Evening journal., 1919-10-18


pl0yed in its broadest sense. and COM
prehends everything. or class OF SUD
iects, 10 which the legislative power eX-
tends
The constitution makers. doubtless
recognizing this inherent power OF the
legislature TO tax anything. did not un-
derlake to grant the power Of taxation.
or sayNNhat might be taxed. but merely
provided that the tax imposed on any
class OF subjects should be uniform. and
that The legislature might exempt such
! property as In rs opinion would
best promote the public welfare BY
"such property msnifestly was meant
anything that was taxable under the in
herent power OF the Legislature. All
, that the Constitution makers had In
mind respecting tlXatlon was uniform-
I lly and the public welfare. Everything
else was left 90 the discretion OF the
{ Legislature Instead OF limiting by i'm
plicatlon the things that might be faxed
we think the word property might be
construed as 10 be consistent with the
I inherent power Of the legislature In the
matter ~ taxation there being no re-
striction or inhibition in the Consiitu-
tion upon its power IN that regard
But while this is true. we prefer 10
take the natural, logical and reasonable
position that income is property. with
in the meaning Of that word as used in
I the exemption clause Of section 4. arii-
Gle s. OF the Delaware Constitution And
we are inclined 70 believe that no court
In this country today. in constituting a
constitutional provision similar 90 ours.
would maintain the contrary position.
j. the Income Tax Law unconstilu-
i'onal because OF lack OF uniformity. as
claimed by the defendant in his second
point?
He contends that the statute IS not
uniform upon the same class OF sub
iects within the territorial limits Of the
authority levying the tax. because sal
aries Of State officials. rentals from real
estate. income derived from agricultural
operations and incomes that DO not eX-
ceeed one thousand dollars are exempt
from its operation. 10 Is admitted that
all other exemptions are reasonable and
valid.
The argument or the defendant Is
based primarily on the assumption that
by the exemptions OF which he com
plains, certain classes " citizens are
exempt as individuals from taxation.
namely. 0illcehOlders. land owners and
farmers or persons engaged in agri-
cultural pursuits. such assumption is
manifesiiy incorrect and misleading.
The purpose and effect Of the law is.
not 60 exempt such persons, but their
income derived from certain sources.
and clearly specified. All incomes they
may receive from other sources is tax
able under the law.
50 that the question before the court
Is not whether the Legislature can
exempt certain classes OF citizens from
taxation. as individuals. but whether
the income they may receive from Ger
tain sources may be exempt.
Before considering each OF these OK
emptions separately, 10 may De said gen
orally that the question also is, not
whether such exemptions in fact basl
promote the public welfare. but wheth-
or they Id 50 in the opinion of the
General Assembly, And the only quail
Hcaiion the law alliXes 90 the opinion
and act Of the General Assembly is
this: It must be reasonable and not ar
bitrary.
Under the law the Legislature IS
given much latitude IN determining
what kinds Of property should be eX-
empt from taxation. as best promoting,
/ in their opinion, the public welfare.
With sucli rules for our guidance. We
complained OF: a1 Salaries of state
Officers. The General Assembly could
lave had but one reason for such OK
empton. and that was the belief that
the taxing OF such income would make
The act unconstitutional And. without
deciding whether such would have been
the effect or not. It is sufficient 10 sag
that the belief which influenced the
legislature was a reasonable one. To
view Of the fact that our Constitution
prevents the diminishing OF the salary
0f a State officer during his term of
office. and Of the further fact that Con-
gress madt the same exemption in the
Federal Income Tax Law. because .Of
the belief that otherwise the act would
Ee declared 'unconstitit onal. 70 WIS
natural and proper that our Legisl3-
turc should make the exemption -
question.
70 will be observed that the act does
not exempt salaries receivct aver ih3
terms Of office which began before thc'
enactment Of the law
,b) Rentals Of real estate Manifest
Is. The reason for this exemption was
the belief Of the General Assembly that
the burden Of taxation had not been
fair. and that real estate had borne too
great a proportion OF such burden. In
order 90 equalize the load as much as
possible in a tax law. 10 was provided
that the new tax created, The iic0me
TAX. should not affect rentals OF real
estate. but should AFFECT such sources
Of income as previously had not been
taxed, or had not been taxed as heavily
as real estate.
(c) Gains or profits derived from ag
rcultural operations This exemption
is closely related TO the one just con-
sdered, and the same reasoning applies.
70 Is true that IL relieves the tenant. as
we'll as the landowner, from the pay
ment' Of any tax on The profits derived
from use Of the land. and while he IS
not required to pay a tax on real es-
tate, he is required 10 pay a tax on
his other taxable personal property
But evidently the theory and the fact
upon which the Legislature acted was.
lh6t II the tenant had TO pay a tax
upon his profits derived from operat-
ing the farm. he would be en-
titled to lower rental, and 90
THE extent the rental was de-
creased, the return OF the landowner
would be diminished. In other words
the owner would Indirectly have to