New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-01-25
Decision Opens Way TO
Make the Rich Pay
for Defence.
DEMOCRATS RID
OF TARIFF PERIL
Majority Now Free to Cover
Deficit Without Making
Voters Hostile.

Prom TIE Trihune bureau
Washington. Jan. 2i.-Thc incom,
tax WAS to-day declared constitutions
by the Supreme Court, and the Demo
cratic leaders In Congress hailed ;h'
decision as assuring means Of raising
the money that viii he demanded by th'
tariff deficit and the preparedness plans
without arousing very many voters
against the party. A heavy increase OF
the surfaces on incomes above $4,000
and a lowering Of the exemptions, the
leaders declared, will produce the
money.
Representative Hull. of Iowa, who
has been one Of the leading advocates
Of the income tax. declared Eve are
now free to 90 ahead and raise revenue
in the best possible way" and his opin-
ion was echoed all around the cor
ridors Of the Capitol.
The providing Of cash for the needs
most serious problems the administra-
tion has had 10 face, and the relief
which followed the courts action WAS
great The Democrats are facing a
very heavy deficit from the failure OF
the Underwood tariff law. and the bal
ance in the Treasury has been stead .y
declining ever since the administration
took Office.
New Revenue Needed ANYWAY.
Even without the preparedness pro
Cramme new revenue would be neces-
sary 20 keep the Treasury at even Its
present depleted state. and If the
Presidents preparedness programme
should be adopted the total deficit. dat
ing from the opening Of the admins
tratiOn. would be nearly a quarter Of
q billion. BY revamping the Treasury
statement and permitting the balance
20 fall 10 S5O,000,000, the admin.stra-
tion officials have figured that they
could get through with added revenue
Of Sl3O000,0O0
i is hoped 10 raise S100000000 OF
this from additional income taxes The
tax now produces about S80.O00000 a
year The proposal is 20 increase
surtaxes by from a third 20 q half AM
il possible 20 lower the exemption TO.
married men from $4,000 TO $1,000 and
for bachelors from $4,000 TO $1,000
There is opposition 20 this from mem
bers OF the ranks and file Of the House
but the leaders believe the measure can
be pushed through. There are severa
OF them. including a few on the Repub
lean side Of both houses, who favor
lowering the exemption 20 $1,000 OF
the principle that in "a democracy al
classes should bear some part. even il
only small one, OF the public burden
There is, however, no likelihood Of tn,
adoption Of this plan.
Plan to Make the Rich Pay.
The Democratic plan the leaders
frankly state, Is intended 10 make IN,
rich pay for preparedness, and they
figure that the rich have few votes
Many Of the wealthy men Of the coun
try. indeed have declared themselves
perfectly willing to take on added bur
dens TO insure the safety Of the coun
try and 10 provide the insurance
against war which lies in adequate pre-
paTedness Proposals are pending II
Congress TO tax incomes OF more thar
$1,000 900 as high az 80 per cent.
The plans for other forms of new
taxes viii be showed into the back
ground and are likely 20 be forgotten
altogether. The Democrats have no
reli he'd the prospect Of facing the pco
re next fall and trying 20 explain wh.
they had found u necessary % supple
meut the tariff law by any measure
which would be generally felt. Thi
cXpedient, they believe. viii give then
IL
the lowest cost OF resentment from th
voters.
To-day's decision Of the Suprem
Court was announced by Chief Justic
White, and was unanimous II was rem
Gered in the appeal of Frank r. Brush
haber from the action of the New YOrl
Federal Court in refusing to enjoin tn
Southern Pacific, of which Bruskhabe
was a stakeholder, from paying III
tax.
The case raised substantially ever
point involved in all the FIVE incom
tax cases before the court with Oh
exception Of the effect Of the provision
allowing mining corporations 20 max
per cent deduction annually fror
gross income for depletion of mine.
This provision is regarded rs being al
amendment TO the old corporation Ia
rather than q feature Of the neon
tax.
Justice McReynolds. because Of hi
connection with the case as Attorne
General. took 10 part in the decision
None Of the other income tax case
was disposed Of formally.
Amendment Directed at Source.
The basic error Of those who at
tackled the constitutionality Of the tax
Chief Justice White held, was in re
garding the Sixteenth amendment a,
empowering the United States 90 levy
ii direct tax without apportiOnmen'
among the states according 10 popula
ton In substance. the court held that
the Sixteenth amendment had not en-
powered the Federal government {.
levy a new tax, but that "the whole
purpose Of the amendment was 10 re-
lieve all income taxes from consid-
Grafton of the source whence the in
come was derived"
Those opposing the tax had urged
that the Sixteenth amendment provided
that income from whatever source de
rived" should be taxed without regarc
10 appOrtionment among the states
They argued that the Underwood Sim