from payment, as belonging to a totally different class from that which includes the property from whence the income proceeds? special exception. The case being within the words of the rule, must be within its operation likewise, unless there be something in the literal construction so obviously absurd or mischievous or repugnant to the general spirit of the instrument as to justify those who expound the Constitution in making it an exception.' (4 Wheat. 518, 644.) "There can be but one answer, unless the constitutional restriction is to be treated as utterly illusory and futile and the object of its framers defeated. We find it impossible to hold that a fundamental requisition, deemed so important as to "Being direct, and, therefore, to be laid by apbe enforced by two provisions, one affirmative and portionment, is there any real difficulty in doing so? one negative, can be refined away by forced dis- Cannot Congress, if the necessity exist of raising tinctions between that which gives value to prop- thirty, forty, or any other number of million dollars erty and the property itself. Nor can we perceive for the support of the government, in addition to any ground why the same reasoning does not apply the revenue from duties, imposts and excises, apporto capital in personality, held for the purpose of tion the quota of each State upon the basis of the income or ordinarily yielding income, and to the census, and thus advise it of the payment which income therefrom. All the real estate of the counmust be made, and proceed to assess that amount on try and all its invested personal property are open all the real and personal property or the income of to the direct operation of the taxing power if an all persons in the State, and collect the same, if the apportionment be made according to the Consti-State does not in the mean time assume and pay its tution. The Constitution does not say that no direct tax shall be laid by apportionment on any other property than land; on the contrary, it forbids all unapportioned direct taxes, and we know of no warrant for excepting personal property from the exercise of the power, or any reason why an apportioned direct tax cannot be laid and assessed, as Mr. Gallatin said in his report when Secretary of the Treasury in 1812, 'upon the same objects of taxation on which the direct taxes levied under the authority of the State are laid and assessed.' "The stress of the argument is thrown, however, on the assertion that an income tax is not a property tax at all; that it is not a real estate tax, or a crop tax, or a bond tax; that it is an assessment upon the taxpayer on account of his money spending power, as shown by his revenue for the year preceding the assessment; that rents received, crops harvested, interest collected, have lost all connection with their origin, and, although once not taxable, have become transmuted in their new form into taxable subject matter; in other words, that income is taxable irrespective of the source from which it is derived. "If it were the fact that there had been no income tax law, such as this, at the time the Constitution was framed and adopted, it would not be of controlling importance. A direct tax cannot be taken out of the constitutional rule because the particular tax did not exist at the time the rule was prescribed. As Chief Justice Marshall said in the Dartmouth College case: 'It is not enough to say that this particular case was not in the mind of the convention when the article was framed nor of the American people when it was adopted. It is necessary to go further and to say that, had this particular case been suggested, the language would have been so varied as to exclude it, or it would have been made a quota and collect the amount according to its own system and its own way? Inconveniences might possibly attend the levy of an income tax, but that it is apportionable is hardly denied, although it is asserted that it would operate so unequally as to be undesirable. "We are not here concerned with the question whether an income tax be or be not desirable, nor whether such a tax would enable the government to diminish taxes on consumption and duties on imports and to enter upon what may be believed to be a reform of its fiscal and commercial system. Questions of that character belong to the controversies of political parties, and cannot be settled by judicial decision. In these cases our province is to determine whether this income tax on the revenue from property does or does not belong to the class of direct taxes. If it does, it is, being unapportioned, in violation of the Constitution, and we must so declare. "Differences have often occurred in this court differences exist now - but there has never been a time in its history when there has been a difference of opinion as to its duty to announce its deliberate conclusions, unaffected by considerations not pertaining to the case in hand. Judge Harlan, in his dissenting opinion, said in part: "In my judgment to say nothing of the disregard of the former adjudications of this court, and of the practice of the government for a century this decision may well excite the gravest apprehensions. It strikes at the very foundation of national authority, in that it denies to the general government a power which is, or may at some time, in a great emergency, such as that of war, become vital to the existence and preservation of the union. It tends to re-establish that condition of helplessness in which Congress found itself during the period of the Articles of Confederation, when it was without power, by laws operating directly upon individuals, to lay and collect, through its own agents, taxes sufficient to pay the debts and defray the expenses of government, and was dependent in all such matters upon the good will of the States and their promptness in meeting the requisitions made upon them by Congress. "Why do I say that the decision just rendered impairs or menaces the national authority? The reason is so apparent that it need only be stated. In its practical operation this decision withdraws from national taxation not only all incomes derived from real estate, but the personal property of the whole country-invested personal property, bonds, stocks, investments of all kinds'- and the income that may be derived from such property. This results from the fact that, under the decision of the court, such incomes cannot be taxed otherwise than by apportionment among the States, on the basis simply of population. No such apportionment can possibly be made without doing monstrous, wicked injustice to the many for the benefit of the favored few in particular States. Any attempt upon the part of Congress to apportion the taxation of incomes among the States upon the basis of their population, would and properly ought to arouse such indignation among the freemen of America that it never would be repeated. No one ought to doubt this statement. When, therefore, this court adjudges, as it does now adjudge, that Congress cannot impose a duty or tax upon income arising from rents of real estate, or upon ‘invested personal property,' or upon income arising from 'invested personal property, stocks, bonds, investments of all kinds,' except by apportioning the sum to be so raised among the States according to population, it practically decides that without an amendment of the Constitution such incomes can never be made to contribute to the support of the national govern ment. "But this is not all. The decision now made will inevitably provoke a contest in this country from which the American people would have been spared if the court had not overturned its former adjudications and had adhered to those principles of taxations under which our government, following the repeated adjudications of this court, has always been administered. Thoughtful, conservative men have uniformly held that the government could not be administered safely except upon principles of right, justice and equality-without discrimination against any part of the people because of their owning or not owning invested or tangible property. But by its present construction of the Constitution, this court, for the first time in all its history, de clares that our government has been so framed that in matters of taxation for its support and maintenance those who have money derived from the renting of real estate, or from the leasing or using of tangible personal property, have privileges that cannot be accorded to those who have money derived from the labor of their hands, or the exercise of their skill, or the use of their brains. Let me illustrate this. "In the large cities or financial centers of the country there are persons who derive enormous incomes from the renting of houses that have been erected not to be occupied by the owner, but for the sole purpose of being rented. Near by are other persons, trusts, combinations, and corporations, possessing vast quantities of personal property such as the bonds and stocks of railroad, telegraph, mining, telephone, banking, coal oil, gas, and sugar refining corporations-from which millions upon millions of income are regularly derived. In the same neighborhood are others who own neither real estate nor invested personal property, nor bonds nor stocks of any kind, and whosc entire income arises from the skill and industry which are displayed by them in particular callings, trades or professions, or from the labor of their hands, or the use of their brains. And it is now held that under the Constitution, however urgent may be the needs of the government, however sorely the administration in power may be pressed to meet the moneyed obligations of the nation, Congress cannot tax invested personal property, nor the income arising either from real estate or from invested personal property, except by a tax apportioned among the States on the basis of their population, while it may compel the artisan, the workman, the artist, the author, the lawyer, the physician, even the minister of the gospel, no one of whom happens to own real estate, invested personal property, stocks or bonds, to contribute directly, and under the rule of uniformity or equality, from their respective earnings for the support of the government. "The attorney-general of the United States very appropriately said, that the constituitonal exemption from taxation of incomes arising from the rents of real estate, otherwise than by a direct tax, apportioned among the States on the basis of numbers, was a new theory of the Constitution, the importance of which to the whole country could not be exaggerated. If any one has questioned the correctness of that view of the decision rendered on the original hearing, it ought not again to be questioned, now that this court has included in the constitutional exemption from the rule of uniformity incomes derived from invested personal property. If Congress shall hereafter impose an income tax in order to meet the pressing debts of the na tion and to provide for the necessary expenses of the government, it is advised, by the judgment now rendered, that it cannot touch the income from real estate nor the income from invested personal property, except by apportionment among the States on the basis of population. Under that system the people of a State containing 1,000,000 of inhabitants, who receive annually $20,000,000 of income from real and invested personal property, would pay no more than would be exacted from the people of another State having the same number of inhabitants, but who receive an income from the same kind of property of only $5,000,000. If this new theory of the Constitution, as I believe it to be; if this new departure from the way marked out by the fathers is justified by the fundamental law, the American people cannot too soon amend their Constitution." Justice Harlan devoted some time to the consideration of the proposition that because a part of the law was unconstitutional, the remainder of it was invalid, and concluded as follows: "If the sections of the statute relating to a tax upon incomes derived from other sources than rents and invested personal property are to fall because, and only because, those relating to rents and to incomes from invested personal property are invalid, let us see to what result such a rule would logically lead. There is no distinct separate statute providing for a tax upon incomes. The income tax is prescribed in certain sections of a general statute, the object of which was to reduce taxation and to provide a revenue for the government. The judgment just rendered defeats the purpose of Congress by taking out of the revenue not less than thirty millions, and possibly fifty millions of dollars, expected to be raised from incomes. We know from the official journals of both houses of Congress that taxation would not have been reduced to the extent it was before the Wilson act but for the belief that if the country had the benefit of revenue derived from a tax on incomes that could be safely done. We know from official sources that each house of Congress distinctly refused to strike out the provisions imposing a tax on incomes. possible way the two houses of Congress indicated that it must be a part of any scheme for the reduction of taxation and for raising revenue for the support of the governmert, that (with certain exceptions) incomes arising from every kind of property and from every trade and calling should bear some of the burdens of the taxation imposed. If the court knows, or is justified in believing, that Congress would not have provided an income tax which did not include a tax on incomes from real estate, we are more justified in believing that the Wilson act would not have become a law at all with In every out provision being made in it for an income tax. If, therefore, all the income tax sections of the Wilson act must fall because some of them are invalid, does not the judgment this day rendered furnish ground for the contention that the entire act falls when the court strikes from it all of the income tax provisions, without which the act would never have been passed? "But the court takes care to say that there is no question as to the validity of any part of the Wilson act except those sections which provide for a tax on incomes. Thus something is saved for the support and maintenance of the government. It, nevertheless, results that those parts of the Wilson act which survive the new theory of the Constitution evolved by these cases are these imposing burdens upon the great body of the American people who derive no rents from real estate, and who are not so fortunate as to own invested personal property, such as the bonds or stocks of mammoth corporations, which hold within their control almost the entire business of the country. "Such a result is one to be deeply deplored. It cannot be regarded otherwise than as a disaster to the country. The practical, if not the direct, effect of the decision to-day is to give to certain kinds of property a position of favoritism and advantage that is inconsistent with the fundamental principles of our social organization, and to invest them with power and influence that may be perilous to that portion of the American people upon whom rests the larger part of the burdens of the government, and who ought not to be subjected to the dominion of aggregated wealth any more than the property of the country should be at the mercy of the lawI dissent from the opinion and judgment of less. the court." Judge Brown dissents, thus: "In view of the fact that the great burden of taxation among the several States is assessed upon real estate at a valuation, and that a similar tax was apparently an important part of the revenue of such States at the time the Constitution was adopted, it is not unreasonable to suppose that this is the direct tax the framers of the Constitution had in view when they incorporated this clause into that instrument. The significance of the words 'direct tax' was not so well understood then as it is now, and it is entirely probable that these words were used with reference to a generally accepted method of raising a revenue by tax upon real estate. "That the rule of apportionment was adopted for a special and temporary purpose that passed away with the existence of slavery, and that it should be narrowly construed, is also evident from the opinion of Mr. Justice Patterson, wherein he says that the Constitution has been considered as an accommo dating system; it was the effect of mutual compromises and concessions; it was the work of compromise. The rule of apportionment is of this nature; it is radically wrong; it cannot be supported by any solid reasoning. Why should slaves, who are a species of property, be represented more than any other property? The rule ought not, therefore, to be extended by construction.' 'Again, numbers do not afford a just estimate or rule of wealth. It is, indeed, a very uncertain and incompetent sign of opulence. There is another reason against the extension of the principle laid down in the Constitution.' "But, however this may be, I regard it as very clear that the clause requiring direct taxes to be apportioned to the population has no application to taxes which are not capable of apportionment according to population. It cannot be supposed that the convention could have contemplated a practical inhibition upon the power of Congress to tax in some way all taxable property within the jurisdiction of the Federal government for the purposes of a national revenue. And if the proposed tax were such that in its nature it could not be apportioned according to population, it naturally follows that it could not have been considered a direct tax within the meaning of the cause in question.” Discussing the application of the doctrine of apportionment, Justice Brown showed how unequally it would work in the various States because of the varying per capita amount of wealth possessed, and continued: "I have always entertained the view that, in cases turning upon questions of jurisdiction, or involving only the rights of private parties, courts should feel at liberty to settle principles of law according to the opinions of their existing members, neither regardless of nor implicitly bound by prior decisions, subject only to the condition that they do not require the disturbance of settled rules of property. There are a vast number of questions, however, which it is more important should be settled in some way than that they should be settled right, and once settled by the solemn adjudication of the court of last re Congress ought never to legislate, in raising the revenues of the government, in fear that important laws like this shall encounter the veto of this court or be crippled in great political crises by its inability to raise a revenue for immediate use. Twice in the history of this country such exigencies have arisen, and twice has Congress called upon the patriotism of its citizens to respond to the imposition of an income tax-once in the throes of civil war and once in the exigency of a financial panic, scarcely less disastrous." Justice Brown argued that Congress has the power to impose indirect taxes by the rule of uniformity; and being of opinion that a tax upon rents is an indirect tax upon lands, he said he was driven to the conclusion that the tax in question is valid. He then argued that there was no want of uniformity in the law within the meaning of the Constitution, since the court has repeatedly held that the uniformity there referred to is territorial only. He continued: "In the words of the Constitution the tax must be uniform throughout the United States.' Irrespective, however, of the Constitution, a tax which is wanting in uniformity among members of the same class is, or may be, invalid. But this does not deprive the legislature of the power to make exemptions, provided such exemptions rest upon some principle and are not purely arbitrary or created solely for the purpose of favoring some person or body of persons. Thus in every civilized country there is an exemption of small incomes, which it would be manifest cruelty to tax, and the power to make such exemptions once granted, the amount is within the discretion of the legislature, and so long as that power is not wantonly abused, the courts are bound to respect it. In this law there is an exemption of $4,000, which indicates a purpose on the part of Congress that the burden of this tax should fall on the wealthy, or at least upon the well to do. If men who have an income or property beyond their pressing needs are not the ones to pay taxes, it is difficult to say who are; in other words, en not upon persons." In conclusion, Justice Brown said: sort, the legislature and the people have a right to lightened taxation is imposed upon property and rely upon such settlement as forever fixing their rights in that connection. Even a century of error' may be less pregnant with evil to the State than a long deferred discovery of the truth. I cannot reconcile myself to the idea that adjudications thus solemnly made, usually by a unanimous court, should now be set aside by reason of a doubt as to the correctness of those adjudications, or because we may suspect that possibly the cases would have been otherwise decided if the court had had before it the wealth of learning which has been brought to bear upon the consideration of this case. "It is difficult to overestimate the importance of these cases. I certainly cannot overestimate the regret I feel at the disposition made of them by the court. It is never a light thing to set aside the deliberate will of the legislature, and in my opinion it should never be done except upon the clearest proof of its conflict with the fundamental law. Respect for the Constitution will not be inspired by a narrow and technical construction which shall limit the necessary powers of Congress. Did the reversal of these cases involve merely the striking down of the inequitable features of this law, or even the whole law, for its want of uniformity, the consequences would be less serious, but as it implies a declaration that every income tax must be laid according to the rule of apportionment, the decision involves nothing less than the surrender of the taxing power to the moneyed class. By resuscitating an argument that was exploded in the Hylton case, and has lain practically dormant for a hundred years, it is made to do duty in nullifying not this law alone, but every similar law that is not based upon an impossible theory of apportionment. Even the spectre of socialism is conjured up to dissuade Congress from laying taxes upon the people in proportion to their ability to pay them. "While I have no doubt that Congress will find some means of surmounting the present crisis, my fear is that in some moment of national peril this decision will rise up to frustrate its will and paralyze its arm. I hope it may not prove the first step toward the submergence of the liberties of the people in a sordid despotism of wealth. Believing, as I do, that the decision of the court in this great case is fraught with immeasurable danger to the future of the country, and approaches the proportions of a national calamity, I feel it a duty to enter my protest against it." Judge Jackson delivered a very long opinion, thus: “I am unable to yield my assent to the judgment of the court in these cases. My strength has not been equal to the task of preparing a formal dissenting opinion since the decision was agreed upon. I concur fully in the dissents expressed by Justice White on the former hearing and by the justices who dissent now, and will only add a brief outline of my views upon the main questions presented and decided. erty is a direct tax within the meaning of the Constitution, and, as such, in order to be valid, must be apportioned among the several States, according to their respective populations. "Second. That the incomes derived or realized from such property are an inseparable incident thereof, and so far partake of the nature of the property out of which they arise as to stand upon the same footing as the property itself. From these premises the conclusion is reached that a tax on incomes arising from both real and personal property is subject to the same rule of apportionment as a tax laid directly on the property itself, and not being so imposed by the act of 1894, by the rule of numbers, is unconstitutional and void, "Third. That the invalidity of the tax on incomes from real and personal property being established, the remaining portions of the Income Tax law are also void, notwithstanding the fact that such remaining portions clearly come within the class of taxes designated as duties or exercises, in respect to which the rule of apportionment has no application, but which are controlled and regulated by the rule of uniformity. "It is not found and could not be properly found by the court that there is any want of uniformity in this legislation. In the other provisions of the law there is not found and could not be, I say, any such lack of uniformity as would be sufficient to render these remaining provisions void for that reason. tion between the class of incomes which the court There is, therefore, no essential connecholds to be within the rule of apportionment and the other class falling within the rule of uniformity, and I cannot understand the principle upon which the court reaches the conclusion that because one sound, the principle upon which it rests could with equal propriety be extended to the entire revenue act of August, 1894. branch of the law is invalid, or the reason that the tax is not laid by the rule of apportionment, it thereby defeats and invalidates another branch "It should be borne in mind, it is not and canresting upon the rule of uniformity, and in respect not be denied, that under the broad and compre-clusion of the court on this third proposition is to which there is no valid objection. If the conhensive taxing power conferred by the Constitution on the national government, Congress has the authority to tax incomes from whatever source arising, whether from real estate or personal property or otherwise. It is equally clear that Congress, in the exercise of this authority, has the discretion to impose the tax upon incomes above a designated amount. The underlying and controlling question now presented is, whether the taxation of income received from land and personalty are subject to the rule of apportionment. "Take the freight tax cases in 15 Wallace. There was a single act, imposing a tax upon all railroads taking up freight without the State and bringing it within, and all freight taken up within the State and carried without. It came before this court, and this court decided that the valid and the invalid parts were separable, and that it would not defeat the entire act, though it was one singly and "The decision of the court holding the Income as a whole. Take the case cited by Mr. Justice Tax law of August, 1894, void is based upon the Harlan in addition, and, besides those, we come to following propositions: the case of Rathman v. The Western Union Tele"First. That a tax upon real and personal prop- graph Company in 127 U. S., where Ohio had |