Source: https://www.legalcrystal.com/case/95062/bromley-vs-mccaughn
Timestamp: 2018-02-20 13:59:06
Document Index: 98169550

Matched Legal Cases: ['§ 2', '§ 8', '§ 319', '§ 324', '§ 2', '§ 8', '§ 8', '§ 2', '§ 9', '§ 8', '§ 8']

Bromley Vs Mccaughn - Citation 95062 - Court Judgment | LegalCrystal
Bromley Vs. Mccaughn - Court Judgment
LegalCrystal Citation legalcrystal.com/95062
Case Number 280 U.S. 124
Appellant Bromley
Respondent Mccaughn
.....art. i, §§ 2, 8, 9. p. 280 u. s. 135 . 2. the uniformity of taxation throughout the united states enjoined by art. i, § 8, is geographic, not intrinsic. p. 280 u. s. 138 . 3. the graduations of the tax, and the exemption of gifts aggregating $50,000, gifts to any one person that do not exceed $500, and certain gifts for religious, charitable, educational, scientific, and like purposes, are consistent with the uniformity clause, and with the due process clause of the fifth amendment. id. 4. the schemes of graduation and exemption in the statute, by which the tax levied upon donors of the same total amounts may be affected by the size of the gifts to individual donees, are not so arbitrary and unreasonable as to deprive the taxpayer of property without.....
Bromley v. McCaughn - 280 U.S. 124 (1929)
U.S. Supreme Court Bromley v. McCaughn, 280 U.S. 124 (1929)
1. The tax imposed by Revenue Act of 1924, §§ 319-324, as amended by Revenue Act of 1926, § 324, upon transfers of property by gift, is not a direct tax within the meaning of the Constitution, but an excise on the exercise of one of the powers incident to ownership, and need not be apportioned.Const., Art. I, §§ 2, 8, 9. P. 280 U. S. 135 .
2. The uniformity of taxation throughout the United States enjoined by Art. I, § 8, is geographic, not intrinsic. P. 280 U. S. 138 .
4. The schemes of graduation and exemption in the statute, by which the tax levied upon donors of the same total amounts may be affected by the size of the gifts to individual donees, are not so arbitrary and unreasonable as to deprive the taxpayer of property without due process. P. 280 U. S. 139 .
1. The first question was mooted by counsel, but not decided, in Blodgett v. Holden, 275 U. S. 142 , and Untermyer v. Anderson, 276 U. S. 440 . The general power to "lay and collect taxes, duties, imposts, and excises" conferred by Article 1, § 8, of the Constitution, and required by that section to be uniform throughout the United States, is limited by § 2 of the same article, which requires "direct" taxes to be apportioned, and § 9, which provides that "no capitation, or other direct, tax shall be laid, unless in proportion to the census" directed by the Constitution
The meaning of the phrase "direct taxes" and the historical background of the constitutional requirement for their apportionment have been so often and exhaustively considered by this Court, Hylton v. United States, 3 Dall. 171; Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 ; 158 U. S. 158 U.S. 601; Knowlton v. Moore, 178 U. S. 41 ; Nicol v. Ames, 173 U. S. 509 , 173 U. S. 515 , that no useful purpose would be served by renewing the discussion here. Whatever may be the precise line which sets off direct taxes from others we need not now determine. While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers' Loan & Turst Co., 157 U. S. 429 , 158 U. S. 158 U.S. 601, this Court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership is an excise which need not be apportioned, and it is enough for present purposes that this tax is of the latter class. Hylton v. United States, supra; cf. 75 U. S. Fenno, 8 Wall. 533; Thomas v. United States, 192 U. S. 363 , 192 U. S. 370 ; Billings v. United States, 232 U. S. 261 ; Nicol v. Ames, supra; Patton v. Brady, 184 U. S. 608 ; McCray v. United States, 195 U. S. 27 ; Scholey v. Rew, 23 Wall. 331; Knowlton v. Moore, supra. See also Flint v. Stone Tracy Co., 220 U. S. 107 ; Spreckels Sugar Refining Co. v. McClain, 192 U. S. 397 ; Stratton's Independence v. Howbert, 231 U. S. 399 ; Doyle v. Mitchell Brothers Co., 247 U. S. 179 , 247 U. S. 183 ; Stanton v. Baltic Mining Co., 240 U. S. 103 , 240 U. S. 114 .
property or ownership may be fully enjoyed free of the tax. So far as the constitutional power to tax is concerned, it would be difficult to state any intelligible distinction, founded either in reason or upon practical considerations of weight, between a tax upon the exercise of the power to give property inter vivos and the disposition of it by legacy, upheld in Knowlton v. Moore, supra, the succession tax in Scholey v. Rew, supra, the tax upon the manufacture and sale of colored oleomargarine in McCray v. United States, supra, the tax upon sales of grain upon an exchange in Nicol v. Ames, supra, the tax upon sales of shares of stock in Thomas v. United States, supra, the tax upon the use of foreign built yachts in Billings v. United States, supra, the tax upon the use of carriages in Hylton v. United States, supra; compare Veazie Bank v. Fenno, supra, 75 U. S. 545 ; Thomas v. United States, supra, 192 U. S. 370 .
