River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1895-04-11
VITALITY CHANGED.
The Income Tax Law Suffers III
the Supreme Court
IL 10 said That the Coming Decision Ell
empts Landlords and Bobdboiders
from Payment on Rents and
Interest In Securities.

line of the coming supreme court de-
cision with reference TO the income tax
law, and the debates of the justices in
the case. The special says:
Rends the Law.
THE United States supreme court has shot
the income tax law full OF holes The de-
cision has been completed and put into type.
and only awaits formal ratification at the con-
sultatiou 10 be held at noon to-day. The de-
cision OF the lower court is reverted. but the
income tax as q whole is upheld. but only by
divided court
Two important portions OF the law, how
ever, have teen decidedto be unconstitutional.
ana they are serious 10 affect materially
not only the revenues Of the government but
the estim alton in which the income tax will be
held by The people.
The Important Changes.
Under the decision TO be handed down by
the court, probably next Monday but possibly
later, all incomes derived from rents are
exempted from taxation by the federal gov
eminent and all incomes derived from state
and municipal bonds are similarly ex-
empted. In other respects the income tax
Law stands as IL was passed last August but
the result OF the consultations in the supreme
court shows very conclusNely that the law
can easily be picked TO pieces piecemeal. proc
yided suits are brought to contest each par
ticular point as IL comes up.
1T is a curious fact. but none the less true,
that the law which was passed at the dictation
OF the populistic wing OF a democratic con-
gress has been distorted by the decision of
the United States supreme court clearly on
constitutional grounds in such way that II
I will absolutely protect the class OF capitalists
most offensive to the populistie element.
Landlords and Bondholders Exempt.
"The landlords Of the country will pay no
income tax The owners OF bonds of almost
any kind. either federal, state county or
Il, flala 4haR
man, the manufacturer and the salaried en-
ploye will. for the present at least be COM
| PEELED to contribute to the treasury Of the
United States government per cent. Of all In
comes in excess of $4,000 per annum.
The holes made In the income tax law are
SO fatal as to necessitate either its repeal or
It's material amendment. as the people OF the
country viii hardly care to see the large capt
talists and trust companies absolutely pro-
teeted while the poor men, comparatively
| speaking, are forced to contribute 20 run the
national government
The entire income tax law as passed by
both houses OF congress and approved by the
president OF the United States has been
trembling the balance for two weeks and
now will be construed constitutional
statute only because the supreme court OF the
United States while upsetting two portions OF
the law. is evenly divided the general
principle OF the constitutionality OF the whole
enactment
Divided as to Constitutionality,
When the first vote was taken as TO the
general principle OF the constitutionality OF a
law OF congress taxing Incomes IL was found
that the court was evenly divided Only
eight justices heard the arguments. Mr.. JUS
tice Jackson being too I'll to appear In court
The vote disclosed the fact that Chief
Justice Fuller and justices Field, Gray and
Brewer we're opposed to the law IN toto. They
believed It Unconstitutional as passed by
congress and that It was a direct tax which
according TO the constitution must be levied
among the states according to the population
as returned by the census.
Justices Harlan, Brown, Shiras and White
voted to sustain the law as whole. They be-
lieyed and supported their opinions by con-
Nucing argument that while particular por-
tions OF the law we're clearly unconstitutional
the general effect OF an income tax could not
be considered as opposed to the principles laid
down in the constitution.
Decided by Five to Three.
On this proposition as to the constitution
alty OF the law In so far as it related re rents
derived from real estate the chief justice and
Judges Field, Gray and Brewer who believed
the whole law unconstitutional. voted
with Justice Brown. thus deciding this par
ticular portion OF the law unconstitutional by
a vote OF s to 3 This the first and most
serious break for the entire income tax law.
The question then came up OF course, as to
whether the ruling out Of incomes derived from
rents would make the whole law unconstitu-
tional on this point Justice Brown promptly
deserted his four allies and the court was
again evenly divided They had decided the
tax on rents unconstitutional, but the question
Of whether that invalidated the whole law or
not was still as far from settlement ever.
The break came finally from the place
where IL was least expec ted Chief Justice
Fulter. who believed that the whole law
bad and direct violation OF the constitutional
limit2tion upon the power OF congress to levy
taxes. was persuaded finally that rents
could be exempted from taxation by the court
without interfering with the constitutionality
of the statute a whole leaving that to be
affirmed by the doubtful process of a divided
court. The deadlock was broken TO certain
extent by this proceeding and the court was
thus enabled TO upset two important parts OF
the law, leaving the remainder OF the income
tax to be practically affirmed. because a di-
vided court can neither affirm nor reverse the
decision OF the court below which aecordinglv
stands
field sternly Against the Law.
The most vigorous opponent OF the law
throughout was Mr. Justice Field. who would
consent to no compromise; who believed the
law unconstitutional from beginning TO end.
and who supported his opinions ia all the con-
situations IN the most vigorous and able
manner. 1t is entirely probable that he will
write and submit a strong dissenting opinion,
holding that the law is unconstitutional in it.
self and limiting at the compromise which has
been reached ny which certain classes OF caps
italists will be unduly favored while others
will have to pay the tax
The Opinion.
The opinion of the court. so far as il was
| agreed uppu. was turned over to the chief
Justice and he labored on IL for four days
far as can be learned, putting aside all other
business and endeayoring TO make decision
which would be satisfactory to the conflicting
elements H. the court. The opinion states
49, ha Ia
low in the cases OF Charles Pollock against
the Farmers Loan and Trust company. of
Louis II. Hyde against the Continental
Trust company. and OF John c. Moore
sg.inst the con missioner Of internal
revenue. is reversed. and then goes on to
state that the trust comp mics
strained from paying any income tax on reve-
nues received from the rents OF real estate or
from interest paid on state and municipal
bonds OF all de criptions, The fact is also
stated that the supreme court is evenly divided
| on the question of the cOnstttutionllity Of tue
income tax, and hence that that portion Of the
decision OF the court below is neither affirmed
nor reversed
THE expectation among members OF the
| court Is that the decision win be rendered
| Monday in open court, but the justices have
been so evenly divided eve since the argu-
ments we're concluded that the decision as 1t
now stands is so much matter Of compro-
mise and patchwork that there is bare posi-
biity that at the final gathering to-day the
court may again split up into irreeoncilable
sections and hold I'D the decision until they
are able to come together again.
Entire Law May he Declared Void.
The situation in the supreme court is evil
IDENTIFY such that new suits will be instituted,
based on particular issues, and II these are
pressed with sufficient vigOr u IL quite likely
that the law may be knocked to pieces para
graph by paragraph. The decision Just writ
ten bV Chief Justice Fuller. while essentially
| a compromise shows that the Law In effect is
full OF flaws. even though majority OF the
court could not be brought to say that it was
so radically faulty as to be unconstitutional
Returns VIII Need Revision.
Under the law all returns on the income
tax must be submitted 10 the internal rev
enue collectors by Monday, April l5 just
one week from next Monday. Thousa IDS Of
returns have already been submitted, and, al
though they are largely from the smaller
taxpayers, who hive not waited to hear fl I'M
the supreme court, 1t is safe to assume that
quite a large proportion Of them contain items
which will now have TO be revised in accord
ance with the decision OF the court
disappointed Lover Kills Himself
OMAHA, Neb., April 6.-Upon being
informed by the lady to whom he was
engaged that she no longer loved him
but would marry another, f. Adams
Colvin. former editor of the Randolph
0a.l Register, shot himself through the
-, b.r v,raSanra Mt bar homo in,