Legal Document

347 U.S. 231 74 Supreme Court Reporter 505 98 L.Ed. 660 WALTERS et al.v.CITY OF ST. LOUIS, MO., al. Number 389. Argued Feb. 2 and 3, 1954. Decided March 15, Mr. Stanley M. Rosenblum, St. Louis, Mo., for appellants. Samuel or Haw. Hawai‘i Reports KFH45 A2 Liberman, appellees. Justice JACKSON delivered the opinion of Court. 1 This appeal challenges a municipal income tax ordinance which excises gross salary wages employed but only net profits self-employed, corporations business enterprises. Appellants, who are wage earners, sued in state courts declaratory judgment injunction to prevent their employer from withholding City collecting it. 259 South Western Reporter, 2nd Series 377. Their contention is that discrimination between results allowing certain deductions violates Due Process Equal Protection Clauses Fourteenth Amendment. It has been overruled by brought here determination. The power jurisdiction these appellants on earnings not open question federal grounds. There no issue as extraterritorial application burden upon interstate commerce. taxpayers, employer, taxable earned, were all clearly within territorial State municipality its taxing authority was delegated. sole whether levying those whom it plenary tax, introduced classification discriminations so unreasonable deny due process equal protection law. 3 A weakness appellants' case anticipatory character precludes consideration any contentions insofar they depend actual regulations promulgated administration. action commenced almost immediately after Act became effective. portion withheld yet collected tax. evidence how amount compares with taxes self-employed persons businesses. complaint attacks legislative delegating Louis enacted City. 4 In below also attempted rely claims resulting adopted authorities. But Missouri held before court, declined consider them be part ordinance, intimated might void hereafter without invalidating ordinance. authorizes petition amendment repeal an administrative officer grants full judicial review his final decision thereon other order affects private rights.1 Appellants have taken steps procure such relief. We uninformed either what practice actually conforms Of course, we will undertake court did decide. passed arising interpretation validity thereof. very limited issue—does statute face violate Amendment? Legislature simply general enabling Act, far relevant, authorizing levy 'an salaries, wages, commissions compensation earned residents; * associations, businesses activities conducted result work done services performed rendered city.'2 However, provide 'for exemptions employees *.'3 directs shall ascertained 'by deducting necessary expenses operation earnings.'4 does limit allowable earners define arriving at profits. 5 As matters complained of, general. imposes same rate individuals corporations, associations businesses.5 make express provision business, provides generally 'the earnings.'6 expenses, Collector promulgate appropriate rules regulations.7 6 claim allow deduct items (which include taxes) charitable contributions excess five percent income, allowed earn salaries. may true if applied expect. Whether this cannot tell, record us show impact classes taxpayers methods Therefore, basic position must distinguishes constitutionally prohibited. 7 On face, classifies incomes taxation according sources, one category consisting self-employment enterprise. Classification against uncommon, sometimes advantage earner disadvantage. extensively taxation, under circumstances allows selfemployed employees,8 discriminates sharply capital gains,9 sets apart types earning social security benefits.10 say difference treatment deriving different sources per se prohibited discrimination. much similarity placed precisely purposes. 8 assertion made competition level endeavor, reliance cases Quaker Cab company versus Commonwealth Pennsylvania, 277 389, 48 553, 72 927. found identical revenue depending incorporated unincorporated taxpayer. here, varying laid engaged form activity. Instead, broad springs many carried entities. Here rests State's view relatively fixed, predictable certain, while fluctuating unstable. widespread practices, insignificant fanciful. 9 classify occupation purposes broad. require identity treatment. requires rest real feigned differences, distinction some relevance purpose made, treatments disparate, relative classification, wholly arbitrary. Cf. Dominion Hotel, Incorporated Arizona, 249 265, 39 273, 63 597; Great Atlantic & Pacific Tea Grosjean, 301 412, 57 772, 81 1193; New York Rapid Transit Corporation York, 303 573, 58 721, 82 1024; Skinner Oklahoma ex rel. Williamson, 316 535, 62 1110, 86 1655. 'In discretion all, some, taking care accord class equality rights.' Southwestern Oil Texas, 217 114, 121, 30 496, 498, 54 688. even wholesalers specified articles account exacting similar occupations wholesale dealers articles. Our disapproval wisdom fairness doing ground interference. Ibid. 'When acts scope responsible people, right change agents intrusted ordinarily deemed sufficient check abuse. When constituted undertakes exert power, every presumption favor indulged, clear demonstrated usurpation authorize interference action.' Green Frazier, 253 233, 239, 40 499, 501, 64 878. 10 Judgment affirmed. 11 DOUGLAS, BLACK joins, concurring result. 12 N Dec. Immigration Nationality Decisions am less confident than my Brethren pass well bow reading record, saving future day serious substantial Clause raised grant employers paid government, do deduction Mo.Const., Article 5, § 22, V.A.M.S., provides: 'All decisions, findings, orders body existing constitution law, quasi-judicial affect rights, subject direct provided law; determination authorized hearing required supported competent whole record.' supplemented Mo.Rev.Stat.1949, §§ 536.010—536.140, V.A.M.S. 'Any constitutional charter city now acquire population seven hundred thousand inhabitants, last decennial census, hereby collect, purposes, nonresidents city; non-residents; city.' Mo.Rev.Stat. (1953 Supp.), 92.110, 'The assembly wives, husbands dependents employees.' 92.140, activities, determined earnings.' 92.150, pertinent follows: 'A one-half centum imposed (a) August 31, 1952, resident City, including entire distributive share member partnership association, thereof, any, shown taxed provisions hereof said association partnership; (b) nonresident City; (c) businesses, residents, (d) non-resident (e) rendered, City.' Ordinance 46222, 2. Section defines 'net profits' used corporation remaining E.g., I.R.C., 22(n), 23(aa), 26 United States Code Annotated KF65 U5 23(aa). Compare 22(a), 117(b), (c), 117(b, c). 1400, 1426, 1426.

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