Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1895-04-11
INCOME TAX LAW BADLY
RIDDLED.
Frs ESCAPE TAXATION.
But the Court Makes no Interpretation
tice Field, However, Declares the
Whole Law Null and Noid-Several
Dissenting Opinions.

DIV dICeu ueclSlOu VI the supreme court
in the income tax was rendered by
Chief Justice Fuller. The court
knocked out the law SO far as it taxed
incomes derived from rents and also
from state, county and municipal
bonds. By a tie vote OF the courC the
law was sustained in other respects.
The court said:
In Charles Pollock VS.. The Farmers
Loan and Trust company ct al, it is
esta blished:
L. That by the constitution federal
taxation is divided into two classes:
Direct taxes and duties, imports and
excuses.
80. The imposition Of direct taxes is
governed by the rule of apportionment
among the several states, according to
numbers, and the imposition Of duties,
imports and excuses by the rule Of uni
formity throughout the United States.
%. That the principle that taxation
and representation together was in
tended to be and was preserved in the
constitution by the establishment Of
the rule Of apportionment among the
several states SO that such apportion-
ment should be according to numbers
III each state.
81. That the state 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 defiance on the
protection afforded by the rules pre-
Scribed, and that the compromise Of
the constitution cannot be disturbed by
legislative action.
70. That these conclusions result
from the text of the constitution and
are supported by the historical evil
dence furnished by the circumstances
surrounding the framing and adoption
Of that instrument, and the views Of
those who framed and adopted it.
IS. That the understanding and eX-
pectation 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,
and such has been the practice down
| to Aug. Is, 1894. If the power to do So
is to be exercised as an ordinary and
usual means OF supply, that fact fur
: nishes an additional reason for cir
cumspection in disposing Of the pres
ent case.
-. That taxes OH real esta tie belong
TO the class Of direct taxes,
and that the taxes on the
rent or income of real estate, which is
the incident of it's ownership, belong
to the same class.
IS. That by no previous decision of
this court has this question been adj
Indicated to the contrary of the con-
illusions now announced.
+ -. That so much OF the act Of Aug.
10. 1894, as attempts to impose tax
upon the rent OF income of real estate
without apportionment is invalid.
The court is further of opinion that
far as it attempts to levy a tax upon
the income derived from municipal
/ bonds. AS a municipal corporation Is
the representative of the state, and one
of the Observation-Disclosures of the state
government, the property and reYe-
nues of municipal corporations are not
subjects Of federal taxa ton, nor is the
income derived from state, county and
municipal securities, since taxation on
the interest therefrom operates on the
power to borrow before it is eXerciSe ed
and has d sensible influence on the
contract and therefore such a tax is a
tax on the power Of the states and
their instrumentalitieS to borrow
money, and consequently repugnant tC
the constitution.
Equally Divided.
: Upon each of the other petitions al.
gued at the bar, to-wit: First
whether the void provisions as &c
rents and incomes from real estate III
validate the whole act; seconC
whether as to the income from per
sonal property as such the act is I'M
constitutional as laying direct taxes
third, whether any part of the tax, il
not considered as direct tax, is in
valid for want of uniformity on either
Of the grounds suggested; the justices
who heard the arguments are equally
divided and therefore no opinion is eX
pressed
The decree of the circuit court il
reversed and the case remanded will
directions to enter a decree in favor
Of complainant in respect only Of thu
: voluntary payment of the tax on rent:
[ aud income Of its real estate, and tina
which it holds in trust, and on the in
l come from the municipal bonds owned
or so held by it,
2 The announcement of the foregoing
1 conclusions of the court was preceded
by a review of many opinions of thu
supreme court from the time Of Chic
Justice Marshall down to the cele
brated Springer case brought by eX
: Representative Springer, of Illinois
e and by an exhaustive review Of the ma
t ture Of the direct and indirect taxation
n in the course of which the chief jus
e tive reviewed the debates leading u
n TO the framing of the federal consti
tuition. In conclusion the chief jus
tice states that this opinion upon til
Pollock case covers the two othe
cases.
ej The delivery of the opinion cor
:: sumed just one hour. He was 70
l. lowed by Justice Field, who read tn
first dissenting opinion, speaking i
a low tone that contraSted noticeabl
with the loud delivery of the chic
justice. The decision applies to thre