The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-05-25
Reimbursement May Be Asked
for Taxes Under the
Old Law.
MILLIONS WERE PAID HERE.
Court of Claims the Tribunal to
Which Appeal for Redress
Should Be Made.

once II the decision was not IN eueCt
declaration that the income-tax legislation
enacted during the war was directly con-
trary to the constitution.
If the Supreme Court is now right in
overthrowing law taxing incomes it was
wrong when it sustained law imposing a
tax of that character. The decision is re-
markable in this, that it reverses a broad
principle under which hundreds of mil
lions of dollars have been collected from
the people of this Nation and paid into the
National treasury.
In the argument of the case when the
issue was pending in the United States
Supreme Court Attorney-General Olney
raised this very point, maintaining that
persons who paid the tax under the old
law would be entitled to relief were the
new law declared unconstitutional. The
m oral obligation of the Government to
reimburse the people who paid the former
tax can hardly be questioned in view of
the recent decree of the court, and if steps
are not taken for reimbursement by many
who did pay it viii be indeed strange and
out of the order of things.
No decision handed down from the Su-
preme Court since the famous bred Scott
case has created more profound and wide
spread comment throughout the country
than the one to which reference is here
made.
In San Francisco deep interest in the
subject is taken, not only by lawyers but
by citizens of every vocation. The income
tax was perhaps but an incident of the
war in Eastern cities, but in San Francisco
1t was great event. The records of the
Internal Revenue Department will show
that here in the San Francisco district the
ratio OF persons paying the tax to the
whole population was greater than in any
other city of the United States.
More than that the aggregate amount
collected was the greatest district collec-
ton. 1t is a compliment alike to the 10y
atty and law-abiding spirit of the commun-
lty that no resistance to payment was
made in the courts or elsewhere. There is
no record or suspicion of perjury having
been committed to evade payment.
San francisco paid more internal revenue
tax than all other parts of the coast put
together, and the incomes of the people as
reported to the Federal Assessor were
larger than those of any other revenue dis
trict, not even excepting the Third
Congressional District of New York,
which had a poulation of 100000
and was reputed to be the wealthiest in
the country, as 1t contained the residences
of many of the merchant princes of the
commercial metropolis of the Nation. In
1864 the gold incomes of San Francisco
amounted to $13600,000 exceeding $40, 000,-
600 as currency basis. Out of 10000
voters, 5000 paid incomes on more than
$500 in gold. The average income of these
5000 was $1700.
The amount of regular annual per cent
income tax paid in the San Francisco dis
trict (San francisco and San Mateo) was
$4,000, and the amount of the special in
come tax at per cent was $675, 900.
There are many well-known citizens OF
California who now recall the cheerful
manner in which payments were made, and
among them can be mentioned w. w.
Montague. William Alvord, Lloyd Tevis,
Raphael WE'LL, Henry Marshall, Sidney
Smith, Levi Strauss, w. f. Whittier,
Bernard Murphy, NJ. Castle, General John
Hewston, George w. Granniss. James M.
Mcdonald and David Bush.
The act of August 5, 1861, imposed di-
rect tax and a tax on incomes but the in
come portion of the act never took effect.
The first income law under which any tax
was collected was the act of July ID, 1862.
Under this act the tax was 3 per cent on
incomes over $500 and not over $4,000;
over $4,000. per cent. Act of March 3,
1865. over 5000 and not over $4,000 5 per
cent; over $1,000, 10 per cent on excess over
$4,000. Act of March 2, 1867, over $1,000, 5
per cent. Act of July IA, 1870, over $1,000,
2% per cent. No income tax was collected
under the act of June 80, 1864, as it was
amended by the act of March 3, 1865,
before it became collectible, but the
numerical order Of the sections of the act
of June 30, 1854, was preserved through all
the subsequent amendments until the act OF
1870. The income tax expired with assess
ment in 1870 of the income of 1869, accord
ing to the limitation contained in section
119, but was reimposed with some varia-
lions and made applicable to the incomes
OF 1870 and 1871, by the act of July IA, 1870.
Tho foil l1r,I, 10 1T
States Internal Revenue Tax System" is
an abstract of the decision of the United
States Supreme Court on the old law:
1t is not competent for Congress, under
the constitution of the United States, to
impose tax upon the salary of judicial
officer of State. Collector VS.. Day, 18th
Wall, 113.)
The question whether the income tax
was direct tax within the meaning of the
constitution, deliberately discussed and by
all the authorities reviewed and the de-
clsion OF the court stated as follows:
'Our conclusions are, that direct taxes,
within the meaning of the constitution,
are only capitation taxes, as expressed in
that instrument, and taxes on real estate {;
and that the tax of which the plaintiff in
error complains (the income tax is within
the category OF an excise or duty" (Sprin-
ger VS.. United States, II Otto, 1861
Questions OF the validity of succession
TAX, under the act OF June 80, 1864, as
amended. In reviewing the question of
the constitutionality of this tax, the court
says that, whether direct taxes in the
sense OF the constitution comprehended
any other tax than a capitation tax
and tax on land is question
not absolutely decided; nor is it
necessary to determine it in the present
case, as it is expressly decided that the
term does not include the tax on income,
which cannot be distinguished in principle
from succession tax, such as is involved
IN the present controversy" Tax held to
be constitutional and valid and rightfully
levied. (Scholey VS.. Rev, % Wall, 331.)
The principle involved in the income-tax
enacted during the war does not differ from
that expressed in the law of 1894, which
the court recently set aside. The section
expressing the intention of Congress in the
law of 1894 reads as follows:
Section 81. That from and after the LIST dav
of January, 1894, and until the list day OF
January, 1900, there shall be assessed, levied.
collected and paid annually upon the gains,
profits and income received in the preceding
calendar year by every citizen of the United
States, whether residing at home or abroad
and every person residing therein, whether
said gains, profits or income be derived from
any kind OF property, rents, dividends or sal
aries or from any profession, trade, en-
ployment or vocation carried on in the
United States or elsewhere, or from
other source Wha tax of nor