The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-05-08

conclusion is one of which | am unable TO
feel the force or appreciate the justice, and,
as the question is of immense importance
to the Government politically and pecunl-
arily, 1 shall consume a few moments IN
respectfully urging its reconsideration.
at IS important to bear in mind the pre-
else question. 1t is not whether there may
not be tax on rents which must not be
deemed to be a tax on the land producing
them. It is not whether land tax meas
ured by rents or rented value may not be
the most efficient and most scientific
method of taxing land. The question is,
Does this income tax law create a tax
which is necessarily to be deemed a tax
on real estate?
For answer the best source of informa-
| ton is, of course, the statute itself. The
most superficial examination shows that
no real-estate tax as such is intended by
| Congress. If it had been there would
have been a provision for the appraise-
ment, by rental value or otherwise, of
vacant and unproductiYe land. If it had
been there would have been provision for
the appraisement by rental value or other
wise, of houses and grounds which are oc-
cupied as homesteads and for purposes of
private enjoyment and pleasure.
1.-The owner of vacant unproductive
lands held for investment and speculation
whether they be city lots or thousands of
unimp roved acres pays nothing under this
law on account of such lands. The mil
lionaire, with half-million dollar mansion
in the city and an equally costly residence
by the seaside, pays nothing under this
law. The manufacturer or the railroad
corporation, the very basis of whose bust
ness is the interest in real estate occupied
and used therefor, pays nothing under this
law on account of such real estate. 1t is
impossible to contend. therefore, that this
law contemplates real estate as such as
the subject of the tax imposed by it. If
there could be possible doubt on that
point it is excluded by the enumeration Of
the subjects for the tax contained in sec
ton %. Each and every one is personal
property and so carefully is the distinction
observed that when the clause imposing
the succession tax is reached it is ex-
pressly limited to money and the value of
all personal property acquired by gift or
Inheritance
"Such being the unmistakable purpose
of the law, is it true that Congress has
stultified itself? Is it true that it has
managed to do the very thing that it meant
to avoid dOingP That is supposed to be
the result because a taxpayers rents are
placed among the constituents of his tax
able income. But the intent Of Congress
is to be recognized and effectuated, if pos
sible, and its inclusion of rents in taxable
income is not to be suffered to defeat that
1v,fa 10 70 ~ tot
| will prevent it. Can such view be taken?
1 respectfully submit not only that it can
be- but that it should-that it is the only
reasonable and best way. The opinion of
the court deals with the case as if rents
were the only subject of the income tax
law. That is not, I submit the true way
| of looking at the matter. But suppose it
! be adopted, what folIowsP
| eve then have a statute dealing with
| the landlords as class. taxing them be-
| cause of their vocation of landlord and
measuring the tax by rents actually re-
ceived. The statute, however, cannot
properly be looked at in that way. 1t is
not statute imposing tax upon a par
ticular class of persons, namely, land
lords, in respect to a particular source of
income, namely, rents. It is statute
special exemptions being not now consid-
credit is statute taxing all persons hav-
ing incomes in respect of all sources of in
comes.
"rhe taxpayer pays this year according
to his money-spending ability of last year,
! and it is entirely conceivable that a man
who this year does not earn a cent and is
without cents worth of property real or
! personal, may nevertheless be assessed on
| hundreds of thousands of dollars of in
come actually received by him last year.
Yet this is the sort of tax which is called a
tax on real estate for no other reason than
that last years rents form part of the yard
stick by which this years mopey-spending
capacity is measured.
IF the distinction between personally
and realty in the matter of taxation is
made by the constitution itself-and that
| it is a necessary assumption of the argu-
ment-where does this court get the au-
| thority to set it aside as matter of form
| No such authority exists.
ut may be tax upon personally in the
| shape OF rents as it is the same thing to the
landlord pecuniarily as a tax upon the
| land itself But landlords are not the
only parties concerned. The whole people
are interested, since to them it is of the first
Importance that the constitution should
be respected in its entirety and that no
| branch of the Government should under
! take to deal with any part of it as mere
matter of form. 1t is intimated that, log
ically speaking, if tax on real estate is
direct tax so is tax on personal prop
erty, and that if a tax on rents is tax on
real estate so is tax on interest and divi-
dends a tax on the capital producing them.
ain 1876 the fathers of the Republic
said: Here is a constitution of govern
ment, not metaphysical treatise. 1t de-
clares certain taxes must be apportioned
The tax before US is not in its nature ap-
portionable without violating every prin-
ciple of taxation, therefore it is not tax
which is required to be apportioned
eff this rule of 1895 were now to be fol-
! lowed the cases now at the bar would pre-
sent no difficulties. In lieu of it, however
and the fragrant inequality of the working
of the new doctrine being fully admitted,
what we are presented with is the sugges-
| ton that it is not for current everyday
use, but is to be applied only in extra
| ordinary emergencies. What is the value