The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-04-25
He Holds thnt a Tax on Rents 1. a
Direct Tax within the Meaning
of the Constellation.
IT Is THEREFORE, INVALID
SO ALSO IS THE ON STATE AND
MUNICIPAL SECURITIES,
For the Reason that 1t As a Tax on the
Power of the states, Eis., to borrow
Money-Justice Jackson's Health.

the Sth inst, was made public to-day. The
opinion is preceded by an elaborate review
of the history of the case. The opinion
proper is introduced with the statement
that the Constitution provides that rep
resentative and direct taxes shall be pro-
portioned among the several States accord
ing to numbers, and that no direct tax shall
be laid, except according to the enumeration
provided; and, also, that all duties, imposts
and excuses shall be uniform throughout
the United States The men, says the opin-
ion, who framed the Constitution, had just
emerged from the struggle for independ-
ence, whose rallying cry had been that
taxation and representation go together"
The mother country had taught the colo
nists that self-taxation constituted the main
security against oppression. The States
were careful to see that taxation and rep
resentation should go together, SO that the
sovereignty reserve should not be impaired,
and that when Congress voted a tax on
property it should do SO with the conscious
ness and under the responsibility that in
SO doing the tax so voted would proper
tionately fall on the immediate constitu-
entS of those who imposed it. More than
this, by the Constitution the States not
only gave the Nation the concurrent power
to tax persons and property directly, but
they surrendered their own power to levy
taxes on imports and to regulate commerce.
So. when the weather. States, as between
themselves and their less favored associates,
and all as between themselves and those
who were to come, gave UP for the common
good the great source of revenue derived
through ommerce they did so in reliance of
the protection afforded by restrictions on
the grant Of power. Thus, in the matter
of taxation. the Constitution recognizes the
two great classes of direct and indirect
taxes, and lays down two rules by which
their imposition must be governed. namely:
The rule of apportionment as to direct taxes
and the rule of uniformity as to duties, i'm
posts and excuses, There have been from
time to time intknations.'' said the Chief
Justice J,h, ! that at there n r;ra might be nor some ,ne,,,d tax
under the words duties. .inposts and ex-
cises.' but such g tax for more than one
remained undiscovered, notwithstanding the
stress of particular circumstances has in
vented thorough Investigation into sources
of revenue"
THE TAX ON RENTS.
BY far the greater part of the opinion
is devoted to consideration of the ques-
tion whether a tax on rents is a direct tax
within the meaning of the Constitution.
Ordinarily" says the Chief Justice, Tin
taking up. this branch of the subject, all
taxes paid primarily by persons who can
shift the burden on some one else. or who
are under no legal compulsion to pay them,
are considered indirect taxes; but a tax on
property holderssin respect of their estates,
whether real or personal. or of the in
come yield by such estates, and the pay
ment of which cannot be avoided, are d.
rect taxes. Nevertheless, ii may be adj
mitted that although this definition of di-
rect taxes IS prima facie correct and to be
applied in the consideration of the question
before us, yet the Constitution may bear a
n iffnranf rnnof.ffx - al fhofE cr1nH sfparaD
meaning must be recognized. But, in arriv-
ing at the conclusion on this subject, We
circumstances ATTENDING the framing and
adoption of the Constitution as well as the
entire frame and scheme of the instru-
ment and the consequence naturally at
tendant upon the one construction or the
other Hence the inquiry. what, at the
time the Constitution was framed and
adopted, were recognized as direct taxes"
Discussing the qualifications of the men,
bers of the convention. the Chief Justice
said they were men of great sagacity, fully
conversant with government problems,
deeply conscious Of the nature of their
were laying the foundation of a vast future
empire. Various authorities are quoted at
by which the compromise by which the
convention delegated to Congress the
power to tax the various States was ar
rived at and the Chief Justice adds: The
compromise, in embracing the power of di-
rect taxation, consisted not simply in in
Guiding part of the slaves in the enumera-
ton of population, but in providing that as
between State and STATE such taxation
should be proportioned to representation
Many quotations are also made for the
purpose of demonstrating that the right OF
the federal government to directly assess
and collect its own taxes, at least until
after acquisitions on the States had been
made and failed, was one of the chief
Discussing the Hilton case, so frequently
referred to in connection with this case,
in which the Supreme Court in 1874 decided
that a tax on carriages was not a direct
tax, the CHIEF Justice says that each of
the justices, while suggesting doubt whether
anything but a capitation or a land tax
was a direct tax WITHIN the meaning of the
Constitution, distinctly avoided expressing
an opinion on that question or laying down
a comprehensive definition, but confined his
opinion to the case before the court.
DIRECT AND INDIRECT TAXATION.
The acts of July IA. 1s4s. and of Aug. 5,
1861, are reviewed, after wnIcn the follow
ing propositions are laid down:
~"First-That the distinction between di-
rect and indirect taxation was well under
stood by the trainers of the Constitution
and those who adopted 1T.
"Second-That under the State system of
taxation taxes on real estate or personal
property. or the rents or income thereof.
were regarded as direct taxes.
..Third-That the rules OF apportionment
and of uniformity were adopted in view of
that distinction and those systems
riages was direct or indirect was disputed,
but the tax was sustained.
~"Fifth-That the original expectation YVES
that the power of direct taxation would
be exercised only in extraordinary exigen-
cies, and, down to Aug. 10, 1884, this ex-
pectation has been realized. The act of
that date was passed in a time of profound
peace, and If we assume that no special
exigency called for unusual legislation. and
that resort to this mode of taxation is to
become an ordinary and usual means of
supply, the fact furnishes an additional
reason for circumspection and care in dis
posing of the case
The opinion here reviews numerous de-
cisions under the act of 1861, including the
Springer case, which was largely relied
on by counsel for the government in the
present cases to sustain their contention.
Chief Justice Fuller says: 1T is conceded
in all the cases, from that of Hilton to
that Of Springer, that taxes on land are
direct taxes. and in none of them is it
determined that taxes on rents or income
derived from land are not taxes on land"
Summing up. the Chief Justice says.
among other things: The requirement of
the Constitution Is that no direct tax shall
be laid otherwise than by apportionment-
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 il is
against all direct taxes--and Ii is admitted
that a tax on real estate is a direct tax.
Unless, therefore, a tax on gents or income
issuing out of lands Is intrinsically so diff
ferent from a tax on the land itself that
it belongs to a wholly different class of
taxes such taxes must be regarded as fall
ing within the same category as a tax on
real estate, 60 nomine: The name of the