The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1901-08-14

tional, the act as whole is void. If
there is one condition that would make
the law impossible the act is illegal and
void
Now in regard to Determinations.
The section of the law which provides
for the taxation of corporations, baSing
such estimates upon the yearly profts
lis, | think, a tax upon the privileges of
corpora lions, but this law goes further
and Discriminate between the earnings
|of individuals and of corporations. Why
should an Individual have an exemp-
ton of $1,000 and a corporation pay on
net profits? Why discrimination be-
tween the property of an individual and
|of corporation? 1t makes no differ
ence whether the discrimination is in
favor of the individual or of the cor
poration, we claim it is an unlawful
Determinations capricious one, if you
please. A man with an income of $1,000
"a year may have nothing left at the
end of year yet he is allowed but a
thousand dollars. The corporation may
have a much less expense proportion
ately If that be unlawful discrimina-
tion the whole law is Illegal, and if
that contention be sustained by your
honors it would be practically impos-
provision.
'Inheritances are taxed under the
general law if received before January
1st, yet the income tax provides that in
heritances shall be taxed, unless the
heirs have paid the Inheritance tax.
This in my opinion would be a case of
duplicate taxation and consequently IL
legal
1T may be argued that the present
law is not burdensome; no matter how
inconsiderable the burden of this law,
there is telling how heavy it will
be made in the future if this court
holds that no limitations are placed by
the constitution upon the Legislature
of Hawaii. We all know what it will
lead to in the end 1t would be re-
markable instance of untrammeled
power if the Legislature could do what
Congress cannot do. The general tax
law already taxes real estate, and now
comes this law and taxes the Income
upon it.
pay but l per cent, while all other cor
porations pay per cent Has the
Legislature any power to make such
distinction in the class or corpora
tions? If it has. then it could provide
a separate tax for coffee corporations,
sugar companies, etc. Ii could say
that rice planters shall pay so much
sugar corporations so much and so
on through the entire list If one cor
poration is picked out it is an unjust
discrimination, not because it would
make so much difference In the
amount. but because of the principle
of the law
This concluded the argument, at the
close of which Judge Galbraith asked:
How could a proportiopare tax, as
provided by the constitution, be
made ?"
1T is practically impossible re-
sponded Mr.. Hartwell.
MR.. LEWIS ADDRESS.
Mr.. Lewis followed the opening
speaker with more exhaustive. argu-
ment, quoting literally from authori- 1
ties to sustain his points. He began ,
with the general statement of his
ground of contention: arguing that the
law was invalid for the following rea-
sons: Discrimination between corpor-
ations and individuals. unlawful ex- I
emptions; unlawful penalties; taxation
of the salaries of the chief justice, and
associate Justices. and of the circuit +
judges; taxation of United States
bonds; and in conclusion because the
act as whole was Illegal. ITO begin,
said Mr.. Lewis, THE income tax as a
whole is Objectionable, because it
makes the burden difficult to apportion i
1t has never been looked on with favor
because it prizes into the private af-
fairs of individuals and corporations
and has always been the last tax re-
storted to by States or Territories
AS to the discrimination: Corpora
lions are as much entitled to have the
protection of the law as are individ-
uals: absolute conformity cannot be
obtained under any system, but when
there is a plain and unjust discrimina-
ton as is the case here, it is in vio-
lation of the constitution or the United
States. The tax is not upon a fran
chiSe or business of a corporation
which the government giving the fran
chise to these corporations may have
the right to tax, but this Is simply
a question of whether the property is
owned by an individual or by cor
poration. 1t may be said by counsel
on the other side that the $1,000 exemp-
ton makes but little difference in the
general distribution of the tax, but this
has no bearing, it is the principle that
is in violation of the law.
AS to the unlawful exemptions of
insurance companies the underlying
principle of taxation is that any such
exemption must result from some pub
lie service. What have the insurance
companies done that they should be
subject to such exemption?
The Supreme Court has held an ex-
emption of $4,000 to be unreasonable.
Is this exemption of $1,000 any more
reasonable? Is it purely for living ex
penses? If it is, why should only one
in a family be exempt? l think this
is case of special legislation against
the married men in favor of the single i
men. If a woman is teaching school, I
why should she not be exempted, be-
cause her husband happens to be work
ing. 1t seems to place a tax upon in
dustry
The law is unconstitutional in that
it violates article 5, which provides
that no person in criminal case shall
be compelled to testify against them
selves and also grants the right of a
speedy and public trial This law re-
quires corporations and individuals to
produce their books. and the assessor
is given authority to summon witness