Evening star., 1939-03-27

either State or the National Gov
ernment or OF its instrumentalities.
Important in District.
IN no case is there basis for
the assumption that any such tangi-
Bile or certain economic burden is
imposed on the government con-
cerned as would Justify a courts
declaring that the taxpayer is
clothed with the implied constitu-
tional tax immunity of the govern
ment by which he is employed"
The decision will be studied with
interest in the District of Columbia,
where the question of a local income
tax has been complicated by some
doubt as to the constitutionality of
tax on Federal employees who. in
the States, have hitherto been
held exempt from local income
taxes.
The decision is of great import
ance to Maryland and Virginia be-
cause of the number of Federal
employees who are resident in those
States, though employed in the
District.
The opinion of the court which
reversed 69-year-old decision, was
delivered by Justice Stone and was
on 6-to-2 vote, with Justices Butler
and McReynolds dissenting. It was
announced that Chief Justice
Hughes, who has been i'll, was in
accord with the majority. Justice
Frankfurther wrote separate
opinion concurring.
The House has passed bill asked
by President Roosevelt that would
permit Federal and State gov
ernments to tax the salaries of EN-
ployes of each other In the Senate
the legislation is still pending.
Utah Case Remanded.
The major principle overruled by
the court today was laid down in a
case in which Massachusetts judge
was subjected to an income tax on
his salary under Civil War stat
ute. The Supreme Court held that
the collection was illegal
The case came up from the New
York Court of Appeals, which had
held that the State could not tax
the salary of James B. OKeefe, an
employe of the Home Owners Loan
Corp. The State Tax Commission
appealed the decision.
The court was confronted with a
similar case from the State of Utah,
where it had been held that the
salary of an employe of the Re-
construction Finance Corp. was not
subject to taxation. Because GER
tain questions disposed of by the
Supreme Court today had not been
given consideration by the Utah
court, that case was remanded Back
for further proceedings. Chief
Justice Hughes took no part in the
consideration of this case, in which
the opinion was read by Justice
Black.
In the dissent. Justice Butler said
that he and Justice McReynolos
are of the opinion that the H. o. l..
c., as it is an instrumentality of
the United States. heretofore DEEM
ed immune from state taxation,
1T necessarily results that fixed
salaries are the compensation paid
to its officers and employees as such
are likewise immune
From the courts decision, it added,
overruling previous opinion, lit ap-
pears that the United States has al
ways had power to tax salaries Of
State officers and employees and that
similarly free have been the States
to tax the salaries of officers and
employees of the United States. The
compensation for past as we'll as
future service to be taxed and the
rates prescribed in the exertion Of
the newly disclosed power depends
on legislative discretion not subject
to judicial revision
Immunity Claim Studied.
Futile indeed are the vague inti-
nations that this court may protect
against excessive or destructive tax
ation,' it said. Where the power
to tax exists, legislators may exert
it to destroy, to discourage, to pro-
Cect, or exclusively Tor the purpose
of raising revenue.
appraisal of lurking or apparent
implications of the courts opinion
can serve no useful end, for, should
occasion arise, they may be ignored
or given direction differing from
that at first seemingly intended. But
safely it may be said that presently
marked for destruction is the doc
trine of reciprocal immunity that by
recent decisions here has been so
much impaired"
In his separate opinion, Justice
Frankfurter said that for 120 years
the Supreme Court has been
concerned with the claims of i'm
munity from taxes imposed by one
authority in the dual system of