Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1910-09-16
INCOME TAXES

BY BYRON MILLETT,

with REGARD to Them.
BY BYRON MILLETT.
The Wilson Tariff Bill was passed
by Congress and approved by Presi-
dent Cleveland, in 1884, 1t con-
tanned a provision providing for q
two per cent. tax on all annual in
comes exceeding four thousand dol.
lars, which was to continue in force
until January 1st. 1900. Between
1898 and 1916, Congress enacted five
income-tax measures. which we're as
sumed to be valid, on the authority
of the Hylton case, 8 Dallas Reports.
Page Ill, decided by the United
States Supreme Court in 1896. This
case affirmed the constitutional.
ity Of the act of Congress of June
9Th. 1874, wherein a tax upon carri-
ages for the conveyance of persons
was imposed. Mr.. Justice Wilson, o
member Of this high court at that
time, had been a prominent member
Of the convention which framed the
United States constitution, agreed
with the other members OF the court
in sustaining the law that the tax
was an indirect tax. or duty, and in
no sense a direct tax.
Reference to this case has often
been made by Story, Kent, Pomeroy
and many other able writers on con-
stitutional law, that q direct tax
within the purview of the constitu-
ton, referred to q poll-tax, or a d.
rect tax on real estate. This was
considered by statesmen and jurists
as o correct interpretation OF those
terms for over one hundred years,
until the decision of the Pollock case,
reported in 157 U. S. 429. Pollock
was o stockholder in the Farmers
Loan and Trust company, brought a
suit in equity to enjoin the company
from paying an income tax imposed
under the Wilson bill. On April
9th. 1895, the U. S. Supreme Court
consisting of eight judges, was even
ly divided in regard to the validity
OF this tax on incomes derived from
personal property, while a majority
of the court held the tax unconstitu-
tional as to incomes growing out of
real estate transactions, or derived
from municipal bonds. No final con-
clusion was reached at that time, by
reason of the illness of Judge Jackson.
Mr.. Justice Shiras had been favor
ably disposed towards the validity of
this tax as regards personal prop
erty, on April 9th. 1895; afterwards
changed his mind and on the Goth
day of the. succeeding month the
whole enactment was declared void
by decision of five to four members
of this high tribunal.
In addition to the five income tax
enactments by Congress, between
1898 and 1916, already referred to,
we find that between 1861 and 1870
there had been enacted eight income
tax laws providing for the collection
of taxes on incomes arising from
both real and personal property.
The validity of which had not been
questioned by the judiciary or other
governmental departments. In 1884,
this same court was called upon to
cOnstrue one of the civil war. income
tax provisions, applicable to incomes
arising from both kinds of property,
held the law to be constitutional.
Springer VS.. United States, 102 U.
S., 596.
Notwithstanding all the revenue
amounting to many hundreds OF
millions of dollars that had been col
lected through previous iucome tax
laws on the basis of former rulings OF
the court, less than a dozen years
after the decision OF the Springer
case, the court reversed its former
decisions on this question which de-
prived this nation of great revenue
and placed greater burdens on the
masses OF our people because single
Judge happened to change his mind
in less than six weeks time.
Granting that the opinions OF the
majority of the members OF the court
in the Pollock case ontain the bet
ter reasoning with reference to the
language employed in tie Federal
constitution on the subject under
consideration had the question been
an open one, still the proposition is
pertinent asserted long ago by Lord
Coke that the certainty of rule OF
law is frequently of greater import
ance than the reason of it. which
gathers additional force when the
same had been acted upon for more
than one hundred years as settling
the difference in meaning between a
direct and an indirect tax.