Milford chronicle., 1938-08-12
p. w. GREEN WARNS
STATE RIGHTS In PERIL
toontlnasd irom - Passl

is set forth In the tenth amendment
to the federal Constitution which
provides, The powers not delegated
to the United States by the Consti-
tuition. nor prohibited by II to the
states. are reserved to the states. re-
spectiyely. or to the people,"
Says State Salaries Taxable
Mr.. Green pointed out, as a pres
ent practical illustration. the federal
government is now trying to colles
a tax Of $4,000 against the Delaware
River Joint Commission for federal
stamp taxes on the issuance Of their
outstanding bonds.
Mr.. Green said the salaries Of all
state, county, and municipal officials
and employees. including the gov
ernor, judges, school teachers of the
state, police officers. ETC.. are liable
for a tax on their salaries, received
for a period Of three years past If
they filed income tax reports and
IL years past If they failed to file
the reports. under the Department
of Justice decision.
The report was made by the De-
partment Of Justice following a de-
cision in the New York Port Au-
thority case.
"The effect of the Department Of
Justice report would make taxable
all bonds issued by the state. county
and city" Mr.. Green continued.
This is causing great concern to
the states. Heretofore. more than
100 years following the opinion in
the case of Mccullough vs.. Mary
land, it always has been held the
states could not tax securities OF
the federal government and the fed
eral government could not tax Sc
curities issued by the states or their
political subdivisions.
Would Require Higher Rate
Estates heretofore have been able
to issue bonds at low rate Of in
terest because they we're not tax
able. It means that If bonds hereto
fore put out by the states or their
poIitical subdivisions are taxable by
the federal government. they cannot
be issued at as low a rate of inter-
est. The citizens Of every state will
be compelled to bear the burden or
difference in increased taxation.
Immunity from federal taxation
heretofore has not been for the sake
of the bondholder, but It has been
because of the sovereign character
of the individual states arising out
of their right to exist as sovereign
states, which includes the privilege
Of borrowing money.
therefore. II state bond issues
can be taxed, their sovereign rights
on the. responsibility have been de-
stroyed. For this reason the states
propose lighting the proposed action
Of the federal government to tax
their securities"
State Defense Meeting
Mr.. Green pointed out that at
meeting of the Council on State De-
tense held in Cleveland recently.
Of "a states attend
ID and attorneys general Of two
other states telegraphed their as
,urances of cooperation.
The National Association Of Attor-
leys General also adopted resolu-
ion at the same time denying the
,onstitutionality of any attempt by
he federal government to tax the
-evenues of the states, or the exer-
csc of their fiscal powers, without
he consent of the states first OBJ
aimed through constitutional pro-
,ess, Mr.. Green stated.
! The association further endorsed
he program and detectives Of the
Conference on State Defense in its
ampaign to place these issues be-
ore the people of the states and
heir representatives
The resolution, Mr.. Green, who at
ended the meeting, said, provided
hat It is the sense Of the associa-
ion that such a federal attack
,ould place the states in the status
Z counties or provinces of a central
and would in effect de-
troy the form Of state and local
overnment, and of dual sovereignty.
nder which the people Of the Unit
States have lived and prospered
Dr. over a century and half"
The association felt 1t was the
uty of the attorney general Of each
tate to protect the sovereign rights
I the state. Mr.. Green concluded.