Source: https://supreme.justia.com/cases/federal/us/74/433/
Timestamp: 2019-04-22 06:09:10+00:00

Document:
added to his return when made in coined money, and that he shall pay the tax or duty upon the amount thus increased.
2. The income tax or duties laid by §§ 105 and 120 of the Act of June 30, 1864, and the amendment thereto of July 13, 1866, upon the amounts insured, renewed, or continued by insurance companies upon the gross amounts of premiums received, and assessments made by them, and also upon dividends, undistributed sums, and income, is not "a direct tax," but a duty or excise.
"Direct taxes shall be apportioned among the several states which may be included within the Union, according to their respective numbers."
thereon, and to add thereto the amount of penalties imposed by law in cases of such neglect or refusal. And whenever the rates and amounts contained in the returns or lists as aforesaid, shall be stated in coined money, it shall be the duty of each assessor receiving the same, to reduce such rates and amounts to their equivalent in legal tender currency, according to the value of such coined money in said currency, for the time covered by said returns. And the lists required by law to be furnished to collectors by assessors shall in all cases contain the several amounts of taxes or duties assessed, estimated or valued in legal tender currency only."
"Such notes shall be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States (except duties on imports), and of all claims and demands against the United States, of every kind whatsoever (except for interest on bonds and notes, which shall be paid in coin), and shall also be lawful money and a legal tender in payment of all debts public and private, within the United States (except duties on imports and interest as aforesaid). And such United States notes shall be received the same as coin at their par value, in payment of any loans that may be hereafter sold or negotiated by the Secretary of the Treasury, and may be reissued from time to time, as the exigencies of the public interests shall require."
"1. Whether that portion of the ninth section of the internal revenue act of July, 1866, above quoted,"
"is to be construed as merely providing a rule as to the currency in which accounts, returns, and lists are to be stated, with a view to uniformity in keeping the accounts of internal revenue, or whether it is to be construed as denying to a person who has received in coined money, incomes or other moneys subject to tax or duty, the right to return the amount thereof in the currency in which it was actually received, and to pay the tax or duty thereon in legal tender currency, and be construed to require that the difference between coined money and legal tender currency shall be added to his return when made in coined money, and that he shall pay the tax or duty upon the amount thus increased?"
"2. (Sixth in the series.) Whether the taxes paid by the plaintiff, and sought to be recovered back in this action, are not direct taxes within the meaning of the Constitution? "
the defendant upon compulsion and under protest. The defendant demurred to the plaintiff's complaint. Upon the argument of the demurrer, the opinions of the judges of the circuit court were opposed upon seven questions, which are set forth in the record. According to the view which we take of the case, it will be sufficient to answer two of them. They cover the entire grounds of the controversy between the parties, and their determination will be conclusive.
"Whether that portion of the ninth (9th) section of the Act of Congress, approved July 13, 1866, entitled 'An act to reduce internal taxation,' and to amend an act, entitled 'An act to provide internal revenue to support the government, to pay interest on the public debt, and for other purposes,' approved June 30, 1864, and acts amendatory thereof, which provides as follows, to-wit:"
" That it shall be the duty of all persons required to make returns or lists of income, and articles or objects charged with an internal tax, to declare in such returns or lists whether the several rates and amounts therein contained, are stated according to their values in legal tender currency, or according to their values in coined money; and in case of neglect or refusal so to declare, to the satisfaction of the assistant assessor receiving such returns or lists, such assistant assessor is hereby required to make returns or lists for such persons neglecting or refusing, as in cases of persons neglecting or refusing to make the returns or lists required by the acts aforesaid, and to assess the duty thereon, and to add thereto the amount of penalties imposed by law in cases of such neglect or refusal. And whenever the rates and amounts contained in the returns or lists as aforesaid, shall be stated in coined money, it shall be the duty of each assessor, receiving the same, to reduce such rates and amounts to their equivalent in legal tender currency, according to the value of such coined money in said currency, for the time covered by said returns. And the lists required by law to be furnished to collectors, by assessors, shall, in all cases, contain the several amounts of taxes or duties assessed, estimated or valued in legal tender currency only"
or whether it is to be construed as denying to a person who has received, in coined money, incomes or other moneys subject to tax or duty, the right to return the amount thereof in the currency in which it was actually received, and to pay the tax or duty thereon in legal tender currency, and be construed to require that the difference between coined money and legal tender currency shall be added to his return, when made in coined money, and that he shall pay the tax or duty upon the amount thus increased."
plainest principles of reason and justice. It cannot be supposed that such was the intention of those who framed the law. Certainly nothing in its language would warrant the construction contended for.
