Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1916-01-25
INCOME TAX IS
ADJUDGEDLEGAL
Supreme Court of United
States Makes Ruling
on Important Law
JUSTICE WHITE
WRITES DECISION
Chief Of Tribunal Upholds
Constitutionality in a
Sweeping Decision

Washington, D. c., Jan. "a, - The
supreme court today upheld the con-
stitutionality Of the income tax law
Chief Justice White gave the courts
decision, sweeping aside all the many
objections to its constitutionality in
whole or In part.
Chief Justice White announced the
decision In the case of Frank r. Brush
aber, stockholder of the Union Pacific
railroad, who sought to enjoin the CON-
pany from paying the tax on the
ground that it was unconstitutional.
Most of Justice Whites opinion was
directed toward overruling the conten-
tion that the income tax amendment
tax provided hitherto unknown pow
er of taxation. Going far into the hiE-
tory of income tax legislation, the
chief justice concluded the argument
was without merit.
Advancing to other points, the chief
Justice held that the tax was not un-
constitutional because it was retro
active.
The argument that the law was un-
constitutional because labor, agricul-
tural and horticultural organizations
and such were exempt, the chief JUS
tice held, was answered by decisions
under the corporation tax law. He said
the point was only another Illustration
Of an erroneous assumption that the
tax was imposed under a new power
conferred on the government by the
sixteenth amendment, whereas, 1t was
power recognized to exist from the
Jeginning OF the government and thus
decisions defining taxing powers pre-.
vionsly rendered were applicable to 1t.
Then, grouping number of. other
contentious against the law, all based
on the clause Of the constitution re-
quiring uniformity in taxation, Chief
Justice White pronounced, them all
lacking in merit, because Of previous
decisions which determined that the
clause exacted only geographical
uniformity.
The group included the contentious
that the tax lacked uniformity be-
cause it:
Levies one tax on incomes Of in
dividuals up to $4,000, and q higher
rate on incomes above that amount;
allows a greater exemption for mar
ried persons than single ones, and
bases the tax on wealth alone:
Because 1t requires corporations, at
great expense, to perform the govern
ment's work, without compensation. of
collecting at the source;
Because corporations indebted upon
coupon and registered bonds are re-
lieved Of labor and expense involved
in deducting and paying the taxes of
individuals on the income derived
from bonds;
Because corporations required to
pay at the source would often pay
taxes for persons not required because
Of exemptions to pay;
Because bondholders. during the in
terval between the deducting and the
paying Of the tax on their bonds, are
deprived of the use of their money
withheld;
Because bondholders of corporations
which fail before they pay the tax
would be required to pay the tax al
though the corporation had deducted
the tax from the amount due the bond
holders.
Because Of double payment Of taxes
where corporations assume the :'ay-
ment Of taxes on bonds;
Becalse Of the amount of the inter
est on Indebtedness to be deducted
from gross income of certain corpora
tions;
Because individuals are allowed to
deduct from gross income dividends
paid them by corporations, but corpor-
atoms are not allowed to make such
deductions;
Because individuals whose income
IL less than $4,000 are allowed to de-
duct $4,000 or $4,000, but those receiv-
Ing more than $4,000 are not allowed
to make such deduction second time
for the additional tax;
Because greater deductions are al
lowed man and wife living together
than those living separately;
Because owners of houses in which
they live are not compelled to esti
mate the rental value in making up
their incomes, while those living In
rented houses and pay rent are not
allowed, in making up their taxable
Income, to deduct rent.
MARS IS ENJOYING