The Tabor independent. [volume] (Tabor, S.D.) 1913-19??, 1916-01-27
Supreme Court UphoIdS Con-
StitutiOnaIity of the Federal
Law Taxing Swollen
Fortunes.
ENDS FIFTY YEAR FIGHT
Five Suits Have Been Pending
to Test Legality of Law
Made Feature of Last
Tariff Act.

Washington. Jan. 25.-The supreme
court today upheld the constitutional
ity of the income tax law.
Chief Justice White gave the courts
decision sweeping aside all the many
objections to It's constitutionality in
whole or in part.
Chief Justice White announced the
decision in the case OF Frank r.
Brushaber, stakeholder of the Union
Pacific railroad, who sought to enjoin
the company from paying the tax. on
the ground that 1t was unconstitution-
al.
Most of Justice Whites opinion was
directed toward overruling the con-
tention that the income tax amendment
provided hitherto unknown power OF
taxation. Going far into the history
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 I'M
constitutional because it was not re-
troactive.
Argument Knocked Out
The argument that the law was I'M
constitutional, because labor, agri-
cultural and horticultural organizations
and such were exempt, the chief justice
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 con-
ferred upon the government by the
10th amendment, whereas it was
power recognized to exist from the be-
ginning Of the government and thus
decisions defining the taxing power
previously rendered were applicable 10
II.
Then, grouping a number of other
contentious against the laval based
on the clause of the constitution re-
qutring uniformity in taxation-Chief-
Justice White pronounced them all
lacking in merit, because of previous
decisions, which determined that the
clause exacted only a geographical uni
formity.
Contentious Held Meritless.
The group included the contentious
that the tax lacked uniformity because
1t:
Levies one tax on incomes of indi-
viduals up TO $4,000 and a higher rate
on incomes above that amount, allows
a greater exemption for married per-
sons 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 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, be-
cause of exemptions, tc pay;
hn 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 pay
ment of taxes on bonds;
Because OF the amount of the in
terest 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 cor
poratiOnS are not allowed to make
such deductions.
Because individuals, whose income is
less than $50, are allowed to deduct
$4,000 or $4,000; but receiving more
than 100000 are not allowed to make
such deduction a 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 compelled to estimate the
rental value in making up their in
comes, while those living in rented
houses and paying rent are not allowed
in making up their taxable income to
deduct rent.
Five separate suits to test the CON
stitutionality of the new income tnN
were brought in the federal CuGrts
throughout the country after tie law
became effective, and all I'D their
way to the supreme court OF the Uni
ted States soon after.
For nearly so years the fight for, and
against, federal income tax has beer
somewhere in the courts.
The income tax, imposed during the
civil war and the years Immediately
following, was not attacked with the
seriousness of later cases. It was moi
until the Cleveland administration
! placed an income tax in the Wilson tar
If act that the fight became serious.
The contest over the validity of thu
preme court was one of the most bit
ter ever fought out before that court
One of the lawyers James c. Carter
warned the court against setting up 1t!
judgment to thwart the will of 10000.
900 people. Joseph H. Choate. oppos
ing, called upon the court to exercis,
it's judicial power regardless Of an!
popular or populistic propaganda
Earlier Decisions.
An agitation for an amendment t,
The constitution then began. 1t cam
to nothing until President Taft recon
mended the enactment of an excise tai
on corporations to be measured b,
their income and an amendment wa
submitted to the states at once AM
was proclaim ID as the 18th amendmen
10 the constitution on March l, 1912.
1t provided
THE congress shall have power t
lay and collect taxes on incomes from
whatever source derived without ap
portionment among the several state
and without regard to any census