South Bend news-times. (South Bend, Ind.) 1913-1938, 1916-01-25
INCOME TAX AID
IN PAYING costs
Ruling of Supreme Court
PaVeS Way For ConStitu-
tlOnaI Action.

WASHINGTON. Jan. 25.-The in
come tax was declared constitu-
tional Monday by the supreme court
In a unanimous decision which
swept aside every contention raised
against il. and. in the opinion Of
congressional leaders. opened the
way for increasing the tax rate on
great fortunes to help pay for ma
tional defense.
Proposals are pending in con-
gress 10 tax incomes of more than
$1,000. 900 as high as 30 percent.
Leaders on all sides agree that out
of the impet1s which the decision
Monday will give such proposals. is
likely 10 become a definite move
ment 20 levy on the revenues from
great private fortunes for some Of
the millions that government must
raise to carry out the army and
navy increases.
secs s1OO,OOO,OOO More revenue.
The supreme courts decision has
absolutely unfettered the income
tax as a source of revenue" said
Rep. Hull of Tennessee, author of
the law. "All doubt is removed and
congress is left much freer TO act.
! believe congress will take advant-
age of the opportunity TO amend the
law materially. Without any un-
usual or unjust charges it can be
made to yield $1S5, 100000 TO $685.
60O. geo a year, as against SIS. 0O0.-
600 or S9O,OOO.OO0 at present"
Rep. Hull is preparing amend
ments to- carry the tax TO incomes
below $4,000 and make graded in
creases in the surtaxes on incomes
exceeding $4,000 a year
So far the problem of raising the
revenue for national defense. al
though approached from many
angles. has not been carried toward
any definite solution. because with
the constitutioaality of the income
tax undecided. administration lead
eTs were reluctant To place too
much dependence on it.
In its decision the supreme court
construed for the FIRST time the 9Th
amendment to the constitution. un-
AANA ~ AlANAA tire TN II lFNAthH anu save
it the broadest Interpretation pos
sible, rejecting suggestions 10 con-
fine its scope TO narrow limits.
Decision Unanimous.
The decision was announced by
Chief Justice White and was unani-
nous. 1t was rendered in the ap-
peal of Frank r. Brushaber. from
the action Of the New York federal
court is refusing TO enjoin the
Southern Pacific. of which Brush
aber was stakeholder from paying
the tax. The case raised substan-
tally every point involved in all the
five income tax cases before the
court. with the exception of the eff
feet of the provision allowing min
ing corporations TO make a five per-
cent deduction annually from gross
income for depletion Of mines. This
provision is regarded as being an
amendment TO the old corporation
tax rather than a feature of the in
come tax.
Source Not Considered.
The basic error of those who at
tackled the cOnstitutionality of the
TAX. GnleI Justice W mite nelO. was
in REGARDING the 10th amendment
as empowering the United States to
levy a direct tax without appOrtiOn-
ment among the states according to
population. In substance the court
held that the 10th amendment had
not empowered the federal govern
ment 10 levy new tax. but that
"the whole purpose of the amend
ment was TO relieve all income
taxes from consideration of the
source whence the income was de-
rived"
Those opposing the tax had urg-
ed that the 10th amendment pro-
vided that income from whatever
source derived" should be taxed
without regard TO apportionment
among the states. They argued that
the Underwood SimmOns income
tax provision, by reason of exemp-
tions of certain incomes from taxa
ton. had not come within the
meaning of the amendment