Court Opinion

ID: 8194160
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:18.017907+00
Date Added: 2024-06-11T16:40:42.535373
License: Public Domain

The following opinion was filed January 31, 1923:
CrowNhart, J.
(dissenting in par-t). I concur with the opinion of the court except in that part of the decision as to rates to be applied in assessing incomes for the surtax.
When the bill, 234, S, was before the legislature, the committees necessarily made estimates of the tax to be raised and the probable income based on the rates in the bill. After the bill passed the two houses and before it was signed by the governor, to be sure of the legislative intent the tax commission asked for and received the public opinion of the attorney general on the proper construction. In that opinion I fully concur. It reads as follows:
“June 24, 1921.
“You have asked my opinion as to the meaning of certain surtax provisions of the teachers’ retirement fund bill No. 234, S, which has 'now passed both houses and is about to be presented to the governor.
“The bill creates a new sec. 20.251, Stats. Sub. (1) provides that, in addition to the income tax imposed by the income tax law, there shall be levied on the incomes of all individuals, copartnerships, and fiduciaries a ‘surtax on net income computed at one sixth the rates prescribed in sub. 1 of sec. 1087m — 6.’ The second subsection of 20.251 makes a similar provision as to the income of corporations, referring to the rates named in sub. 2 of sec. 1087m — 6 as taxable income under the income tax law. The latter law provides that the surtax ‘shall be upon the net income in excess of $3,000.’ The fourth subsection provides that ‘net income’ shall be computed in the same manner as the income taxable under the income tax law.
' “The question on which you ask an opinion is whether, in determining the rate applicable to the first thousand dollars of income subject to surtax, you should take one sixth *577of the rate applicable to the same income under the income tax law or one sixth of the rate applicable to the first $1,000 of taxable income under that law.
“Under the definition contained in sub. (4), net income within the meaning of the new law will be exactly the same as taxable income under the income tax law. The latter law provides as to individuals a rate of 1 % on the first $1,000 of taxable income, 1% % on the next $1,000, lj4 % on the third $1,000, and lj4 % on the fourth $1,000. The corresponding rates for corporations are 2 %, 2}4 %, 3 %, and 3j4 %, respectively. The new law provides that there shall be a surtax on the 'net income/ meaning the taxable income, and it further provides that the first $3,000 of that taxable income shall not be 'surtaxable/ if I may use the tefm. It then provides that when the point is reached at which the income becomes 'surtaxable/ the surtax shall equal one sixth the rates prescribed in the income tax law itself.
“To my mind, this very clearly means that the rate payable by a given thousand dollars of income after it reaches the point of being 'surtaxable’ shall be one sixth of the rate that that same thousand dollars is concurrently paying as regular income tax. The new law does not provide for an extra $3,000 to be taken'off the gross income before arriving at the net income; on the contrary, sub. (4) expressly provides that the net income for the purposes of the new law shall be ascertained in the same manner as the taxable income is ascertained under the income-tax law. Hence, the net income, within the meaning of the new law, begins to exist as soon as the taxable income begins to exist under the income law: i. e. as soon as there is a margin over the ordinary exemptions and deductions. As soon as this taxable income or net income begins to exist it is subject to an income tax, but it does not become subject to a surtax until another $3,000 has been added to it. When this $3,000 has been added it becomes ‘surtaxable’ at one sixth of the rate at which it is taxable. That rate, in the case of individuals, is 1^4 %> and in the case of corporations 3j4 %. It appears to me that the only meaning logically to be read out of the language of the new law is that the surtax rate applicable to the first $1,000 of ‘surtaxable’ income is one sixth of % in the case of individuals, and one sixth of 3j4 % in the case of corporations.”
*578No attempt was made to recall the bill for correction and the legislature accepted the construction placed upon it by its official adviser. The governor signed the bill with that construction before him. The tax commission accepted that construction and published the opinion in its pamphlet of instructions to assessors. The taxes were so assessed and generally paid by the persons and corporations coming under the law. Many of these had expert counsel to guide them in making their returns. Now at this late date the court, at the suit of an objector, changes the rates as applied in the assessment and collection of the taxes for 1922, and throws confusion into the orderly administration of the law. I think the construction given by the court is unduly strained and technical. Taxes are not popular, but, when once laid, justice demands that all taxpayers be treated alike. Those who have paid without protest cannot get the overcharge back. The result in this case is to- make the great majority of the taxpayers who have paid, take the added burden of the losses occasioned by those who have not paid.
As we have seen, the law was construed by the legal department of the state; that construction was acquiesced in by the legislative department; it was accepted by the executive department in signing the bill; the administrative department sustained such construction and so administered the law; the taxpayers generally have paid taxes under the law so construed without protest for one year, and a second assessment has been spread on the rolls and is now being paid.
“The construction given-to a statute by the body of men or officers who are directed to act upon it is always entitled to weight, and their construction should not be overridden by the courts, unless it be contrary to the clearly expressed meaning of the law.” Wright v. Forrestal, 65 Wis. 341, 348. 27 N. W. 52.
*579As indicated, I respectfully dissent from so much of the decision as overrules the decisions of the attorney general and the tax commission.
A motion for a rehearing was denied, without costs, on November 13, 1923.