Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1895-04-16
rs MUCH DISFIGURED
INCOME TAX PARTIALLY KNOCKED
OUTBY A DECISION. =

INCOME TAX PARTIALLY KNOCKED
.oUT:8Y A DECISION.
Supreme Court Holds That I"c"mcs From
Rents, State, County and Municipal
bonds Cannot he Taxed by the Federal
Government 49, Otherwise the Law IL
Good.
WASHINGTON. April 9.-After almost
a month Of elaboration the United
States supreme court rendered its de-
cision in the income tax cases, deciding
by a divided court the law to he valid,
except regarding the incomes derived
from rents and from municipal bonds,
OH which point the decis on was that
the tax was unconstitut .onal.
The courts conclusions after review.
ing tho historical and other phases of
the question were as follows:
/. That by the constitution. federal
taxation is divided; into two great
classes-direct taxes and duties, imposts
and excuses.
?. The imposition of direct taxes is
governed by the rule of apportionment
among the several states, according to
numbers and the imposition of duties,
imposts and excuses by the rule Of uni.
formity throughout the United States.
3. That the principle that taxation
and representation together was in"
tended to he and was preserved in the
constitution by the establishment Of the
rule of apportionment among the sew
eral states, so that such superintendent
should be according to numbers in each
etate.
1, That the states surrendered their
power to levy imposts and to regulate
commerce to the general government
and gave it the concurrent power to
levy direct taxes in reliance On the pro-
lection afforded by the rules prescribed,
and that the compromises Of the consti-
tuition cannot he disturbed by legislative
action.
5. That these conclusions result from
the text of the constitution, and are
supported by the historical evidence
furnished by the circumstances sur"
the framing and adoption of
that instrument and the views of those
who framed and adop tedit.
6. That the understanding aud ex-
recitation at the time Of the adoption of
the constitution was that direct taxes
would not be levied upon the general
government, except under the pressure
of extraordinary exigency aud such has
been the practice down 10 Aug Is,
1894. If the power to do so is to be ex-
ercised a. an ordinary and usual means
of supply, that fact furnishes an add.
tional reason for cirepmspection in dis
posing of the present case.
!, That taxes on real estate belong
to the class Of direct taxes, and that the
taxes on the rent or income Of real es.
tate. which is the incident of its own
ership, belong to the same c.ass.
s. That by no previous decision Of
this court has this question been adju-
d;cated to the contrary Of the conclu-
SONS now announced.
=. That so much Of the act OF Aug.
10, 1894, rs attempts to impose a tax
upon the rent or income of real estate
without apportionment is invalid.
The court is further Of opinion that
the act Of Aug. 10, 1894, is Invalid SO
far as it attempts to levy a tax upon
the income derived from municipal
bonds. As municipal corporation is
the representative of the state and one
of the instrumentalities of the state
the property and revenues
OF municipal corporations are not sub
lects Of federal taxation, nor is the in
come derived from state, county and
securities, since taxation on
the interest therefrom operates OH the
power to borrow before it is exercised and
has a sensible influence on the contract.
and therefore such tax is a tax on
the power Of the states and their instru-
to borrow money, and
consequently repugnant to the consti'
tuition.
Upon each of the other petitions
argued at bar, to wit:
First-Whether the void provisions
as to rents and incomes from real estate
the whole act.
Second Whether as to the income
from personal property as such, the act
is unconstitutional, as laying direct
taxes.
Third-Whether any part Of tho tax,
if not considered as direct tax. is in
valid for want Of uniformity on either
OF the grounds suggested.
The justices who heard the argu-
ments are equally divided and there
fore no opinion is expressed.
The result is that the decree OF the
circuit court is reversed, and the case
remanded with directions to enter a
decree in favor of complainant in re-
spect only of the voluntary payment Of
the tax on rents and income Of its real
estate, and that which it holds in trust.
and on the income from the municipal
bonds owned or so held by it.
The delivery Of the opinion consumed
Just one hour. Chief Justice Fuller
began at 1906 and concluded at 1906.
He was followed by Justice Field, who
read the first dissenting opinion, speak.
ing in low tone that contrasted no
ti.sably with the loud delivery of the
chief justice.
Justice Fields Opinion.
Justice Fields opinion was largely
devoted to review Of the provisions
rents and was vigorous de.
nuac alton of the principle sought to be
established by the income tax law. his
conclusions being in conformity with
those announced by the chief justice.
Justice White followed Justice Field
in another dissenting opinion.
Justice Haitian followed Justice
White in dissenting opinion, and the
case was closed. Nothing was said to
shoN hwy any : Of the iustices stood.