Show I LEGALITY Y VS EQUITY I BY J fl PAUl UL The Tho News has mado the tho timely suggestion that the Ule Income Tax amendment be thoroughly discussed Tue I legal CI 11 I and constitutional obJections lions to the proposed amendment to the tho Constitution empowering Congress to tole le levy a 11 tax an Incomes are aro well noll stated In your editorial ot of Wednesday and In Judge 1 Lo Grande O Youngs address be before fore Cora the bar association It Is however the tho justice of oC such lIuch a tax and the press pressIng log Ing need for It that I believe will Insure Its it triumph Tue words from Crom whatever source derived present some somo The Tho courts might con construe them to tho incomes of oC states and clUes cities from such sources as state ot 01 bon bends and It Is a pity that nit as thus worded thIs am lurks In tho wording of oC the tho proposed amendment Nevertheless we ought to show that we support the tho amendment because In principle It Il Is just right and necessary Yo We ought not to the proposition simply bo be cause ar to point out defects or omissions In Its wording It If the is III rIot not It can bo be changed later b by voting It In another form Nearly all practical Is a compromise with existing condItions condition Tle TIo economists ideal ot of ta taxation of oC ground rants In all their economic people as af a 1 whole do not yet et understand but It Is cas easy enough to prove pro to any layman that each person should contribute toward tito tho SUpport of oC the In pro portion to his Income rather titan than In proportion to the tho efforts ho he makes to feed clothe and educate his children At present the tho federal taxes mire lire levied on the tho rood food clothing utensils and books of oc the people The ta tax amendment proposes to give gIe Congress the power whIch It does docs not now have havo to place Home taxes upon In stead ot of collecting all taxes Cr front lII ex cx The Tue proposed was op posed at the tho annual meeting of oC the thu State Bill Bar association b by JUdge Le La Young Youns ot of thIs city As report d Judge Young objects to art an amendment that practically does awl awa with tho 1105 In regard to direct and indirect taxation and to going hand In hand with taxation so 80 bushy fought COI or and od carefully main tamed by the tho builders ot of the tho Con Ho He asks whether or not tho people should be willing to sustain an amend amond meat ment opening the door to a kind of oC taxation that he declares to bo be utterly inconsistent with the tho fundamental prin ot of our government just because in the of a s it f UI government of delegated powers should bu bo found to be not lest less powerful but butle le lose than U time Im ur of tho th advocates t of oC governmental power had supposed With VIlh eli all deference to o time thO legal logal moon men and general learning or of my ce t I am inclIned to think that ho places the tho emphasis upon the wrong poInt In supposIng that tho rca rea son lion for an Income tax Is to ex cx the powers of oC the tho Federal got JOV Tho proposed it IC will till oC have hao that ef C feet but the tho primary Is the tho collection ot of revenue for Cor the tho support of oC the sInce an any got JOV eminent have hao nt at least enough to support Itself hY legitImate taxation the extension of oC the power or of ortho the tho far Car enough to enable It to 10 levy suc taxes ns as are necessary to that end does docs not seem I to Ito bo a dangerous but bul merI a I sur sara extension of oC Its power potter to tax In the course cOUII e 0 othis his able abl argument Mr Young Youn quOtes the words of oC the tho Court First wo we to the opinion at al already rend ready announced that taxes on real estate being direct taxes taxes on the tho merits or Income of oC real e are arc equally direct taxes laes Second we are ot of the opinion that taxes an 11 personal property or on tile tho of oC personal property are aro like likewise wise direct taxes the taxes Imposed by section 27 to 37 mcl vo oC tile the act ot of 1894 so far Car as tt It raIls falls on time the Income or of re real l estate aind nd of oC personal property being u a direct tax In tho meaning of oC the Con Constitution Constitution and therefore unconstitutional nl al mind void not aPportioned to representation It Is true truo that according to the tho Con Constitution any federal taxes must ho bo apportioned according to tiomi but It If federal taxes atc to b blad be laId lad at nIl all on property the they should ho bo 1 from Crom Incomes and not from ascII ceh as n a unit and or of his Itis ability to pay Thu Th proposed amendment Is Intended to shift the bur burden burden den or of I Federal taxation from II a per pcr capita basis balls to a 1 pro property pert or Income basis At present tho Federal ta taxes es esaro are aro Indirect being derived largely from Crom on Imports and on liquors and tobacco The su sugar ar tax of oC nearly two cents I ier r round gound Is typical of oC this method An Any one aile who consumes a pound of oC sugar pays two cents tax upon It IC the tho article Is imported or two wo cents In extra price If IC it Il Is pro I In this country And nd since there Is little difference In the tho relative amount or of this article consumed b by a wealthy or by a poor person It amounts practically to a per por capita much head or roughly according to representation Mr Ir Young quotes the claim or of who the first Income tux tax law Tho They held hel 1 that taxation should not only le he uniform but should ho he equal antI and impartial and that the law was WILS Co for I imposing a 1 tax upon In como collIe that was wart received front Crom state and municipal bonds bends which was In viola tiomi of oC a great unwritten principle that the tho government should miot lIOt tax the tho or of the states state nOr tue tho states the tho of oC the general But Dut the tho equality contended for Cor In the tho ar just quoted Is more mor In favot ot of melO titan than of oC equality In Inthe time the sense ot of requiring each to pay accor according to his ability to pay and no ac accordIng cordIng to time the amount ot of lie he receives from Crom the government Titus Titusa a tax on sugar or flour would be form COlln and equal In Its operation but would be n a hardship to the tho poor and amid andIn In Iho nature of oC no an immunity to the rich It Is isto to give the Ule power In incase I case It ever eer wishes to use that power to tax Incomes that the present amend amendment merit ment Is proposed It does docs not net mean that an Income tax Is to bo Imposed right away W nor indeed cl at any 1 l Y It only menus en that Congress o shall have havo the tho rIght to tax incomes if IC or 01 when It shall decide to do 10 so 80 This proposed amendment Is a result or of the decision ot of the supreme court holding invalid the act of Congress of Aug Iii 15 1594 known ns as the tho Income tax law This law provided that aCter Jan I 1 1900 there should bo be assessed and paid annually upon the gains profits and Income received In the pre preceding ceding year b by eel every person residing In the United States a tax of 2 per par on the amount so derIved over and above This Is the tho law that was declared unconstitutional for Cor the reasons quoted above ahoo from Crom Mr Youngs address The Tho proposed amendment reads as follows The Congress shall have flower to tole le levy and collect tues taxes on Incomes from Crom source derived without apportionment among the tho several states and without regard to any cen sus ens or enumeration This amendment Is because three section two of the tho Constitution of oC article one provides that Representation and direct taxes shall be apportioned among the sever several nl al states which ma may be Included within this Union And the tho first paragraph o of section eight rends reads Congress shall power to Io lay and collect taxes duties Imposts and excises and alt all duties Imposts and excises shall be uniform Justice and equality according to the wealth or of the are as It occurs to me of oC more importance titan than un uniformity according to the number of the people In brier brief Mr Young has shown that tho former Cormer Income tax was illegal but not that It was inequitable that It was not uniform but not that It was therefore unjust It Is however precisely those un Unnoticed I noticed phases of oC the proposed amend I mont that should 1 bo be borne In mind mindIn In passing judgment upon Its merits morIts I |