The daily banner. (Cambridge, Md.) 1897-2008, 1916-01-25
INCOME TAX
LAW UPHELD
Supreme Court Declares Act
Constitutional.
SOUND ON EVERY POINT
Sweeping Decision Handed Down by
Chief Justice Sustains Governments
Interpretation of Measure.

Washington, Jan 25.-The supreme
court upheld the income tax law, in
a decision given by Chiel Justice
White, which swept 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
company from paying the tax ON the
ground that it was unconst tutionai
Most of Justice Whites opinion was
directed toward overrruling the coli
tention t.at the income tax amend.
ment provided hitherto unknown
power of taxation. Going far into
the history of the income tax legisla.
ton, the chief justice concluded the
argument was without merit. Advanc-
ing to other points, the chief justice
held that the tax was not unconstitu-
tional because it was retroactive.
The argument that the law was I'M
constitutional because labor, agricul.
tural and horticultural and such or
CARNATIONS were exempt, the chief
Justice held, was answered by decis-
ions under the corporation tax law.
He said the point was only another
illustration of an erroneous assump-
ton that the tax was imposed under a
new power conferred upon the govern
ment by the sixteenth amendment,
whereas it was a power recognized to
exist from the beginning of the gov.
eminent, and thus decisions defining
the taxing power previously rendered
were applicable to it.
Then grouping a 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.
Because it levies .one tax on in
comes of individuals up to $4,000 and
a higher rate on incomes above that
amount, allows greater exemption
for married persons 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
oo,,nop opd rooictorod bonds ara rn.
lieved of labor and expense involved
in deducting and paying the taxes OF
individuals on the income derive
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 to 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
lions.
Because individuals are allowed to
deduct from gross income dividend
paid them by corporations, but cor
porations are not allowed to make
such deductions.
Because individuals whose income is
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 deductions 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 est
mate the rental value in making W
their incomes, while those who live
in rented houses aid pay rent are not
allowed in making up their taxable
income to deduct rent.
"In this situation it is superhuous
to say" the opinion read, that argu
ments as to the expediency of levying
such taxes or of the economic mistake
or wrong involved in their imposition
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