The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-06-20

The refusal of congress to pass an IN
come tax law, largely on the ground that
II would be a direct tax, serves TO snow
how legal opinion. as well as public sen
/ tfment may change. For d hundred years
/ the courts and congress proceeded on tlie
theory that an income tax was not a.
rect taX-OF more strictly speaking tiiaI
taxes on lands and capitatiOn taxes were
the only forms Of direct taxation, WIllch
must according to the Iedefal cOhslltu-
/ ton, be appOTtio1ed among the various
states in proportion to population. wen
tv-one justices of the supreme court hau
taken this view, directly or indirectly
while only five had held A contrary Opih-
/ ion. ..- e.
| of the Cleveland administration. fIst'
/ the supreme court held that a tax On
rent was a tax on real estate, and tnere-
| fore unconstitutional. Another case was
soon brought before the court IN winch II
/ was contended that any sort OF an income
tax was unconstitutional. This was the
I famous Pollock case, in Wnlch the c9UIl
stood four 10 four, Judge jackson OF rem
/ nessee being i'll and unable TO sit. On a
/ rehearing, Judge Jackson took part ana
supported the cOnsututionahty OF the law
But one of the justices who had voted 10
uphold the law at the first hearing. voted
against it OF the rehearing, and in spite
/ of Justice JacksOn's arising from a SICK
bed to sustain the law, il was declared
unconstitutional by a majority OF one
vote.
The world at large, and even the most
careful writer's, have always attributed
/ the change TO Justice ShiTas OF Pennsyi-
vsnia, but Senator Bailey Is authority IOr
| the statement that it was not Shiras, but
Horace Gray of Massachusetts,, who voted
/ 70 uphold the law in the first case ana 10
/ declare it unconstitutional at the second
hearing. Justice Shiras never affirmed nor
denied the charge that he had changed
his mind. it being an unwritten law that
no justice shall discuss outside the con-
sultation chamber that which takes place
/ behind its portals. II Senator Bailey Is
| correct concerning this matter, and he
! seems to know whereof he speaks, this
/ furnishes a remarkable and unusual in
stance Of widely disseminated information
| of an erroneous character. However IL
may be- the fact remains that the chang
/ ing of a single mind served to reverse
| precedents of a hundred years.
The first income tax law ever enacted
/ by the American congress was that of
/ 1861, known as the Stevens Morrill, act.
/ Practically everybody acquiesced in it,
and as a part Of a general emergency
revenue measure 1t was but little dis
/ cussed. The law was repealed in 1862, and
another substituted therefor. The second
| law was amended several times. The first
year Of the income tax law the revenue
derived from II was about S15,OOOOOO, The
next year it was 81 10000. During the
fiscal year 1856 the income tax reve-
nue. was 100000. and the following year
/ S57 10000 Therefore the line of exemp-
/ ton was continually placed higher and
/ the revenues from the tax declined TO
/ s27 100000 in 1870.
( the agitation that led to the repeal of
/ the income tax law in 1870 was directed
more against the exCessivenes Of the tax
| than against its principle. Special Com
missioner Wells stated in his report that
an income tax OF per cent was higher
/ than any nation had ever before levied
except in time of great emergency. He
advocated that the rate be cut to per
owrd1 -fnd arr
/ In 1870 the law was amended so as TO
make the exemption 5000 and the rate
| 21z per cent. 1t was by its own terms to
remain in force only one year. This win
[ ter a bill was introduced by Senator ScOOt
FOf Pennsylvania, the effect Of which was
I to repeal the income tax law entirely.
Senator John Sherman, afterward secre-
/ taTy of the treasury and secretary Of
state, reported the bill adversely. A few
days later it was considered and passed
/ by a majority Of one vote.
/ The matter was brought up in the house
| by a resolution denying the right Of the
senate to originate income tax legislation.
Randall of Pennsylvania made a point Of
order against the resolution but Speaker
Blaine held that it was in order. The
house adopted the resolution, but the SEN
ate tenacioUsly adhered to it's course in
spite Of the action Of the house. Both
houses appointed cOnferees. but they were
unable to agree. Later a bill was offered
in the house to repeal the law. Con-
4
a majority Of one vote, just as one vote
had passed the income tax measure in
the senate.
From the beginning Of the government
there had been many cases decided which
indirectly affirmed the constitutiOnality
of an income tax. But the first case in
which that precise question arose was
that of the Pacific Insurance company
against SOule. Originally it was not at
all q case to test the validity of the in
come tax law. The suit grew out of the
difference in the value Of gold and paper
money. The insurance company rendered
1876 as the amount of its income tax
the tender being in paper money The
collector refused this, declaring that il
should be in gold, OF the equivalent Of
gOld-SZ365 in paper. 1t was on this issue
that the case went to the supreme court
The attorneys for the insurance company
raised every question that could be raised
among them the constituuonaiity of the
law itself. The court answered this ques-
ton by declaring that an income tax is
not direct tax. William NJ. Everts was
the attorney general in this suit.
Several other decisions of a similar ma
ture followed this one, the most import
ant OF which was the case of William
H. Springer, afterward a Democratic
leader in the house Of representatives. He
refused to pay his income tax. declaring
that the law was unconstitutional The
government levied on and sold his home
stead, purchasing it for itself at the exc
cutfOu sale and then brought sf1if tn