Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1909-06-21
FIGHT TO TAX INCOMES
By Frederic j. Haskin

preme court. The attorneys for the
insurance company raised every ques-
ton that could be raised-among them
the constitutionality Of the law itself.
The court answered this question by
declaring that an income tax is not a
direct tax. William M. Evarts was the
attorney general in this suit.
Several other decision of a similar
nature followed this one, the most inn
portant of which was the case of Will
lam M. Springer, afterward a demo-
cratic leader in the house of represent
tatives. He refused to pay his income
tax, declaring that the law was uncon-
stitutional. The government levied on
and sold his homestead, purchasing it
for itself at the execution sale, and
then brought suit to eject Springer
On this issue the case reached the su-
preme court. Springer prepared his
own brief, and, fighting for his very
hearthstone, he is said to have brought
In as nearly complete presentation
of his case as ever was made of any
case in the supreme court. Neverthe-
less, the court held that an income tax
was not a direct tax, and that there
fore it was constitutional.
The whole controversy over what
constitutes direct taxes began when
the constitution itself was being
framed. 1t was in the course of that
uepdle tldl hulus Ming asked MS Ia
nous question: What are direct
taXes?''We have the word of Mr.. Mad
tson that the question went unan-
swered. The school of political thought
which holds that income taxes are in
cluded in the term direct taxes makes
much of this failure to answer Mr..
Kings question. The other school re-
plies that it is doing violence to rea-
son to assume that the constitution
trainers would put into that instru-
ment a phrase whose meaning they
themselves could not explain.
The first case in which the supreme
court attempted to 'pass upon this
question was the Hylton case. which
grew out of the carriage tax law
passed by congress in 1894. Madison
had bitterly opposed it, asserting that
the bill could be passed only by a COM
bination of those who were for it from
principle and those who were the OPP
ponents of luxury. Alexander Hamil-
ton and John Marshall each had part
in arguing the case. Madison went so
far as to have a letter of Edmund
Pendletons published in the hope that
the court would read it before rem
dering a decision. The contention of
Hamilton was that a tax on carriages
could not be apportioned, that one state
might have a hundred and another u
thousand, although having the same
population. This would force the peo-
pie of one state to pay ten times as
much on their carriages as those of
the other. The court held that the
tax on carriages was not a direct tax.
The opponents of an income tax to-
day declare that this tax on carriages
was a tax on the use of the carriages
and not on the carriage itself They
make this the crucial point of their
argument. If they can prove that it
was on the use of the carriage and not
upon the carriage itself they believe
they have overcome the conclusion of
the court that a tax upon personal
property is not direct tax.
1t is claimed by the advocates of an
income tax that it is not an apportion-
able tax. The population of the state
of New York is approximately six
times as great as that of Arkansas;
yet the aggregate of incomes of New
York above the limit of exemption is
at least twenty-four times as great
as the aggregate of taxable incomes
of Arkansas. The result would be
that Arkansas would have to pay four
York paid one, were the tax regarded
as direct and apportioned according
to population. This is identical with
Hamilton's claim with reference to the
carriage tax.
The first income tax in the United
States was levied by the Massachu-
sets Bay colony in 1916. Since then
many states have followed suit. From
the declaration of independence down
to the present time about one hundred
state constitutions have been adopted.
Thirteen of these have provided for
taxation of incomes. There are now
sixteen states in which legislative pro-
vision has been made for the collection
of income taxes. In most of these
states the amounts collected are Woe
fully out of proportion to the incomes
in the state.
It is of particular interest to note
that in the consideration of the income
tax laws of the civil war period there
was little or no opposition to an income
tax on the ground that it was a direct
tax. The debates show that most of
the opposition to it was based on con-
siderations of its expediency. When
the law ceased to be operative it did
so through the provision of the last
act, which set forth that it should be
effective for the fiscal years 1870 and
1871 land no longer"
The opponents of income taxes argue
that beyond the question of unconsti-
tutionality such taxation is inherently
unjust They assert that in the states
it is the wealthy who pay the taxes
and that wealth bears UNUSUAL bur-
dens. To this the friends of the in
come, tax reply that only 20 per cent
of the personal property of the rich
is assessed for taxation. Senator Bo-
rah recently emphasized this point by
declaring that 107 estates then in
course of settlement in single state
showed values aggregating s215 10000,
vet the total amount upon which these
estates had paid taxes had never
amounted to more than $3,000,000
Copyright, 1909, by Frederic J. Haskn)