excises. It has been suggested that the tax under consideration in the Hylton case was in reality a tax upon transportation and as such capable of transference to the person carried, and, therefore, when imposed upon the carrier clearly an indirect, and not a direct, tax; that the tax under consideration in Singer's case was clearly an excise; that the tax under consideration in the Veazie Bank case was in its own nature not a tax at all, but an exercise by Congress of the power to prohibit the issue of circulation by state banks in order to stimulate the formation of national banks; and that the tax under consideration in the Insurance Company's case was an indirect tax because capable of transference to the policy-holders paying premiums and assessments. Springer's case was decided long after the income tax of 1861 had been repealed, and when the popular and professional interest in the subject had ended, for no one then believed that this country would ever again be called upon to pay an income tax under the laws of the United States. It is the consensus of economic authorities that income tax laws, even when wisely framed, should be reserved only for great public emergencies, for the reason that they are necessarily unequal in operation in that they fall most heavily on those who conscientiously make full returns; and that when resorted to they should tax impartially the surplus income of every citizen, over and above that minimum which suffices for the necessities of the life of an individual, and that incomes received from salaries, or from professional compensation, if taxed at all, should, by reason of their terminable character, be less heavily taxed than incomes derived from invested funds. Under the income tax legislation of 1861 and its supplements, when the amount exempted was $600 the tax was paid by only four hundred

and sixty thousand persons, and when the amount exempted was $1,000 the tax was paid by less than two hundred and fifty thousand persons. The state of New York paid nearly one-third of that tax, and the states of New York and Pennsylvania paid nearly one-half thereof. The population and the wealth of the country had largely increased in the years preceding 1894, but it is certain that by reason of the larger amount exempted from taxation under the act of that year, the burden of the tax imposed by that law would have been borne by a relatively small number of persons, certainly not more than two per cent. of the population of the country. That law was a very objectionable specimen of class legislation. Not content with exempting the minimum amount which suffices for the necessities of the life of an individual, and which in 1894 certainly did not exceed $600, it enlarged the exemption to $4,000. It made no distinction between income received from salaries, or as professional compensation, and income derived from invested securities. While purporting to exempt from all taxation the incomes of charities, it yet taxed so much of their incomes as were derived from investments in corporate shares. It taxed as income the receipt by a widow or an orphan of that amount of insurance upon the life of the husband or father, which might possibly constitute the whole principal fund for the support of the beneficiaries. It taxed the interest received from investments in state, county, and municipal securities. It made no distinction between the rental received from productive land and moneys received from the sale of minerals, the taking away of which diminishes the principal. In taxing the rental of land, it necessarily taxed the land itself. It taxed profits realized on sales of real estate within two years, and it forbade a deduction for losses on like sales. It allowed a deduction

of $4,000 from the income of an unmarried person and it permitted only one exemption to that amount from the aggregate incomes of a family composed of parents, minor children, or husband and wife. It taxed without exemption income derived from corporate securities and it permitted the exemption in the case of incomes otherwise derived. It vested oppressive, arbitrary, and uncontrollable power in the tax collectors. It was an example of all that a tax law ought not to be. The constitutionality of that act came before the Supreme Court of the United States in 1895.64 It was argued that the judgment in Springer v. United States 65 did not establish any rule of property, and was, therefore, open to reconsideration; that that judgment was based solely on the dicta in Hylton v. United States; 66 and that, even if those dicta were binding authorities, capitation taxes were in reality nothing else than taxes imposed upon persons, either per capita, or graded in amount according to the possessions or income of the person; that taxes on the income of real estate were in substance taxes on the real estate from which the income was derived; and that taxes on the income from securities issued by a state, or by any political sub-division thereof, were taxes upon agencies of state government. It was argued in reply that the dicta in Hylton's case had not only been recognized by jurists and commentators as fixing the construction of the Constitution, but had also received the approval of the court in Springer's case; that the term "capitation" taxes as understood by the framers of the Constitution, meant nothing more than poll taxes; and that the income of any person, from whatever source derived, was a legal entity, entirely distinct from its sources, and, therefore, independently taxable; and that

Pollock v. F. L. & T. Co., 157 U. S. 429, and, on rehearing, 158 id. 601. 65 102 U. S. 586.

3 Dall. 175.

with the policy of the legislation the court had nothing to do, and could only concern itself with the grounds of legal objection. At the first hearing it was decided, two justices dissenting, that so much of the act as provided for levying taxes upon incomes derived from real estate was invalid, because such taxes are in legal effect taxes upon real estate, and are, as such, direct taxes, and can only be imposed according to the rule of apportionment, and that so much of that act as taxed income derived from investments in state, county, and municipal securities was invalid because taxes on the states and on their instrumentalities of government. The justices who heard the argument were, however, equally divided, and, therefore, expressed no opinion, as to the other questions raised. Upon the rehearing, the court decided, four justices dissenting, that, in addition to the points decided at the first hearing, a tax on an individual in respect of his income derived from real, or personal, property is a direct tax, and, therefore, can be laid only under the rule of apportionment. The opinion of the profession and the sober second thought of the country have approved the judgment of the court. The requirement that direct taxes must be "laid in proportion to the census or enumeration" is not violated by a statutory imposition of a penalty for non-payment of the tax; 67 and the amount of penalty to be enforced is a matter within legislative discretion.68

Requirement of uniformity.

19. "All duties, imposts, and excises shall be uniform throughout the United States." 69 The requirement of uniformity means that there must be geographical uniformity, or, in other words, that "wherever a subject is

"De Treville v. Smalls, 98 U. S. 517.

"W. U. T. Co. v. Indiana, 165 U. S. 304. "Article I, Sec. 8, Par. 1.

taxed anywhere, the same must be taxed everywhere throughout the United States, and at the same rate," 70 and taxation is uniform, when it operates with the same effect in all places where the subject of taxation is found, though that subject be not equally distributed in all parts of the United States.71 Subjects of taxation may, in the discretion of Congress, be classified without impairment of uniformity, and, while the theory is that such classification should not be arbitrary, but must be based upon grounds of real distinction, yet, in view of the progressive inheritance tax cases,72 it would be difficult to make a classification sufficiently arbitrary to justify a judicial determination that the classification violates the rule of uniformity. Sales of property at "any exchange, or board of trade, or other similar place" may be taxed, when sales otherwise made are not taxed.73 Inheritances may be taxed, even though the rate of taxation progressively increase according to the value and amount of the devise, bequest, or distributive share, and though there be discrimination in the rate as between lineals, collaterals, and strangers; and, under the statute," the subject of taxation is not the corpus of the estate, but the amount of each particular devise, bequest, or distributive share.75 Though free from objection on constitutional grounds, the progressive inheritance tax law is a very objectionable exercise of legislative discretion, for it violates the fundamental American doctrine that all men are equal before the law, and that equality of rights implies equality of obligations, and it is of dangerous import in that it teaches the many

70 Knowlton v. Moore, 178 U. S. 41, 84, per White, J. "The Head Money Cases, 112 U. S. 580.

72 Knowlton v. Moore, 178 U. S. 41; Murdock v. Ward, ibid. 139. 7 Nicol v. Ames, 173 U. S. 509.

"Act of 13th June, 1898, 30 Stat. 448, c. 448.

75 Knowlton v. Moore, 178 U. S. 41.