To this question it must be answered, that the statute did deny to the plaintiff the right to have the assessment made otherwise than as it was made by the assessor, and that it required the plaintiff to pay the amount of the taxes set forth in the list delivered by the assessor to the collector, and which was paid by the plaintiff, under protest, as appears by the record.
"Whether the taxes paid by the plaintiff, and sought to be recovered back in this action, are not direct taxes, within the meaning of the Constitution of the United States."
"Representatives shall be apportioned among the several states which shall be included in this Union, according to their respective numbers,"
"Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States. [Footnote 6]"
to the census of enumeration hereinbefore directed to be taken."
"No tax or duty shall be laid on articles exported from any state. [Footnote 7]"
The national government, though supreme within its own sphere, is one of limited jurisdiction and specific functions. It has no faculties but such as the Constitution has given it, either expressly or incidentally by necessary intendment. Whenever any act done under its authority is challenged, the proper sanction must be found in its charter, or the act is ultra vires and void. This test must be applied in the examination of the question before us. If the tax to which it refers, is a "direct tax," it is clear that it has not been laid in conformity to the requirements of the Constitution. It is therefore necessary to ascertain to which of the categories, named in the eighth section of the first article, it belongs.
"I am inclined to think, but of this I do not give a judicial opinion, that the direct taxes contemplated by the Constitution are only two, to-wit, a capitation or poll tax simply, without regard to property, profession, or any other circumstance, and a tax on land."
say the only, object the framers of the Constitution contemplated as falling within the rule of apportionment, was a capitation tax and a tax on land. . . . The Constitution declares that a capitation tax is a direct tax; and both in theory and practice, a tax on land is deemed to be a direct tax. In this way, the terms 'direct taxes,' and 'capitation and other direct tax,' are satisfied."
Impost is a duty on imported goods and merchandise. In a larger sense, it is any tax or imposition. [Footnote 11] Cowell says it is distinguished from custom, "because custom is rather the profit which the prince makes on goods shipped out." [Footnote 12] Mr. Madison considered the terms "duties" and "imposts" in these clauses as synonymous. [Footnote 13] Judge Tucker thought "they were probably intended to comprehend every species of tax or contribution not included under the ordinary terms, taxes and excises.'"
The taxing power is given in the most comprehensive terms. The only limitations imposed are that direct taxes, including the capitation tax, shall be apportioned, that duties, imposts, and excises shall be uniform, and that no duties shall be imposed upon articles exported from any state. With these exceptions, the exercise of the power is in all respects unfettered.
If a tax upon carriages kept for his own use by the owner is not a direct tax, we can see no ground upon which a tax upon the business of an insurance company can be held to belong to that class of revenue charges.
The consequences which would follow the apportionment of the tax in question among the states and territories of the Union, in the manner prescribed by the Constitution, must not be overlooked. They are very obvious. Where such corporations are numerous and rich, it might be light; where none exist, it could not be collected; where they are few and poor, it would fall upon them with such weight as to involve annihilation. It cannot be supposed that the framers of the Constitution intended that any tax should be apportioned, the collection of which on that principle would be attended with such results The consequences are fatal to the proposition.
13 Stat. at Large §§ 105, 120, pp. 276, 283.
12 Stat. at Large 345, § 1.
3 U. S. 3 Dall. 171.
1 Kent's Commentary, 267; Story on the Constitution 670. See also Rawle on the Constitution 8; The Federalist, No. 34; and Tucker's Blackstone, Appendix, 294.
Tomlin's Law Dictionary, title "Duty;" 1 Story on the Constitution, § 952; Hylton v. United States, 3 Dall. 171.
Story's Const. Abr., § 474.
1 Story's Constitution 669, note.
Bateman's Excise Law 96; 1 Story's Constitution § 953; 1 Blackstone's Commentary 318; 1 Tucker's Blackstone, Appendix, 341.
Loughborough v. Blake, 5 Wheat. 317.

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