The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1916-01-27
income TAX HE'LL
VALID BY HIGHEST
NATIONAL TRIBUNAL
Supreme Court Uphoids Con-
sthtioRaiity 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.
ENDS FIFTY YEAR FIGHT

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 III
whole or in part.
Chief Justice White announced the
decision in the case of Frank r..
frushaber, stakeholder of the Union
racine aiToa who sought to enjoin
the company from paying the tax, on
the ground that it was unconstitution-
al.
Most of Justice Whites opinion was
directed toward oyerruling the con-
tention that the income tax amendment
provided a hitherto unknown power of
taxation Going far into the history
or o 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 not re-
troactive.
Argument Knocked Out.
The argument that the law was un-
constitutional, because labor. agri-
cultural and horticultural organizations
ana such were exempt, the chief justice
held, vas 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 u
power recognized to exist from the be-
ginning of the government and thu
decisions defining the taxing power
previously rendered were applicable to
1t.
Then, grouping a number of other
contentious against the avail based
on the clause of the constitution re-
during uniformity in taxation-Chief-
Justice White pronounced them all
lacking In merit, because of previous
decisions. which determined that the
clause exacted only q geographical mi
for1nity.
Contentions Held MeritIess.
n group included the contentious
that the tax acked uniformity because
it:
Levies one tax on incomes of indi-
viduats up ID $4,000 and Il 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 it 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
x for persons not required. be-
aus of exemptions, to pay:
Because bondholders, during the in
terval between the deducting and the
paying of the tax on heir 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;
OF ia amount of the in
terest on indebtedness to be deducted
from gross income Of certain corpora
lions,
Because individuals are allowed to
deduct from gross income dividends
paid them by corporations, but cor
porations are not allowed to make
such deductions.
individuals, whose income is
less h 100000 are allowed to deduct
$4,000 OF $4,000; but receiving more
than 100000 are not allowed to make
Slc1 ueutCIiOH Il sSeCCIlu llIne NIOT Inc
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.
xiv separate suits to test the con-
s~titutionality of the new income tax
were brought in the FEDERAL courts
throughout the country after the law
became effective. and all found their
way to the supreme court of the Uni
ted States soon after.
For nearly so years the fight for, a..d
f, against. a federal income tax has been
somewhere in the courts.
The income tax, imposed during the
civil war II the years Immediately
following. was not attacked with the
seriousness of later cases. 1t was not
until the Cleveland administration
placed an income tax in the Wilson tar
if act that the fight became serious.
The contest orer the validity of the
tax in 1894 and 1895 before the su-
preI1e court was n Of the most Bit
ter ever fought out before that court.
One OF the lawyers. James C. Carter,
warned the court against setting III its
Judgment to thwart the win of G0,0G0.-
Geo people. joseph II. Choate, oppos-
ing, called upon tie court to exercise
it9 Judicial power regardless of any
popular or poruiistie propaganda.
Earlier Decisions.
IN agitation for :tn amendment &c
the constitution then began. 1T cam
to nothing until President Taft recon
r.cnGed the enactment Of an excise taS
on corporations to be measured b.
their income and an amendment was
submitted to the states at nee un6
Nas yroc'ainl ID as the 18th amendment
10 the constitution OF March ]. 1912.
II provided:
'"rha consve5s shall have power tt
lay and collect y on incorles froE,
whatever source derived without APP.
portionmen. among the several states
aud without regard 10 any cenans -
snumerat;c'."