The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1910-04-30

panies doing business in America, that
their income shall include income
from business transacted and capital
invested in America. Income from
all sources" and Income from capital
invested" would certainly include in
come from real property, from per-
sonal property and by way of interest
on state and municipal bonds. 1t
would therefore appear, at first blush,
as though the federal tax of 1894, held
invalid in the Pollock case.
But if the Pollock decision did not
expressly override prior adjudica-
lions of the Supreme Court upon the
income tax laws passed during the
period of the Civil War, and other
analogous cases, it at least reached
conclusion at variance with the
under standing of those prior adjjudi-
cations by such eminent legal writer's,
to mention only a few, as Chancellor
Kent, Judge Story, and Prof. Pomeroy.
And factor in the case which may
have some weight is that the person.
mel of the Supreme Court, as it exists
today, is so changed, that of the nine
members of the present court only
! four were on the bench when the Pol
lock case was decided of whom two
sided with the majority while the
other two wrote long and vigorous
dissents
Mote: Since this article was writ
ten, the death of Mr.. Justice Brewer
removes from the Supreme Bench one
Of the two survivors of the majority
in the Pollock easel
If the Pollock case is to be over
ruled by the Supreme Court at this
time, the federal taA on corporations,
in the opinion of the writer, will pro-
badly be sustained, as the objections
to that tax, such as lack of uniformity,
want of power in the federal govern
ment to tax corporations, and the like
objections, do not appear to rest on
a sound foundation. so far as the
writer has been enabled to examine
into the question. Without overruling
the Pollock case, however, the Sup
rene Court especially in view of the
language in the law which recites
that the tax imposed is a special ex-
else tax with respect to the carrying
on or doing business, may attempt 30
distinguish the present law from the
income tax law is valid in so far as
1t imposes a tax on income derived
from business transacted and holding
that in so far as it attempts to impose
a tax on income derived from real
property, personal property or by way
of interest from state or municipal
bonds, it is valid. In other words, in
stead of condemning the law as a
whole, as was done in the Pollock
case, the court may sustain that part
of the law which, in the Pollock
case, it was intimated might have
imposed a valid tax if standing alone.
and only reject that portion of the
present law which appears to be so
clearly opposed to the conclusions
reached in the Pollock case. And it
may Justify this severance of the valid
from the invalid parts of the law in
the present case by reason of the re-
ference in the law itself to the tax
as an excise tax.
What Parts of Taxes Should Be Paid
Under Protest.
If the time arrives 10 pay taxes I'M
der protest and no decision has been
rendered by the Supreme Court, It
would be the proper course to pay the
entire tax under protest. But should
the court render its decision before
the time for the payment of the taxes
comes around and should it hold any
part of the tax imposed by the present
law unconstitutional, that part of the
tax ought to be refused to the Col
lector Of Internal Revenue or at least
paid under proper protest, so that {
might be recovered. If the taxes are
paid under protest before the deci-
sion is rendered by the Supreme Court
not only should the entire tax be paid
under protest but each of the items
thereof should be paid under protest
which may, by any possibility, he
held invalid, so that due advantage
, might subsequently be taken of such
portion of the decision as might ne
to the company paying the tax.
What Constitutes an Involuntary
Payment.
In California those who have grown
accustomed to paying State or City
and County taxes under protest are
familiar with the practice which re-
uuires as the only basis for a suit &c