The Birmingham age-herald., 1916-01-25
All Objections as to COnsti- tutiOnality of Law Is Swept Aside by Action of the Court
DECISION AIMED AT
 STOCKHOLDERS WHO
 ENDOWED COMPANY
Error in Contention That Income Tax Amendment
 Proved a Hitherto Un- known Power of Taxation

Washington, January 24.-The in come tax was declared constitutional today by the supreme court in unani- mous decision which swept aside every contention raised against it, and in the opinion of congressional leaders opened the way for increasing the tax rate on great fortunes to help pay for national defense.
 Proposals are pending in Congress to tax incomes of more than $1,OOO, ,O00 as high as 50 per cent. Leaders on all sides agree that out of the impetus which the decision today will give such proposals is likely to come a defi- mite movement to levy on the revenues from great private fortunes for some of the millions the government must raise to carry out the army and navy increases.
 "The supreme courts decision has absolutely unfettered the income tax as a source of revenue" said Repre- sentative 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 unusual or unjust charges it can be made to yield s1S5,oOO,0OO to $195,O00, 900 year, as against sS5,000.O00 or S9O,0O0,OOO at | present"
 WILL TAKE ADVANTAGE ! Representative Hull is preparing amendments to carry the tax to in- comes below 5000 and make graded | increases in the surtaxes on incomes exceeding s2O,000 a year.
 4 So far the problem of raising the revenue for national defense, although approached from many angles, has not l, been carried toward any definite so lution because, with the constitution ality of the income tax undecided, ad- ministration leaders were reluctant to place too much dependence on it. In its decision the supreme court construed for the first time the six teenth amendment to the constitution, under which the tax is levied, and gave it the broadest interpretation pos sible, rejecting suggestions to confine ]. its scope to narrow limits.
 The decision was announced by Chief Justice White It was rendered i. in the appeal of Frank R. Brushaber ] from the action of the New York fed ! eral court in refusing to enjoin the < Southern Pacific, of which Brushaber was a stockholder, from paying the . tax. The case raised substantially ev- cry point involved in all the five in- ( come tax cases before the court with the exception of the effect of the pro- vision allowing mining corporations to make a 5 per cent deduction annually ] from gross income for depletion of | mines This provision is regarded as ! being an amendment to the old cor poration tax rather than a feature of | the income tax.
 THE BASIC ERROR The basic error of those who at ] tackled the constitutionality of the tax, Chief Justice White said, was in re- | garding the sixteenth amendment as 2 empowering the United States to levy < Ia direct tax without apportionment [ among the states according to popu- Alation In substance, the court held that the sixteenth amendment had not em- powered the federal government to k1evy a new tax, but that "the whole | Fphrpose of the amendment was to re- h hlieve all income taxes from consid- Iteration of the source whence the in- scome was derived.
 I Those opposing the tax had urged tthat the sixteenth amendment provided pthat income from "whatever source de- hriyed' should be taxed without regard Gto apportionment among states. They targued that the Underwood Simmons Eincome tax provision by reason of ex- Exemptions of certain incomes from tax ation had not come within the mean ing of the amendment.
 Chief Justice White said the power of the federal government to levy an income tax had never been questioned HQuoting at length from the famous in come tax decisions of 1895, he declared
 the court then recognized the fact "that taxation on income was in the nature of an excise entitled to be en- forced as such unless and until it was concluded that to enforce it would
 amount to accomplishing the result which the requirement as to appor- tionment of direct taxation was adopt ed to prevent, in which case the duty
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