The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-04-16
ANEW RAP AT THE INCOME TAX
sIEGEL, COOPER AND COMPANY EN-
JOINED FROM PAYING 1T.

One of the Members of the Firm
brings the ActiOn-The COnstftu-
tionaIity of the Law Attacked on
several GrOunds-The Tax Not Uni-
form-The suit Aims 20 Test the
Entire Act-The Danger of "A Fine
DOdged.
Chicago. H., April 15.-Judge ShOwalter,
IN the United States court this morning,
enjoined Siegel. Cooper < Company from
making any return to the internal revenue
collector under the provisions of the in
come tax law. The restraining order was
granted on a bill filed by Gerson siegel.
one Of the New York stockholders in the
defendant corporation. The bill attacks
the law, and under the order granted this
morning the government will be com
PEELED to take part in the proceedings to
defend the operation Of the new law.
When the attorney for Mr.. siegel pre-
sented the bill to Judge Showalter, the
latter asked for an explanation of the
This is the last day for the return of
the income tax to the collector OF inter
nal revenue" said the attorney. MY
client protests against his firm making
any payment of the income tax, or any
report. He maintains that the bin in its
entirety is unconstitutional. All we ask
is for an order restraining the firm Of
siegel, Cooper & Co. from making its re-
turn to-day. II not granted, the firm
will be liable to an imposition of s., 900 fine
for failing to make the return
Judge Showalter took the application
and after reading it made the restraining
order. A bond of $1,000 will be filed. By
the issuance of the order of the court
the frm escapes the payment of the fine,
should the supreme court. to which the
question will be carried, decide against the
pomulqiuHuf
Nir. Siegel in his bill raises all of the
questions that are involved in the income
tax dispute, including those decided by the
supreme court last week. His grounds
for the unconstitutionality of the act are
set forth In the following order: THE pro-
visions Of the income tax are unconstitu-
uonal, null and void, and If cOllectable
upon the defendants income or profits 1t
Is a direct tax in respect to real estate and
in respect to its personal property, by levy
ing an impost upon the profits and income
thereof, which direct taxes are not in and
by said act apportiOned among the several
states, as required by the constitution of
tax is not uniform as required by the con-
sututon. The profits OF many corpora
tons tS9 ann amount to less ,h6sea than $500
such corporations, although in
dividuals carrying on and transacting sim
liar business under like conditions, and
having like property, values and quantities
and incomes, are exempted by the act from
the power of said tax.
Tine TAX IS not UNIFORM because your or
ator has an annual income, and, as ne IS
Informed, numerous holders of stock in
corporations likewise have annual in
comes Of less than $4,000, and the effect of
such payment will be to lessen and dimin-
ish the dividends of such stockholders and
compel them to bear and pay the tax,
although other parties of the same class,
similarly situated, whose income is less
than the $4,000, are exempted.
1T is not uniform IN that it Is imposed
i upon one per cent. of the population of the
United a the other %
4 exempted, although they hold among
themselves, the greater part of all prop
erty, real and personal, in the United
States.
ut is not uniform in that tax OF per
4 cent. is imposed on all incomes acquired
by gift of inheritance, while no similar
tax is imposed on real estate acquired un-
4 der conditions similar thereto.
1T is not a uniform tax in that II eX-
empts from its operations all mutual in
S surance companies, whose aggregate
wealth is $1,200,000,000 and imposes the
tax upon all other insurance companies.
1T eXempts building and loan associa-
4 tons whose aggregate holdings are $685.,
10000, yet such are certainly private in
Savings banks operated on the mutual
plan are exempted from the operation OF
4 the tax, whose aggregate deposits are
N.lS,OO0 600, while all other savings banks
4 are taxed.
The income tax is mot uniform because
n It varies according as the property be-
4 longs to am individual or to more than
one individual.
The tax is unconstitutional, In that it
81 imposes a tax upon property rights vested
q prior to the passage of the said act and it
Il deprives persons of their property without
due process of law"
Mr.. Siegel's attorney said that it was
& &ntended to test the entire act before the
#supreme court. THAT part of the act
(Which remains in force" said he, lis due
% divided court, and is the opinion of
+ Inc court below. Had the opinion of the
0urt below been against the constitution
5 atty of the entire act, the division of the
supreme court would have caused the law
10 fail. By bringing the matter up again
&court"
AS Gen. Black, the United States dis
Il trlct attorney is out of the city and will
lot return for some days, no action will
ne taken in calling the issue up for hear
ing until next Monday
NGROVER no rrrr, D.Dm~-,s prsr,rrxr