The Wilmington daily Republican., 1895-03-08
INCOME TAX OPPONENTS
Arguing Against. the Law Before
the Supreme Court.
INEQUALITY OF ITS PROVISIONS

Unconstitutional Because 1t Is Glass Leg
isiation, Affecting Less Than Two Per
Cent of Our Citizens.
WASHINGTON, March s.-The supreme
court did pot reach the income tax cases
until 8 o'clock yesterday, when w. ID.
Guthrie was recognized to open the case
for the appellants. He appeared especially
for Messrs Pollock and Hyde, who appeal
the cases against the Farmers Conti-
mental Trust companies, of New York,
from the decision of the United States
court of appeals for the southern district
of New York.
Mr.. Guthrie devoted himself to an out
line Of the argument proposed to be made
by the counsel for the appellants, and had
not concluded when the court at O'Clock
adjourned for the day.
He stated that they would depend prin.
cipally upon showing that the present in
come tax law is unconstitutional because
of its want of uniformity, and quoted at
length from the provisions of the law to
show that the tax is not uniform, contend
ing that congress had no right under the
constitution to levy q tax, duty, excise OF
impost which was variable or lacking in
uniformity as to individuals or corpora
tions, because 1t was the fundamental rule
that burdens in these respects should be
equally upon all alike.
Mr. Guthrie said the two cases against
the trust companies were very similar, but
that he would devote himself principally
to the Pollock case. He said Mr.. Pollock
was q shareholder in this company, the
net incomes or profit of which during the
past year subject to the income tax ex-
cceds 5000, 900. of which So, ,0o0 represents
rents of real estate and about $4,000 in.
aatn N attnirinnI hnn1E which lat
ter investment could not, he claimed, be
taxed under former decision of the su-
prcme court.
Mr. Guthrie asserted that the provision
OF the law eXempting all incomes under
q, 900 would cause it to fall upon less than
9 per cent of the population of the United
States, and the law was therefore class
legislation. He also showed that the tax
was not uniform as regards corporations,
of which n favored class were exempted,
as for instance, mutual insurance COM
panies and building associations, as well
as partnerships and religious aud benevo-
lent institutions.
As to the exemption of churches and
benevolent concerns counsel would have
nothing to say. as there WAS enough in the
other exemptions in cases where the ex-
emptions were in the interest of share
holders, though called by another namc,
to afford sufficient text for all they could
say.
As illustrative of the effect of the opera
tion of the law he pointed out that an in
divldual owning real estate bringing an
income of T., ODD would pay $50 tax, while
a corporation would be required to pay
double that amount He also instanced
the case of partnership of five persons
doing n business amounting to SEQ 900
year which would be required to pay no
tax, while n corporation composed of the
same persons would be compelled to pay
800, In II word, he said the application
of the law would vary according to owner
ship.
The corporation was only an aggregation
of individuals. and in most corporations
part at least of the stock was owned by the
middle classes Referring to the exemp-
tion made in the interest of mutual insur-
ance companies he asserted that in the
United States there were 800 such com
panies and that of these 1900 were doing
business on the mutual plan, and he said
that in New York alone the wording of the
act cxempting such companies would re-
lieve thousand million dollars worth Of
| property from its operation. The Leading
mutual insurance companies would secure
the benefit Of an exemption on its income
amounting to $2100OJ per year, while its
rival, organized on the stock plan, would
have to pay it's income tax, This advan-
tago was given in the law, he asserted,
simply because some one wanted to favor
some particular mutual company
Mr.. Guthrie also dwelt upon the exemp.
tion ON the interest of the building and
loan associations which were relieved of
the annual payments OF $500 000, and whose
assets, it had been asserted, were greater
than the combination of capital of all the
national banks. All that men have to do
to evade the operations of the law would bo
to organize building and loan associations.
The present arrangement is for Mr.. Sc.
ward to follow Mr. Guthrie in behalf of
the appellants and for Assistant Attorney
| General Whitney to speak next for tho
| government, to be followed by ex-senator
Edmunds, who will represent Mr.. Moore
in his suit for an injunction against Com
missioner of Internal Revenue Miller.
MIR. j. c. Carter will follow for the trust
companies, and Joseph NJ. Choate will
close for Pollock and Hyde; but this order
of procedure may be changed.