Court Opinion

ID: 3889870
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:19:11.00277+00
Date Added: 2024-06-11T13:54:47.425742
License: Public Domain

The expediency or economic or social wisdom of the gross income tax law or the questions of whether it will make for a more fair and equitable distribution of the tax burden among our citizens, or whether it can or will accomplish the good its proponents predicted, are matters with which this court cannot concern itself. The responsibility for the determination of those questions was assumed by the Legislature which enacted the law and must continue to remain with and rest upon that Legislature. It is entirely conceivable that constitutional objections might be urged (whether successfully or not) against the law as a whole or against various portions or provisions thereof. Cf., for example, Winter v. Barrett (opinion filed May 10, 1933), 352 Ill. 441, 186 N.E. 1131. But no such matters are before this court in the present proceeding.
The sole judicial question now for decision is whether or not this law is "necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions," within the meaning of section 1, art. 3, Const. S. Dak. The statute carries no emergency clause and, in any event, it would hardly be urged that it was necessary for the immediate preservation of the public peace, health, or safety. Our inquiry therefore analyzes down to this: Is the statute necessary for the support of the state government and its existing public institutions within the meaning of the constitutional provision? *Page 349 
I think the word "necessary" in the constitutional provision should not be disregarded. I do no think that the mere facts that the statute is for the support of government and was enacted by the Legislature establish conclusively and beyond possibility of judicial review that the statute was necessary for the support of the state government. I think the result arrived at by this court in State ex rel Wegner v. Pyle, 55 S.D. 269, 226 N.W. 280, was correct, but, after further study and deliberation, I do not now adhere to all the language or reasoning set forth in that opinion. When the Legislature passes an act for the support of the state government or its existing public institutions and the referendum is sought to be invoked thereon, I believe a judicial question is presented as to the necessity of the act. That question should be determined, in my judgment, as stated in State ex rel Wegner v. Pyle, supra, page 277 of 55 S.D., 226 N.W. 280, 283, by considering "the effect upon such support of the delay incident to referring the law and the consequences, if the law is defeated." I believe that this court, in making such determination, ought generally to resolve the question in favor of the necessity of the legislative act unless the contrary quite plainly appears. I think the contrary did very clearly appear in the light of all the facts in State ex rel Wegner v. Pyle. I now think, however, that it was fallacious to assume, as apparently we did assume in the Pyle Case, that the mere presence in the law of a "replacement clause" such as was contained in that law (and such as is contained with reference to the present law in the companion act, chapter 185, Laws 1933) whereby, in substance, the taxing authorities are "specifically directed and required to eliminate or reduce property tax levies to the full extent of the revenues made available by the collection of the tax imposed by said act" is sufficient in every case, and without more, to demonstrate that the act imposing the new tax merely shifts pro tanto the burden of taxation and that government will continue to be supported (as it has been in the past) whether such shift is made or not. At the present time and under present economic conditions, it seems to be entirely possible that, if tax levies upon property are continued at present rates, an appreciable number of property owners may be unable to pay taxes and taxing districts may be unable to realize the necessary amount of revenue from the taxed property either by sale thereof *Page 350 
to others or from income if bid in by the district. On the other hand, if levies on property can be reduced by some other sort of tax, the burden of which may be differently distributed and the incidence of which will be more frequent but will require smaller payments at any one time, its is equally entirely possible that property taxes levied at somewhat lower rates will be paid or realized to an appreciably greater extent. It is possible in the one case that within two years revenues may be or become inadequate for governmental purposes and it is possible in the other case that they may be and continue adequate. I do not say that either of these possibilities would necessarily become actualities, nor can I predict how much, if at all, the operation of the income tax law may improve the situation, but so long as these possibilities exist, as I believe they do exist, I am not willing to hold that there are any facts proper for judicial notice whence this court can declare in this case that "it is plain that the support of government will be unaffected in any manner" by the referendum of the gross income tax law. I do not believe this court can or should say, as a matter of judicial determination, that this law at the present time is not "necessary for the support of the state government and its existing public institutions."
I therefore concur in the view that the act is not subject to the referendum and that the alternative writ of mandamus should be quashed.