The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1895-04-17
THE INCOME TAX.
Action Of the Supreme Court Of
f1cially Made Public.
Extracts from the Opinions of the JUS
tices-Rents and Interest on Bonds
Exempt, But the Law Is Valid
In Other Respects


stitutional so far as it affects
incomes derived from rents and real
estate or from state, county and mu-
nicipal bonds The court was divided
as to the remainder of the law, and as
the decision of the court below was in
favor of its constitutionality that de-
cision must stand.
An Accurate Forecast.
Chief Justice Fuller read the decision
before one of the largest audi
ences that ever crowded into the
courtroom. The closest attention
was accorded him. but it was soon
evident that the press forecast had
been an accurate one, and hence there
was less interest taken in the decision
than would have been the case had it
not already been discounted in the
newspapers.
How the Justices Stood.
Upon the question of the constitu-
tionality of the taxation of incomes
from state and municipal bonds the
court was unanimously in the mega
tive.
Upon the question of taxation OF
rents the court stood as follows:
Affirming the law justices Harlan and
White.
Against the law--Chiei Justice Fuller JUS
tces Field Gray, Brewer, Brown and Shiras,
Upon the general question OF the
constitutionality of the law, the court
is said to be divided as follows:
For the law--justlce, Harlan, Brewer,
Brown ami White.
Against the law-Chlef Justice Fuller, JUS
tices Field, Gray and Shiras.
synopsis OF the Decis on.
The conclusions of the court were
stated to be IS follows:
/. That by ule constitution federal taxation
IS divided into Two great classes: Direct taxes
md duties, imports and exciSes.
. That the imposition OF direct taxes is
governed by the rule of apportionment among
the several states, according to numbers, and
the imposition of duties, imposts and eXcises
by the rule OF uniformity throughout tho
United States,
3. That the principle that taxation and rep
resentaton 20 together was intended to be
ana was pvescfibat in the constitution by the
establishment OF the rule OF apporuoument
among the several states, so that sucn appor-
tionmeat should be according 10 numbers in
each state.
That the states surrendered their power
to levy imposts aud TO regulate commerce to
the general government and gave it the con-
current power to levy direct taxes in reliance
on the protection afforded by the rules pre-
scribed, and that the compromises Of the con-
stitution cannot be disturbed by Legislative
action.
o. That these conclusions result from the
text OF The constitution, and are supported by
the historical evidence furnished by the cir
Gun stances surrounding the framing and
ado ttlon OF that Instrument, and the views OF
thcss VINO framed and adopted it.
That the understanding and expectation
at the time OF the adoption of the con-
stltution was that direct taxes would
not be levied by the general govern
ment except under the pressure OF ex-
traordinary exigency, and such has been the
practice down to August Is, 1894 II the power
to do so Is TO be exercised as an ordinary and
usual means Of supply, that fact furnishes an
additional reason for circumspection In dis
posing Of the present case.
T. That taxes on real estate belong to the
class OF direct taxes, and that the taxes on the
rent or income OF real estate, which is the In
CluCub VI lbo OWhOiohAPt bViOhB w bhO ooAAo
class.
T. That by no previous decision OF this court
has this question been adjudicated to the con-
trary Of the conclusions now announced
That so much OF the act Of August Is, 1894,
Rs attempts TO impose o tax upon the rent or
income Of real estate without apportlonment
as invalid.
The court is further OF opinion that the act
OF August 10, 1894, Is invalid so far as it at
tempts to levy tax upon the income
derived from municipal bonds. As mu-
nicipal corporation is the representative Of the
state and one of the instrumentalities Of the
state government. the property and revenues
OF municipal corporations are not the subjects
OF federal taxation, 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 exercised and has a sensible lnflu-
ence on the contract, and therefore such o tax
IS tax on the power OF the states and their
instrumeutahties TO borrow money, and conse-
Quently repugnant to the constitution.
Justices Are Divided In Opinion.
Upon each of the other questions argued at
the bar, to-wit: /. Whether the void provi-
sions as TO rents and income from real estate
invalidates the whole acty Whether as to
the income Of the personal property as such, the
act is unconstitutional as laying direct taxes?
8 Whether any part Of the tax, il not con-
Bidered as a direct tax is invalid for want Of
uniformity on either Of the grounds suggested?
the justices who heard the argument are
equally divided and therefore, no opinion is
expressed.
The result is that the decree of the circuit
court is reversed and the cause remunded with
directions to enter decree In favor OF COM
Niatn in OnI " ~ ha
meut OF the tax on tho rents and income OF It's
real estate and that which 1t holds In trust,
and on the income from the municipal bonds
owned or so held by 1t
Field and White Read Opinions.
justices Field and White read inde-
pendent opinions, the former holding
the law wholly invalid.
Should Be Declared Null and Void.
Justice Field devoted some time to o review
Of the provisions regarding rents, and de-
nounced the principle sought TO be established
by the income tax law. Many Of his conclusions
were In conformity with those expressed
by the chief Justice He also attacked the law
on account Of Its lack OF uniformity. and dwelt
upon its exemptions and the many discrimina-
lions found therein In conclusion Justice
Field announced his opinion that the whole
void
Thinks tho Law All Right.
Justice White prefaoed his dissenting opin-
ion with the statement that the custom OF rem
dertng long dissents In court Of last resort
was moro honored In the breach than In
the observance Their only effect was to
weaken the efioiency Of the opinion Of the
court Justice White said he should not speak
but for the fact that the court had overruled
and set aside established precedents
and the settled and uniform doc
trine OF the supreme court down to the present
time He regretted that at this late day this
court should thus overthrow and nullify an
oct Of congress, supported and affirmed by
Rll text writer's and by every decision
OF the supreme court Of the United States
Effect of the Decision.
WASHINGTON, April 9.-The effect Of
tha o,,prauna oOurt daniaiOp IN tho IN.