Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1903-03-09
A TAX DECISION
AN IMPORTANT DECISION RELAT-
ING TO INCOME TAX.
Judge Gilbert, of the Circuit Court of Ap.
peais, San Francisco, Renders an Opinion
That May be Far.Reachins in its Effects.
Hawaii Income Tax the Subject

+ An important decision was rendered
February 8, by United States Circuit
Judge Gilbert at the circuit court OF APP
peals, San Francisco. This decision re.
lated to the income tax and while it
Immediately applied to the constitutions
ality of the income tax law adopted by
the territory of Hawaii, because of some
OF the statements made by the court, it
will be Of general interest.
Referring TO this decision, the San
Francisco Chronicle says:
A bill was passed by the legislature Of
Hawaii in 1901, fixing tax of 2 per cent
on incomes above 81, 900. W. G. Peacot k
and fi.ty.nine other merchants OF Homo
lulu instituted an action against }. W.
Pratt, assessor and collector OF the dvi-
sion of Honolulu, Hawaiian territory, to
enjoin that official from the collection Of
the tax. The government planned to
collect $s,05G.6S on ret income Of
$402 1874 OF the complanants.
| Tie complaint was filed in the circuit
court of Hawaii, and set forth that the
act was invalid by reason Of being in
tory, and also with the federal constitu
ton. Compliments maintained that the
exception OF incomes below the amount
of 81 900 was illegal, and that the salary
Ct judges should have been excepted.
a demurrer was filed by the govern
ment. and sustained by the judge, and
the bill dismissed outright. The appeal
was then made. Judge Gilbert decides
that a territory has right to legislate in
the matter Of taxation, and, in affirming
the opinion OF the lower court saws:
"The appellants by their bill seek to
noin the enforcement OF the income tax
on the ground that it violates both the
organic act OF the territory and the con-
sttution Of the United States in that it
exempt the salaries OF judges and COM
pels taxpayers TO furnish evidence against
themselves that may result in their
criminal prosecution. 1t is contended
that the exemption of incomes to the ex
tent OF 81 900 is an illegal discrimination.
The power OF state legislatures to grant
reasonable exemptions is undisputed. 1t
has been upheld on grounds Of public
policy, a public policy which seeks to
exclude from taxation the living expenses
OF the average family and thus enable
the poor man TO escape from being
public burden. 1t rests upon the theory
that the exemption results in ultimate
benefit to the taxpayer. 1t does not
apply to corporations. for they have not
the same expenses as the individual. We
are unable to discover any ground for
holding that an exemption of income TO
the extent OF 81 GOO from an income tax
law is unreasonable, or that its allowance
is an abuse OF legislative discretion.
"Upon careful consideration of the
act and OF the averments OF the bill, we
discover no ground for enioining the col
lection of the tax, and find therefore no
equity in the bill. The act was undoubt-
edly intended to remedy the depletion OF
the revenues Of the territory. 1t contains
no evidence Of an intention to unjustly OF
unfairly discriminate. 1t places he
burden OF taxation upon the points OF
strongest resistance, where it is easiest
borne"
The fact OF general interest is that this
federal court having the Hawaii income
tax under consideration said: at con-
tains no evidence OF an intention to un
justly or unfairly discriminate. 1t Places
the burden Of taxation upon the points
of strongest resistance, where it is easiest
borne."
The objections that were raised against
the Hawaii income tax are similar to
those that are raised against proposed
income tax within our own country.
And yet in spite of all these specious
pleas the intelligent man must understand
that the income tax is the most rational
of all taxes and that in the language Of
the federal court at San Francisco cit
contains no evidence of an intention to
unjustly or unfairly discriminate. 1t
places the burden of taxation upon the
points of strongest resistance where it is
easiest borne."
And now the question suggests itself,
if the income tax in Hawaii contains no
evidence of an intention to unjustly or
unfairly discriminate" and if the Hawaii
income tax "places the burden Of taxa
ton upon the points Of strongest resist.
ance where it is easiest borne" why not
an income tax within the United States
Of America?