The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1909-10-28
1rrmtunt Taatllmam.
THE INCOME TAX AMENDMENT.

that will be laid upon the General
Assembly of Vermont next year will
be to raitfy or to reject a proposed
amendment to the Constitution of
the United States relating to the levy
ing of tax on incomes.
According to Prof. Charles ]. Bull
lock, of Harvard University, sixteen
States of the Union have employed
this form of taxation and six are still
using it-Massachusetts, Virginia,
North Carolina, South Carolina, Lou
isiana and Tennessee. Massachusetts
has levied such a tax from 1913 to
the present time.
With the outbreak of the Civil
War, in 1861, an income tax was
levied as a war measure, which con-
tinued in force until 1872, when the
law was repealed. The rate and the
amount exempted were changed sew
eral times during that period. In
1894 Congress passed a law designed
to remain in force five years, taxing
incomes, and all persons having an
income in excess of $4,000 were re-
quired to make a verified return to
the collector, also all persons acting
in a fiduciary capacity. The con-
stitutionality of this law was attack
ed. The United States Supreme
Court at the first hearing declared
that the tax imposed upon the
income of real estate was
unconstitutional because such a
tax was a direct tax within
the meaning of the Constitution, and
should have been levied by the rule
of apportionment which the Constitu-
ton prescribes for direct taxes. 1t
declared further that the tax could
not be imposed upon the income from
State or municipal bonds, since the
United States Government cannot tax
the powers of the State or local gov
ernments to borrow money. At
later hearing the whole act was de-
clared invalid on the ground that a
tax on the income from personal
property is direct as we'll as a tax on
the income from real property; and
that the failure to provide for the
apportionment of the tax on the in
come from real and personal proper
ty rendered the entire law invalid.
Just before the close of the last
session of Congress the following
joint resolution was adopted: rs. ].
r. 400 Resolved by the Senate and
House concurring therein) That the
United States of America in Con-
gress assembled (two-thirds Of each
House concurring therein). That the
following article is proposed as an
amendment to the Constitution of
the United States, which, when rati-
fed by the Legislatures of three
fourths of the several States, shall
be valid to all intents and purposes
as a part of the Constitution.
Article 16. The Congress shall
have power to lay and collect taxes
on incomes, from whatever source
derived, without apportionment
among the several States and with
out regard to any census or enumer-
alton"
Note the scope of this amendment
1t may LAY and collect taxes on in
comes from whatever source derived.
There is absolutely no restriction
The salary of the Governor of YER
mont, and the salaries of the men,
bers of the Legislature may be taxed
as part of their respective incomes
The incomes from the bonds of
States or municipalities may be tax
ed to any amount thus lessening the
power Of these States and cities to
borrow money and depreciating the
value of their securities. There exists
in this amendment the power seri-
ously to embarrass any State or
municipality in the United States
by taxing it's sources of income
and the salaries of it's Of
ficials 1t will be urged that such
exercise of the taxing power would
never be used. But why place such
power in the hands of the Govern
ment? What exigency demands it,
In discussing this phase of the in
come tax law of 1894 Mr.. Justice
Field, in his opinion in the case of
Pollock VS.. Farmers Loan and Trust
Company, quoting from Judge Cooley
says:
THE power of the tax, whether by
the United States or by the States is
to be construed in the light of, and
limited by the fact that the States
and the Union are inseparable, ant
that the Constitution contemplates
the perpetual maintenance of eacf
with all it's constitutional powers UNI
embarrassed and unimpaired by &C
tion of the other. The taxing powers
of the Federal Government does no
therefore extend to the means o.
agencies through or by the employ
ment of which the States perform
these essential functions, since
these were within reach, they nigh
be embarrassed and perhaps who'll.
paralyZed by the burdens it shoul'
impose. That the power to tax in
wolves the power to destroy; tina
- JAf ~.