

Propositions Laid Down.
The acts of July IA, 1913, and of Aug
ust 8, 1861, are reviewed, after which
the following propositions are laid
down:
"First-That the distinction between
direct and indirect taxtiaon was well
understood by the trainers Of the
constitution and those who adopted it
'Second-That under the state SyS-
TENS Of taxation all taxes on real es-
tate or personal property, or the rents
or incomes thereof, were regarded as
direct taxes.
"Third-4TlIat the rules of apportion,
ment and of uniformity were adopted
tn view Of that distinction and those
systems.
.Fourth-That whether the tax on
carriages was direct or indirect was
disputed, but the tax was sustained
as tax on the use and an excise.
''Fifth-That the original expectation
was that the Iower of direct taxation
would be exercised only in extra
ordinary exigencies, and down TO
august 10. 1894, this expectation mas
been realized. The act of that GATE
was passed in a time of profouno
peace, and If we assume no speclai
ex.gency called for unusual legislation
and that resort to this mode OF taxa
ton is to become an ordinary ana
usual means of supply that TACT fur-
njsheC an additional reason, FOR cir
cunspection and care in disposing OF
the case"
peciSions Reviewed.
The opinion here reviews numerous
decisions under the act OF 1861, lncluo-
ng the Springer case. which was
largely relied upon by counsel for the
government in the present cases 10 sus-
ain their contention. Chief Justice
&c
these cases, from that Of Hilton TO
;hat of Springer, that taxes on land are
direct taxes, and in none or them Is II
determined that taxes on rents or IN
come derived from land are not taxes
on land"
Summing up, the chief justice says
among other things: 1.-THE require
ment of the constitution is that no
direct tax shall be laid otherwise than
by epportiQnIa ent-the prohibition is
not against direct taxes on land, from
which the implication is sought to be
drawn that indirect taxes on land
would be constitutional, but it is
against all direct taxes-and it is ad-
-n.tted a tax on real estate is a direct
tax. Unless, therefore, a tax upon
rents or income issuing out Of lands is
intriEsically so different from a tax on
the land itself that it belongs to a
wholly different class of taxes. such
taxes must be regarded as falling
within the same category us tax on
real estate go nonine. The name Of
the tax is UnimPortant. The real ques-
ton is, is there any basis upon which to
rest the contention that real estate be-
longs to one of the two great classes
of taxes and the rent or income, which
Il the incident of its ownership, be-
longs to the other? We are unable to
perceive any ground for the alleged
distinction. An annual tax upon the
annual value or annual uses Of real
estate appears to US the same in SUBJ
stance as an annual tax on real estate,
which would be paid out of the rent or
income. This law taxes the income
received from land, and the growth or
produce of the land. cir. Justice Pat
terson observed in Hilton's case:
Land. independently of its products,
Is of no value and certainly had no
thought that direct taxes were confined
10 unproductive land.
Form and Substance.
of st be true that by varying the
form the substance may be changed, it
is not easy to see that anything would
remain Of the limitations of the con-
stitution or of the rule of taxation and
representation so carefully recognized
and guarded in favor of the citizens
Of each state. But constitutional pro-
visions cannot be thus evaded. It is
LnS SuOSld1lCe anu IOI Tile 10TH WHICH
controls, as has indeed been established
by repeated decisions Of this court"
''It is not doubted that property
owners ought to contribute In just
measure to the expense of the govern
Inent. AS to the states and their NUM-
cipelities this is reached largely
through the imposition of direct taxes.
As to the federal government, Il is at
tanned in part through exercises and
indirect taxes upon luxuri IS and con-
sumption, generally TO which direct
taxes may be added to the extent the
rule Of apportionment allows. And,
through one mode or the other, the en-
tire wealth of the country. real and
personal. may be made. as it should be,
to contribute to the common defense
and general welfare. But the accept
ance of the rule OF apportionment was
one of the compromises which made
the adoption of the constitution posi-
BILE, and secured the creation of that
dual form of government so elastic and
so strong. which has thus far survived
in unabated vigor. If by calling a tax
indirect when It is essentially direct
the rule of protection could be frittered
away. one of the great landmarks de-
ining the boundary between the nation
and the states of which it is composed
would have disappeared and with it
one of the bulwarks of private rights
and private property.
e are OIL IQ6 opinion the law QuSS-
ton, so far as 1t 1evieS a tax on the
rents or income Of real estate. is in
violation of the constitution and is
Invalid
Comparatively brief space is devoted
20 the question of a tax on the income
derived from municipal bonds.
Municipal Bonds.
1.-The constitution" says the opinion.
"contemplates the independent exer-
else by the nation and by the states
severally. Of our constitutional powers,
As the states cannot tax. the powers,
the operations or the property of the
United States nor the means which
they employ to carry their powers into
execution. so it has been held the
United States have no power under the
constitution to tax either the instru-
nlentalities or the property of q state.
a municipal corporation is the repre-
sentative of the state. and one of the
fnStrumentalities of the state govern
ment. 1t was long ago determined that
property and revenues of municipal
corporations are not subjects Of fed
eral taxation"
After reference to the decision, the
opinion proceeds. concluding as follows:
1.-THE law under consideration provides,
that nothing herein contained shall ap-
ply TO states. counties or municipali-
ties 1t is commended that. although the
property or revenues of the states or
their instrumentalities cannot be taxed;
nevertheless. the income derived from
state. county and municipal securities
can be taxed. But we think the same
want of power to tax the property or
revenues Of the states or their instru-