St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-04-25
NOT A DIRECT TAX,

in 1894 decided that tax on carriages
was
NOT A DIRECT TAX,
the chief justice says that each OF the
justices while suggesting doubt
whether anything but a capitation or
a land tax was a direct tax within
the meaning of the constitution, dis
tfnctly avoided expressing an
opinion upon that question or laying
down comprehensive defnitfoHsbu
confined his opinion to the case be-
fore the court The acts of July a.
1S43, and of August 5, 1861, are re-l
viewed, after which the following
propositions are laid down:
First-Tihat the distinction be-
tween direct and indirect taxation
was we'll understood by the trainers
of the constitution and those VINO
adopted it. &
Second-That under the state sys-,s
TENS of taxation all taxes on real,
estate or personal property or thei
rents or incomes thereof, were re-
garded as direct taxes.
Third-That the rules of appor-
tionment and of uniformity were
adopted in view Of that distinction,
and those systems.
Fourth-That whether the tax on
carriages was direct or indirect was
disputed, but the tax was sustained
as a tax on the use and anexcise.
Fifth-That the original expecta-.
tion was that the power of direct tax
alton would be exercised only in ex-
traordinary exigencies, and down to
August Is, 1894, this expectation has
been realized. The act of that date
was passed in a term of profound
peace and if we assume that no
special exigency called for unusual
legislation, and that resort to this
mode of taxation is to become an
ordinary and usual means of supply,
that fact furnishes an additional
reason for circumspection and care
in disposing of the case.
The opinion here reviews numerous
decisions under the act of 1851, in
Guiding the Springer case, which was
largely relied upon by counsel for
the government in the present cases
to sustain their contention. Chief
Justice Fuller says: "It Is conceded
in all these cases, from that of Hill
ton to that Of Springer, that taxes on
land I.
ARE DIRECT TAXES
and in none of them is it determined
that taxes on rents or income de-
rived from land are not taxes on
land"
Summing up, the chief justice says,
among other things:
THE requirement of the constitu-
ticn is that no direct tax sha1lsbe laid
otherwise than by apportionment-
the prohibition is not against direct
taxes on land, from which the impH-
cation is sought to be drawn that In
direct taxes on land would be consti-
tutional, but it is against all direct
taxes-and it is admitted that tax
ON real estate is a direct tax. Uuless,
therefore, a tax upon rents or income
issuing out of lands is itrinsically so
different from a tax on the land it
self that 1T belongs to wholly differ
ent class of taxes, such taxes must be
regarded as falling within the same
category as tax on real estate co
nomine. The name of the tax is un-
important. The real question is, is
there any basis upon which to rest
the contention that real estate belongs
to one of the two great classes of
taxes and the rent or income which
is the incident of it's ownership be-
longs to the other. We are unable to
perceive any ground for the alleged
distinction. An annual tax upon the
annual value or annual user of real
estate appears to US the same in SUBJ
stance as an annual tax on real es-
tate, which would be paid out of the
rent Or income. This law taxes the
income received from the land and
the growth or product of the land.
Justice Patterson observed in Hill
tons case, land, independently of its
products, is Of no value and certainly
mad no thought that direct taxes were
confined to unproductive land.
IF 1t be true that by varying the
form the substance may be changed
1t is not easy to see that anything
would remain Of the limitations of the
constitution or of the rule of taxation
and representation SO carefully recog-
nized and guarded in favor of the citi-
zens OF each state. But constitutional
provisions cannot be thus evaded. IT
is the substance and not the form
winch controls, as has indeed been es-
tapl1shed by repeated decisions of this
court. 1t is not doubted that
property owners ought to contribute
IN just measure to the expenses of the
government. AS to the states and
their municipalities, this is reached
largely through the
IMPOSITION OF DIRECT TAXES
las to the federal government, it is
attained In part through excises and
iholrect taxes upon luXuries and con-
sumption generally to which direct
taxation may be added to the extent
that the rule of apportionment allows.
And through one mode or the other.
the entire wealth Of the country, real
ana personal, may be made, as ii
should be, to contribute to the com
mon defense and general welfare, but
the acceptance of the rule of appor-
| tlonment was one of the compromises
| which made the adoption of the consti-
tuition possible, and secured the crea-
tion of that dual form of government
SO elastic and so strong, which has
| thus far survived in unabated vigor.
| If, by calling tax indirect when il
| is essentially direct, the rule of pro-
lection could be frittered away, one OF
the landmarks defining the boundary
| between the nations and the states OF
| which it is composed would have dis
appeared, and with it one of the bull
warks of private rights and private
| property.
I'VE are of the opinion that the law
In question, so far as it levies a tax
on the rents or income of real estate,
is in violation of the constitution, and
| is invalid.''
THE TAX ON BONDS.
Comparatively brief space is devoted
to the question of a tax on the income
| derived from municipal bonds.
''The constitution" says the opinion,
10 ~l.4 4