The Washington times., 1895-03-08
FIGHTING The INCOME TAX
Argument on the Cases Begun in the
Supreme Court.
W. D. Guthrie Opens for ApreI1ants-He
Holds That the Law Is Unequal
in Its Application.

The Supreme Court did not reach the in
come tax cases until 8 O'Clock yesterday.
when W. d. Guthrie was recognized to open
the case for the appellants He appeared
especially for Messrs. Pollock and Hyde,
who appeal the case against the Farmers
and Continental Trust Companies OF New
York, from the decision of the United states
court OF appeals for the southern district
of New York.
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 70
show that the tax is notuniform. contending
that Congress had no right under the con-
stitutiOn to levy tax, duty, excise, or
impost which was variable or lacking IN
uniformity as 70 individuals or corpora
tions, because il was the fundamental rule
that burdens in these respects should bear
equally upon all alike.
He said that Mr.. Pollock was a share
holder in this company, the net income OF
profits OF which during the past year, sub
ject to the income tax. exceeds $500 900,
Of which $50 900 represents rents of real
estate and about $4,000 investments in
could not, he claimed, be taxed under a
former decision of the Supreme Court
Mr. Guthrie asserted that the provision
of the law exempting all incomes under
$4,000 would cause it to fall upon less
than per cent. of 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 a favored class were exempted. as.
for instance, mutual insurance companies
and building associations, as well as part
nerships and religious and benevolent in
stitutions.
As to the exemption of churches, benevo-
lent concerns, etc, counsel would have moth
ing to say, as there was enough in the other
exemptions in cases where the exemptions
Were in the interest of shareholders,
though called by another name. TO afford
sufficient text for all they could say
As illustrative of tile effect OF the operation
of the law he pointed out that an individual
owning real estate bringing an income of
IS 900 would pay $50 tax, while a corpora
ton would be required to pay doub that
amount He also instanced the case of a
partnership of five persons doing a busi-
ness amounting to $4,000 year, which
would be required to pay no tax, while
corporation composed of the same persons
would be compelled to pay $500. In q
word. he said, the application of the law
WOulu 10 OW ueISlilu-
Referring to the. exemption made in
the interests of mutual insurance COM
panies, he asserted that in the United
States there were 300 such companies,
and that of these 500 were doing busi-
ness on the mutual plan and he said that
in New York alone the wording of the act
exempting such companies would relieve
a thousand million dollars worth ofproperty
from its operation.
Mr. Guthrie dwelt upon the exemption in
the interest of the building and loan as
sociation, who were, he said, relieved of
the annual payment of 100000, and
whose assets, it has been asserted, were
greater than the combination of capital of
all the national banks. All that men would
have to do to evade the operation of the law
would be to organize building and loan as
sociations
He argued that if the present law should
be held to be constitutional, Congress
could levy duty OF 20 per cent. on the
imports OF individuals, and so per cent on
| those OF corporations, or il the sentiment
| i'll Congress should change, it could as easily
reverse the process and favor the corpora
| tions. The principle would be the same.
| Mr.. Guthrie will resume his argument
| at noon to-day.