The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1897-08-09
IT'S A POOR NAN 5 TAX
GOVERNMENTS BRIEF HAS THIS
INTERPRETATION.
Income Tax Law Was an Honest At
tempt of the Legislature to Even Up
the Peoples Burdens.

ernment's contentious on the consti-
tutionality of the income tax law The
suits brought by the Honolulu Iron
Works Company and James Campbell
for the tax payers against Tax Assos-
sor Shaw have already been argued
and submitted in the highest tribunal
and decision is anticipated before
the time arrives for the assessor to
call in the returns.
Alex. G. NJ. Robertson is the Gov
ernment's counsel. In his brief, filed
today, he says in substance:
Whatever the conditions are in the
United States, the Legislature of this
Republic is absolutely untrammeled
by any inhibitions and its powers in
regard to taxation are without CON
stitutional limitations of any kind"
The Government, according to the
brief, does not interpret the provision
of the Hawaiian constitution to be
limitation on the taxing power, and if
so, it is very flexible one. 1t insists
that the Legislature shall levy the tax
and not the Courts. The Legislative
branch of the Government has the
power to levy taxes inherently.
In taking up the alleged unconsti-
tutional provisions advanced by coun-
sci for the tax payers, Mr.. Robertson
first deals with double taxation.
The Government contends that in
the absence of constitutional restric-
ton, the Legislature has the power to
levy taxes as often as the eXigencies
of the. country may require, whether
it be annually, quarterly, or weekly.
Although the enforcement of both
the property tax and the income tax
laws may result in the taxation of the
same property on january 1, under
the one law, and again on July 1 un-
der the other, yet that is not neces-
sarily so, for if the individual spends
all the income he earns between July
| / and December 81, he is not taxed on
any part of it on January 1. So, also
| if a corporation distributes all its
profits during that period as dividends
! it has no income ION hand" which
may be subjected to the property tax
on January 1.
In speaking of exemptions, the Gov.
eminent states that the right of the
Legislature to nominate the objects
of taxation, to classify them, and &c
make exemptions has been repeatedly
upheld
The exemption of $4,000 was provid
ious, fraternal and scientific associa-
lions are clearly supported by public
consideration, in as much as they tend
to promote the general welfare of the
community. AS to insurance com.
panies, the Legislature evidently con.
sidered that the specific tax already
imposed upon them by Act 81, 1896
threw upon them their just share OF
the burden of taxation.
The exemption of $4,000 was proved.
ed on the theory that that sum rep,
resented the cost of supporting an
averaged sized family in reasonably
comfortable circumstances in this
country, and also because the Legisla.
ture had found that those persons
who constitute this class were al
ready bearing larger proportional
share of the burdens of taxation than
their more wealthy neighbors.
The Legislature of 1896 well knew
notoriety and newspaper comment at
the time, that the poor man and small
property owner were carrying more
than their share of the public bur
dens, as compared with the corpora
porations and other large property
holders. 1t may be said, without fear
of contradiction. that the enactment
of the income tax law was an honest
| of r,t ha mt &c hn 81. I'm.
to even up and equalize the burdens
of taxation, by requiring of those who
are best able to pay, share more in
proportion to their ability to respond
than they had therefore been in the
habit of paying.
A good reason for distinguishing
between individuals and corporations
in allowing an exemption of this kind
where the tax is upon the net income
is given by Justice Field when he
said: "The exemption of $4,000 is de
signed, undoubtedly, to cover the ac
tual living expenses of the large ma
iority of families, and the fact tina
it is not applied to corporations is eX
planned by the fact that corporation
have no corresponding expenses. Tn,
expenses of earning the profits are, o
course, deducted in the same manner
as the corresponding expenses of
private individual are deductable from
the earnings of his business. The mo
ment the profits of corporation ar
; paid over to the stockholders, the eX
emption of $4,000 attaches to them il
the hands of each stakeholder"
Under the income tax act by tn
United States Congress, party wa
punished for refusing to exhibit evi
dence against himself, and that pun
ishment was to be imposed withou
giving him hearing and without tn
right to appeal.
Under the Hawaiian statute, n
punishment is inflicted on the TIA
payer for refusing to produce hi
books or declining to answer interrc
cations.
The validity of the United States in
come tax of 1894 (Act 36), which wa
like the one here discussed, was no
attacked in the income tax case
which went up to the Supreme Cour
of the United States.
Mr. Richardson nnntaH nnmaron