The Washington herald., 1909-06-20
FIGHT TO TAX INCOMES
~ FREnERIc J. HAsKIN.

The refusal OF Congress % pass an
Income tax law, largely on The ground
that It would be a direct tax. serves 70
show how legal opinlon, as well as pub
lie sentiment. may change. For 100 years
the courts and Congress proceeded on
the theory that an income tax was not
q direct tax-or. more strictly speaking.
that taxes on the lands and capitation
taxes were the only forms Of direct tax
alton. which must. according 20 the Fed
eral Constitution be apportioned among
the various States IN proportion 10 pop
ulation. Twenty-one justices OF the Su-
preme Court had taken this view. directly
or indirectly, while only ave had held
a contrary opinion
Then came the fight on the income tax
OF the Cleveland administration. First
the Supreme Court held that a tax on
rent was a tax on real estate, and
therefore unconstitutional Another case
was soon brought before the court IN
which Il was contended that any sort
OF an income tax was unconstitutional
This was the famous Pollock case. n
which the court stood four 20 four. Judge
Jackson. OF Tennessee. being 81 and IN
able 70 sit On a rehearing, Judge Jack
son took part and supported the consti-
tutionality CT the law But one Of the
justices who had voted 70 uphold the
law at the first hearing voted against II
on the rehearing. and IN spite os Justice
Jackson 8 arising from a sick bed 10 sus-
tain the law, It was declared unconst-
tutional by a majority OF one vote
The world al large. and even the most
rseas 80
the change 20 Justice Shiras. Of Penn
sylvanis, but Senator Bailey IS authority
FOR the statement that Il was not Shiras
but Horace Gray, OF Massachusetts. who
voted 70 uphold the law In the first case
and % declare Il unconstitutional az the
second hearing. Justice Shiras never ar
firmed or denied the charge that he had
changed his mind. Il being an unwritten
law that no justice shall discuss outside
the consultation chamber that which
takes place behind its portals u Senator
Bailey Is correct concerning the matter
and he sens 20 know whereof he spea ks
this furnishes a remarkable and unusual
instance Of widely disseminated informa-
ton e an erroneous character. How
ever - may be. the fact remains that
the changing OF a single nlind served tC
reverse pEENEltlLS OF = nlNNEeU years.
The drst income tax law ever enactet
By the American Congress was that Of
I 1851. known as the Stsvens-M0rrll act
Practically everybody aceglesced IN t.
and as a part OF a general emergency
revenue measure II was but little dis
cussed. The law was fepealed IN 1852 and
another substituted therefor. The sec
Ond law was amended several times Ths
first year OF the income tax law the reve-
nue. derived from IL was about 81. .000 on
The next year 81 was SZIo00 600. Durins
the fiscal year 1865 the income tai
Z revenue was 60009 COO. and the following
year 81. 900. 90. Thereafter the line OF ex
emption was continually placed higher
and the revenues from the tax declineJ
10 $4,000 IN $50
/ The agitation thar led 70 the repeal OF
/ the income tax law in Is75 was dl-ecte,
more against the excessiveness OF TIT
/ tax than against It's principle. Specia
/ Commissioner Wells stated in his repor
I that an income tax OF per cent wa.
( higher than any nation had ever befor
levied except IN sine OF great emergency
+ He advocated that the rate be cut %
( per cent. and levied OF all incomes abov,
Sl.0o0 In $50 the law was amended s.
as % make the exemption S200o and n.
i rate 2iA per cent. Il was by its own term,
7 10 remain in force only one year. Tha
winter q bin was introduced by Senator
Scott, OF Pennsylvania. the effect o.
which was 10 repeal the income tax Law
I entirely Senator John Sherman, after
I ward Secretary OF the Treasury and Sec
retary OF state reported the bin sd
versely. A few DAYS later Il was conSid
/ cred. and passed by a majority of on
/ vote.
The matter was brought Up IN the Hous
/ by a resolution denying the right OF III
Senate 20 originate income tax Iegisla
/ ton Randall. OF Pennsylvania, made
! point OF order against the resolution. bu
. Speaker Blaine held that II was IN order
( The House adopted the resolution, but III
/ Senate tenaciOusly held 20 lis course &,
/ spite Of the action OF the House. Bot
/ Houses appointed cOnferees. but they Wer
I unable 20 agree. Later a bill was Offere.
I IL the House TO repeal the Law. Consid
| Grafton Of this measure was refused b,
q majority Of one vote. Just as one vot
I had passed the income tax measure il
I the Senate.
he whole controversy over what con
-.