The Hawaiian gazette., 1913-12-23
To
TEST INCOME
TAX LAW
Understood that Residents Of This
Territory Are Planning to Begin
Action Similar to One Brought
in Illinois to Set Aside Measure
That Levies Tribute on Wealth
Producers. rH.
.From saturday AdycrtiscNl

1t was reported yesterday that steps
are being taken in Honolulu 90 engage
counsel and test the constitutionality
of the income taS law. This step has
already teen taken on the mainland.
! Suit was entered in the United States
court for the northern district OF iii.
pois, December 3, by W. Bourkc Coeh
rane, acting as counsel for Elsie dc
Wolfe, attacking the coustitutionality
| OF the new income tax law
Suit is brought by the plaintiff
against bank for Withholding coupon
payments. The plaintiff is an Ameri.
can citizen residing in Versailles
| France, and has refused to sigu Ger,
tificate prescribed by the United States
| government stating whether or not she
claimed exemption from the tax lowed
against certain incomes by the income
| tax.
What Action Is Based Upon.
The suit is based on an Interpretation
of Section s, Article | of the Constitu-
ton, the Fifth Amendment aud the
Fourteenth Amendment Action is
brought under Paragraph 5, Section "a,
| Chapter of the Judicial Code.
Section s, Article | provides for uni
formity of taxation throughout the
United States. The principle has been
well established that the uniformity in
tended is geographical aud this intcr-
probation is supported by many supreme
court decisions.
The points made by the plaintiff are
against the equality of the sur-taX She
claims that there is unjust discrimna-
tion against persons of moderate means
in favor of those of large means.
"The income of the plaintiff being
over $4,000 year, says the plain.
TIFF "shc is liable not merely to tax
Of one per cent upon her whole income
in excess of $4,000, (shc being Il single
woman), but she is subject to an addi.
tional tax or penalty of one per cent on
that portion of her income which may
exceed 100000 but is less than $50
O0O an additional orc per cent on all
income which may exceed $4,000. but
is less than $40 600, and an additional
one per cent on all income which may
exceed $4,000, but is less than $780,
600.
Lighters Burden of Rich.
son the other hand, persons with in
comes exceeding 100000 are taxed but
an additional one per cent on the whole
excess up to $25O,00O; that is to say,
on such excess that would be required
to pay but one-siXth of the rate levied
on plaintiff, whose income is less than
100000; those persons whose incomes
? exceed S25OOO0 n year are taxed but
! one per cent on the whole excess up
to 100000 that is to say, they are re.
quircd to pay but onc-tcnth of the rate
levied on the plaintiffs; and those per.
sons with incomes exceeding 100000
are subject to penalty of but one per
cent. additional, no matter how great
may be the annual revenues enjoyed by
them; whereas, if all persons whose in,
come exceed 500 600 "A year were taxed
in the same proportion as plaintiff
those with incomes of S2jO,0O0 would
be subject not to the additional penalty
of five per cent which this statute i'm.
poses on them, but to a penalty of ten
per cent; those with incomes of 5000,
600 IA year would he subject not to a
penalty of six per cent, which this stat
ute imposes on them, but to penalty
of 30 per cent; those with incomes of
Sl,O00,O00 "A year would be subject not
to penalty of seven per cent, which
this statute imposes on them, but to :!
penalty of forty per cent; those with
incomes of S2,JGO,OOO and over, instead
of being subject to penalty of seven
per cent, which this statute imposes on
I them, would be compelled to pay pen.
4, atty of 100 per cent, that is to say
. they would he required to pay the en-
/, tire excess of their income over ~ 800
{ 600 year into the public treasury
. The complaint then sets forth that
there are several persons in this roun
try enjoying incomes over S2,jOOOO0 =
year, not one of whom actually cHpcnds
such Il SUN for his or her support
inequality Pointed Out.
T II is then explained that if these per
sons were compelled to pay the same
, rate Of taxation as the plaintiff they
p would not thereby have 10 contract by
one penny the sums they now actually
eXpend for their support, while on the
other hand, "every penny of the income
, which the plaintifr derives from her in
dustry is absolutely necessary either IA
her support or the maintenance Of hcI
, business.
The complaint then proceeds IN this
/, way
, "Iluiutin further alleges on informa
ton and belief that the total revenue
, which would Doe yielded annually Dos
, this proposed income tuE, 10 b. were
actually levied, would not ozrrol s5n,
y uun,pnn, while IL the tnN sought to lr
, imposed on plaintin were mudp uu.f orr
upou an persons the total revenues lr
rived would eN.rri t7iuuuONIU un
lnuallVN
The romplHIut roueludass
"flniutH alleges thut Boo rfWNfIu.
y | with such sutrilY lnruuu mrh m
r hor, Nhllr allowing po.-rs.nr nf Don
Gomez rfrn'liuH fluu,tuu 40 rf'apH VIA
, rrrh fhully uponionaiH lfnHltf
b Ibis alleged income inA uHHrrHNrs n
. deprive rlHWIn uf hrf W0HWn WIfh
. DIi HIr pfler ~ iaHI tnuiIHrI 40 Ih.
b fiiiH Amendment ~ ih. 'HnlImIoH
y Hu4 nnirnHNw iu irub HrI rIWI HH
irriIuu uf tHr iHNf. frHlIHN g. tNi