Middletown transcript., 1916-01-29
THE INCOME TAX
Law IS UPHELD
Supreme Court Decision Opens
Way for Increase.
ALL DOUBT SWEPT ASIDE
Proposals Pending In Congress To Tax
Incomes Of More Than a Mil
lion AS High AS Fifty
Per Cent.

WashingtOn.-The income tax was
declared constitutional by the Supreme
Court in unanimous decision which
swept aside every contention raised
against it and, in the opinion of Con
gressional leaders, opened the way fol
increasing the tax rate on great for
tunes to help pay for national de
| tense.
Proposals are pending in Congress
to tax incomes of more than $1,000,00O
as high as so per cent. Leaders on all
sides agree that out of the impetus
which the decision will give such pro-
posals is likely to come definite
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.
Now Free To Increase 1t.
"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 advantage
of the opportunity to amend the law
materially. Without any unusual or
unjust charges it can be made to yield
$185, 900, 900 to $195,000,OOO year, as
against s85,OOO,OOO or $90,OOO,OOO at
present"
Representative Hull is preparing
amendments to carry the tax to in
comes below $4,000 and make graded
increases in the surtaxes on incomes
exceeding $4,000 a year.
So far the problem of raising the
revenue for national defense, although
approached from many angles, has not
been carried to any definite solution,
because with the constitutionality of
the income tax undecided, administra-
ton leaders were reluctant to place
too much dependence on it.
In it's 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 possible,
rejecting suggestions to continue its
scope to narrow limits.
Sweeping Decision.
The decision was announced by
Chief Justice White and was unani-
nous. 1t was rendered in the appeal
of Frank R. Brushaber from the action
of the New York Federal Court in re-
fusing to enjoin the Southern Pacific,
OIL which Brushaber is a stockholder,
from paying the tax. The case raised
substantially every point involved in
all the five income tax cases before |
the court; with the exception of the
effect of the provision allowing mining
corporations to make a per cent. de- |
duction annually from gross income for
depletion of mines. This provision is
regarded as being an amendment to |
the old corporation tax rather than a |
feature of the income tax.
The basic error of those who attack
ed the constitutionality of the tax, |
Chief Justice White held, was in re-
garding the sixteenth amendment as |
the United States to levy |
a direct tax without apportionment |
among the states, according to popula-
ton In substance, the court held that
the Sixteenth Amendment had not en-
powered the Federal Government to
levy new tax, but that 1.-The whole
purpose of the amendment was to re-
lieve all income taxes from a con-
of the source whence the
income was derived"