It is true that, in each of these cases, the tax was imposed upon the exercise of one of the numerous rights of property, but each is clearly distinguishable from a tax which falls upon the owner merely because he is owner, regardless of the use of disposition made of his property. See Billings v. United States, supra; cf. Pierce v. United States, 232 U. S. 290 . The persistence of this distinction and the justification for it rest upon the historic fact that taxes of this type were not understood to be direct taxes when the Constitution was adopted and, as well, upon the reluctance of this Court to enlarge by construction, limitations upon the sovereign power of taxation by Article I, § 8, so vital to the maintenance of the national government. Nicol v. Ames, supra, 173 U. S. 514 -515.
uses; that one of the uses of property is to keep it, and that a tax upon the possession or keeping of property is no different from a tax on the property itself. Even if we assume that a tax levied upon all the uses to which property may be put, or upon the exercise of a single power indispensable to the enjoyment of all others over it, would be in effect a tax upon property, see Dawson v. Kentucky Distilling & Warehouse Co., 255 U. S. 288 , and hence a direct tax requiring apportionment, that is not the case before us.
2. The uniformity of taxation throughout the United States enjoined by Article 1, § 8, is geographic, not intrinsic. A graduated tax, on legacies, granting exemptions, Knowlton v. Moore, supra, or on incomes, Brushaber v. Union Pacific R. Co., 240 U. S. 1 , does not violate this clause of the Constitution, nor are such taxes infringements on the Fifth Amendment. Knowlton v. Moore, supra, p. 178 U. S. 109 ; Brushaber v. Union Pacific R. Co., supra, pp. 240 U. S. 24 -25. Graduated taxes on inheritances or successions, with provisions for exemptions, have so often been upheld as not violating either the due process or the equal protection clauses of the Fourteenth Amendment, Stebbins v. Riley, 268 U. S. 137 , as to leave little ground for supposing that taxation by Congress embracing these
features, and otherwise valid, could be deemed a denial of the due process clause of the Fifth. See Van Oster v. Kansas, 272 U. S. 465 , 272 U. S. 468 .
Stebbins v. Riley, supra, p. 268 U. S. 145 . No more can they be a basis for holding that the graduation and exemption features of the present statute violate the Fifth Amendment.
tax the property. Dawson v. Kentucky Distilleries Co., 255 U. S. 288 , 255 U. S. 294 .
Brown v. Maryland, 12 Wheat. 419, involved the validity of a state statute which exacted a license fee of $50 of importers of foreign goods and other persons selling the same by wholesale, bale, or package, etc. The act was held void as imposing a duty on imports. It was argued that the tax was not upon the article, but upon the person; that the state had the power to tax occupations, and this was nothing more. To this, Chief Justice Marshall replied (. 25 U. S. 444 ) in words that have been repeatedly approved in subsequent decisions of this Court:
In Cook v. Pennsylvania, 97 U. S. 566 , it was held that a tax on the amount of sales made by an auctioneer was a tax upon the goods sold, and, where these goods were imported in the original package and sold for the importer, the law authorizing the tax was void.
Nicol v. Ames, 173 U. S. 509 , is not to the contrary of these cases, but in complete accord with them. There, it was held that a tax levied upon a sale of property effected at a board of trade or exchange was an excise laid upon the privilege, opportunity, or facility afforded by boards of trade or exchanges for the transaction of the business, and not upon the property or the sale thereof, which, it was conceded, would be a direct tax and void without apportionment. Brief quotations from the opinion will make the distinction clear. Referring to the cases which had been cited against the tax, including Brown v. Maryland, supra, and the Pollock case, it was said that all these cases involved the question whether the taxes assailed were, in effect, taxes upon property and (p. 173 U. S. 519 ): "If this tax is not on the property, or on the sale thereof, then these cases do not apply." At p. 173 U. S. 520 , answering the contention that the tax was one on the property sold, it was said:
And, finally, at p. 173 U. S. 521 , the Court said in words that admit of no mistake: