representation and direct taxes shall be apportioned among the several States . . . according to their respective numbers. Direct taxes in the sense of the Constitution are poll-taxes and taxes on land.1 A law requiring the payment of a given sum for every watch, horse, or carriage, is consequently valid, though laid without regard to population; and a tax laid by Congress on the notes of the State banks comes under the same category.2 The reason for this interpretation is obvious: chattels ordinarily have a value which is everywhere much the same, while the price of land depends on the local demand for it, and increases as population grows more dense. The object in both cases is equality; but owing to the diversity of the subject-matter, the rule is necessarily different. So an incometax ought to be in proportion, not to the number of the inhabitants, but to their annual receipts, and is not, therefore, a direct tax which must be laid according to the last census or enumeration.3 The right to tax, like the other grants in the Constitution, carries with it the power to use any appropriate means to render the right effectual; and hence while Congress have no general power to regulate contracts, and such legislation would be invalid, they may enact that deeds or written agreements shall be stamped, and provide that they shall be inadmissible in evidence, or invalid, if the condition be not fulfilled.4 1 Hylton v. The United States, 3 Dallas, 175. 2 The Bank v. Fenno, 8 Wallace, 533. 8 The Pacific Insurance Co. v. Soule, 7 Wallace, 434. 4 Ante, p. 109. LECTURE XVI. Taxation by the States. - Express Restrictions in the Constitution of the United States. — Duties on Imports or Exports distinguished from Taxes on Sales. - Tonnage Taxes. Restrictions Implied in the Supremacy of the United States Government. Taxation impeding the Efficient Exercise of the Powers of the United States distinguished from Taxation of the Property of Corporations chartered by Congress or of the Agents of the United States. - Similar Restriction upon the Taxation of the Instruments of State Government by the United States.— Taxation of the Paper Currency of State Banks. Restrictions upon State Taxation implied in the Power of Congress to regulate Commerce. Freight Taxes. Licenses. — Passenger Taxes. - Restrictions implied in the Guaranty of Equal Privileges to the Citizens of every State. Discrimination in Wharfage Fees. THE States have a general power of taxation, which is, nevertheless, subject to some express and various implied limitations, and must be exercised in due subordination to the paramount authority of the National Government.1 The express restrictions are that "no State shall without the consent of Congress lay any imposts or duties on imports or exports except what may be absolutely necessary for executing its inspection laws. . . . No State shall without the consent of Congress lay any duty on tonnage." The motive for the above prohibitions was presumably to prevent the States from frustrating the powers which had been bestowed on the General Government. Congress obviously could not regulate the commercial relations of the United States with foreign nations if imports might be subjected to unequal or excessive taxation, and each State could in effect establish a tariff of its own. A State tax, therefore, cannot 1 Lane County v. Oregon, 7 Wallace, 77; Union Pacific R. R. Co. v. Peniston, 18 Id. 29. be levied on goods that have been brought from abroad while they are passing through the custom-house or are in the hands of the importer; nor can he, or the agent or auctioneer whom he employs, be obliged to procure a license before effecting a sale, because such a requirement is virtually a tax and would moreover operate as a regulation of commerce.1 So exports cannot be taxed directly or by laying a duty on the bills of lading signed by the master of the vessel.2 The prohibition does not apply to imports from other States, nor to foreign imports after they have passed from the importer's hands and become a part of that mass of personal property which is subject to the jurisdiction of the States. A different interpretation would embarrass the State governments, by obliging them to refrain from the taxation of merchandise and the persons by whom it is. bought and sold, or confine it to their own productions, contrary to the equality which it is the object of the Constitution to promote. It was accordingly held in Woodruff v. Parham that a "uniform tax on sales may be valid whether the vendor's business is confined to the products of the State, or includes articles grown or manufactured elsewhere;" and it was said in this instance that a duty on bills of lading for goods shipped to another State would be valid, did it not operate as a restraint on the commerce among the States, which has been exclusively confided to Congress. For like reasons, imported liquors are not exempt from the license or prohibitory laws of the several States, although they are still in their original packages, and can be identified as 1 Brown v. Maryland, 12 Wheaton, 419. 