The daily banner. (Cambridge, Md.) 1897-2008, 1916-01-25
INCOME TAX DECLARED
| CONSTITUTIONAL
Way Opened to Increase Rate on
Large Fortunes to Aid in Paying
For National Defense.

Washington, Jan. 24.-The income
tax was declared constitutional today
by the Supreme Court in unani-
nous decision which swept aside ev-
cry contention raised against it and,
in the opinion of Congressional lead
ers, 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 5 $1,000
200 as high as so per cent. Leaders
on all sides agree that out of the i'm
petus which the decision today will
give such proposals is likely to come
definite movement to levy on the
revenues from great private fortunes
for some of the millions the govern
ment mrst raise to carry ous the Ar
my and Navy increases.
THE Supreme Courts decision has
absolutely unfettered the income tax
as 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. l believe Congress will take adj
vantage of the opportunity to amend
the law materially. Without any I'M
usual or unjust charges it can be
made to yield $1S5, 100000 to $685.
100000 year, as against SS5,O0O,-
1000 or $9O,000,000 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 year.
So far the problem of raising the
revenue for national defense, al
though approached from many ang
les, has not been carried to any def
mite solution, because with the con-
stitutionality of the income tax I'M
decided, administration leaders were
reluctant to place too much depend
ance on it.
In it's decision the Supreme Court
construed for the first time the Six
teenth Amendment to the Constitu
ton, under which the tax is levied
and gave it the broadest interpreted
ton possible, rejecting suggestions to
confine its scope to narrow limits.
The decision was announced by
Chief Justice White and was unani-
nous. 1t was rendered in the appeal
of Frank r. Brushaber from the ac-
ton of the New York Federal Court
in refusing to enjoin the Southern
Pacific, of 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 provi-
sion allowing mining corporations to
make per cent. deduction annual
ly from gross income for depletion of
mines. This provision is regarded. as
being an amendment to the old cor
poration tax rather than feature or
the income tax.
The basic error of those who at
tackled the constitutionality of the
tax, Chief Justice White held, was
in regarding the sixteenth amend
ment as empowering the United
States to levy direct tax without
apportionment among the States, &C
cording to population. In substance,
the court held that the Sixteenth
Amendment had not empowered the
federal government to levy a new
tax, but that 1.-The whole purpose of
the amendment was to relieve all in
come taxes from a consideration of
the source whence the income was
derived"