Evening star., 1939-01-28
Opposes Plan for
Reciprocal Taxation,
To the Editor of The Star.

To the Editor of The Star:
The President in his recent message to
Congress asked enactment of law au-
thorizing reciprocal taxation OF the sal
aries of State and Federal employees. and
the securities of each, insteSd of<Abmit-
ting the question 20 the people in an
amendment to tbs Constitution. In sup
port of his request he cites the recent
decision of the Supreme Court in the
case of Helvering VS.. Gerhardt, commonly
referred to as the Port Authority of New
York case. 1t is evident that whoever
called his attention to this case gave it
little if any study because it is absolutely
against the Presidents proposal. In that
case the court clearly held that if the
Port Authority of New York employees
were employees of the State their salaries
could not be subjected to Federal tax, but
that in view of the fact that the authority
was set up by an interstate compact
with New Jersey, which required ap-
proval of Congress it was creature of
the Federal Government, and not an
agency of the State, and that the salaries
of these employees were liable for Federal
income tax.
adoption of the Constitution the court
has uniformly held that the States could
not tax the agencies or instrumentalities
of the Federal Government, and vice
versa. One of the best reasoned and un-
answerable opinions of the court on this
question is in the case of Burlington VS..
Day, II, Wall. 1l3, which involved the at
tempted taxation by the Federal Gov
ernment of the salary of State Judge.
The court said, among many other in
tereStlng things, that: But, in any ar
ticles of the Constitution, the necessary
existence of the States, and within their
proper spheres, the independent authority
Of the States are distinctly recognized.
To them nearly the whole charge of in
ternal regulation is committed or left; to
them and to the people, all powers, not
expressly delegated to the National Gov
eminent, are reserved. Upon looking into
the Constitution it will be found that but
could be carried into practical effect
without the existence of the States. Such
being the separate and independent con-
dition of the States in our complex sys-
tenn, as recognized in the Constitution,
and the existence of which is indis-
pensable, that, without them, the general
government itself would disappear from
the family of nations 1t would seem to
follow, as reasonable, If not necessary
consequence, that the means and instru-
mentalities employed for carrying on the
operations Of the governments for pre-
serving their existence, and fulfilling the
high and responsible duties assigned to
them in the Constitution, should be left
free and unimpaired, should not be liable
to be crippled, much less defeated by the
taxing power of another government,
which power acknowledges no limits but
the will Of the legislative body imposing
the tax Speaking Of the reciprocal ex-
emption of each government from taxa
ton by the other the court said: I'm
both cases the exemption rests upon nee
essary implication, and is upheld by the
great law Of preservation; as any
government, whose means employed in
conducting Its operations, If subject to
the control of another and distinct gov
ernment, can exist only at the mercy Of
that government. OF what avail are these