2 Almy v. California, 24 Howard, 169. 5 In Brown v. Houston, 114 U. S. 623, 628, it was said to be immaterial that the coal was still lying at the wharf and had been brought by third persons with a view to exportation, because the object of the importer was not to send it abroad, but to dispose of it there. But a tax on the arrival or landing of passengers or freight from another State is in effect a tax on the transportation which is essential to interstate commerce, and therefore invalid. Gloucester Ferry Co. v. Pa., 114 U. S. 196, 203. EXPRESS RESTRAINTS. 253 having passed through the custom-house and paid duty to the General Government. The wholesale or retail sale of liquor by or on behalf of the importer is, nevertheless, beyond the reach of State taxation; and if he may be required to procure a license, or submit to such other needful regulations as the peace and good order of society require, these cannot, as it would seem, be carried to the length of prohibition consistently with the Constitution. A tax on imports from other States must nevertheless be so laid as not to operate as a regulation of commerce, or contravene the provision that the citizens of each State shall be entitled to the privileges and immunities of the citizens of the several States. It must consequently be equal in its operation, or at least not so drawn as to discriminate against the goods of other States; and an attempt to contravene this rule, or subject imported goods to a greater burden than the State imposes on her own products, will be contrary to the letter and spirit of the Constitution of the United States.2 And if this effect is produced, it matters not that the tax is laid under the police power with a view to prevent the sale of intoxicating drinks. The prohibition of duties on the cargo would be of little value if the vessels which serve as a means of transportation could be taxed at pleasure; and tonnage taxes are, as we have seen, not less unconstitutional than those on imports and exports. Ships cannot therefore be singled out by a State for taxation, and any duty on them as such will be invalid, whether it takes the form of a fixed sum on the entire tonnage, or of a sum to be ascertained by comparing the amount of tonnage with the rate prescribed by the legislature. I may add that the clause is broader than the end would seem to require, and extends beyond interstate and external commerce to vessels which are exclusively employed 1 License Cases, 5 Howard, 504. * Woodruff v. Parham, 8 Wallace, 140; Walling v. Michigan, 116 U. S. 446. Steamship Co. v. Port Wardens, 6 Wallace, 31; State Tonnage Tax Cases, 12 Id. 210. in navigating the waters of the State which lays the tax.1 Such an imposition cannot be rendered valid by a change of terms or calling that a license which is really a charge on commerce; and an ordinance which in fixing the sum to be paid for a license to pursue professions, trades, or other callings names a sum to be collected from persons owning or running boats to and from the Gulf of Mexico and the city of New Orleans is consequently an infringement of the power of the General Government to regulate commerce. The boats might have been taxed in proportion to their value, or the business according to receipts and profits; but the running of the boats is navigation, and beyond the reach of State legislation in any form.2 The object of the Constitution is to preclude the taxation of vessels as instruments of commerce, and not to exempt the owners of such property from contributing their share of the expenses of government. The taxpayer may consequently be assessed in proportion to what he owns, whether it consists of ships, merchandise, or houses; and hence a citizen may be assessed by the State where he resides for his right or interest in a vessel as measured by its market price or value.3 "Taxes," said Clifford, J., " levied by a State upon ships and vessels owned by the citizens of the State as property, and based on a valuation of the same as property, are not within the constitutional prohibition." 4 For like reasons a tax may be laid on the income derived from vessels, railways, or other property employed in interstate or foreign commerce, there being a manifest distinction between a tax on transportation and a tax upon its fruits when realized and reduced to possession so as to 1 State Tonnage Tax Cases, 12 Wallace, 204, 219; Peete v. Morgan, 19 Id. 581. 2 112 U. S. 69, 74, Hays v. Pacific Mail Co., 17 Howard, 596; Morgan v. Parham, 16 Wallace, 471; Transportation Co. v. Wheeling, 99 U. S. 278; Wiggins Nav. Co. v. East St. Louis, 107 Id. 365; Moran v. New Orleans, 112 Id. 69, 74. See Huse v. Glover, 119 U. S. 543, 549. 4 State Tonnage Tax Cases, 12 Wallace, 204. |