New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-05-09

the Constitution. When substantially the same
question came before the court In 1880 In which
citizen OF Illinois. Hon. william NJ springer
resisted the payment Of a National income '"N
on the ground that such tax was dircct TAX
and. not being levied in the proportional manner
presented by the Constitution was not legal the
court decided that direct taxes. within the
moaning OF the Constitution. are only capi'ation
(head) taxes, and taxes on real oatatc; ana mat
tho tax OF which the plaintiff complains a. o.
direct TAXI IN within the category OF an excise
or duty" And now the same question II again
before the same court for adjudication; ana the
fact that the Court allows 1t to he again pre-
scented and rcargucd is conclusive evidence that
IL IL not satisfied with previous DECISIONS ana
regards the question at issue as an unsettled
one.
re- NOW Il was clear and certain as to the ex-
net meaning that the trainers OF the Consttu-
ton intended to apply 20 the VOID direct
when they used 1t in connection with prospective
Federal taxation. the case under consideration
would be ended and in fact would never have
been begun. But they left 10 clear and certain
EXPRESSION OF opinion on this subject, and 1t Is
doubtful II they collectively ever had one On
this point the evidence Of Hamilton is con-
elusive: for In his legal brief in the carriage
case in which he appeared as counsel for the
Government he says: What is the distinction
between direct and indirect taxes? 1t Is mat
ter OF regret that terms so uncertain and vague
on so important point are to be found in the
Constitution. We shall seek in vain FOR any ante
cedent settled legal meaning to the respective
terms We shall be as much at a loss 10 ma
any distinction Of either which car satsiac-
tor.ly determine the point" But 1t Is 10 De
further noted that in his argument in behaif OF
the Government In the carriage case Hamilton
mentioned as taxes which were TO be consdereo
capitation (polD taxes. taxes on land and build
ings and general assessments. See his brief IN
the case referred to)
THE INCOME TAX A DIRECT ONE.
All historical data explanatory Of the const-
tutional meaning Of the term direct have &C
cordingly been of an indirect character and SO
imperfect that the Court has heretofore APP
parently not regarded them worthy of con-
slderation But this condition of things no longer
exists. for in the brief recently submitted to and
In the argument made before the United States
Supreme Court adverse to the constitutionality
of the provisions of the present Income Tax
law by Hon Clarence A. Seward. department
Of national history which historian or jurist
had ever before completely exploited has been
so traversed by him that ii is difficult TO see
how any one can acquaint himself with It's re-
suits and doubt that. although the trainers OF
the Constitution and the people they represented
might not fully agree as TO a full and compre-
hensive definition of direct tax there was ap-
parently a perfect unanimity Of opinion among
them. that an income tax was a typical example
of that kind Of taxation.
Previous to the adoption Of the Constitution
there were no Federal taxes, and all precedents
for helping to a correct determination Of the con-
stitutonal meaning of direct taxation must there
ha 1ro he
several States. What was that experience? Re
cent historical research shows that Massachusetts,
had taxed incomes for more than hundred years
prior TO the assembling Of the Constitutional Con-
yention; other OF the leading States were mpos-
ing like taxes at or about 1884, and the receipts
therefrom were used to help pay the quotas de-
manded by the then Government of the Confeder-
alton for the maintenance or the Federal Govern
ment. The income tax so paid. and all or the
other internal taxes collected by the States were
known and called direct taxes, and are so called
to-day. Congress now goes into Massachusetts
and requires its citizens to pay second income
tax for the benefit OF the Federal Government.
How does the fact that Federal law imposes the
tax convert 1t into indirect tax or duty
when the same tax paid TO the State always has
been and Is now called direct tax, and was so
called by all the States which were paying 1t I'M
mediately before the construction and adoption OF
the Federal Constitution?
The Constitutional Convention empowered Con-
gress to levy Of the authorized forms OF taxa
ton on the States; but the levy of direct taxes
was guarded by provision that such taxes
should be apportioned to the population. The ex-
PLANTATION Of the curious anomaly is that the con-
sensus OF opinion In the convention was that
wealth at that period was 50 equtaby divided
among the people Of the States that population
was the best measure Of wealth and consequently
Of equitable taxation. But what would become OF
the element Of equality II the levy In the form
NJ ind
which, falling on consumption Of tea, coffee, sugar.
spirits and the like. leave II optional with the cti-
zen In great degree whether he will pay or not?
Hamilton certainly thought that the door had
been effectually closed against the possibility Of
any such evasion, for. when speaking of direct
taxes in The Federast," he says: AN actual
census or enumeration OF the people must furnish
the rule: circumstance which effectuaily shuts
the door to Partially or evasion"
CONFUSION AND DISCRIMINATION.
It is also worthy Of note that the Court in all
the cases involving the constitutionality of an
income tax when levied in any other manner
than the Constitution prescribes for direct
taxes. has apparently attached no Importance
to the meaning Of the term direct" as 1t is
almost universally accepted in ordinary speech
and literature; neither has 1t to the fact. that
an income tax has always been regarded
typically direct tax by almost every acknowledged
authority on finance and political economy In
the English and French languages. from the
days OF Adam Smith and Turgot 10 the present
time. The only warrant for such indifference
would appefr TO be based on the assumption
that the meaning. or definition. OF the term
direct" as applied to taxation Is too indefinite
and uncertain 10 admit of strict and invariable
usage and application. But this assumption
ought not TO be hereafter warranted. for we
now have. almost for the first time. a definition
OF or Distinction between direct and indirect
taxes that is founded on sound philosophy and
large experience. and cannot be refuted. namely:
A direct tax has always in II an element Of
II
whose property or income direct tax is levied
has no option whether or when he shall pay.
There Is nothing voluntary about II. On the
other hand. an indirect tax, whoever may first
advance 1t. is paid voluntarily. and primarily
by the consumer OF the taxed article.
But the most important and vital issue in