U.S. Supreme Court Pollock v. Farmers' Loan & Trust
Co., 157
U.S. 429 (1895) Pollock v. Farmers' Loan and Trust
Company No. 898 Argued March 7, 8. 11, 12, 13,
1895 Decided April 8,
1895. 157
U.S. 429 APPEAL FROM THE CIRCUIT COURT OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK Syllabus A court of equity has jurisdiction to prevent a threatened
breach of trust in the misapplication or diversion of the funds of
a corporation by illegal payments out of its capital or
profits.

															Such a bill being filed by a stockholder to prevent a trust
company from voluntarily making returns for the imposition and
payment of a tax claimed to be unconstitutional, and on the further
ground of threatened multiplicity of suits and irreparable injury,
and the objection of adequate remedy at law not having been raised
below or in this court, and the question of jurisdiction having
been waived by the United States so far as it was within its power
to do so, and the relief sought being to prevent the voluntary
action of the trust company, and not in respect to the assessment
and collection of the tax, the court will proceed to judgment on
the merits.

															The doctrine of stare decisis is a salutary one, and is
to be adhered to on proper occasions, in respect of decisions
directly upon points in issue; but this court should not extend any
decision upon a constitutional question if it is convinced that
error in principle might supervene.

															In the cases referred to in the opinion of the court in this
case, beginning with Hylton v. United
States , 3 Dall. 171, (February Term, 1796) and
ending with Springer v. United States, 102 U.
S. 586 (October Term, 1880), taxes on land are conceded
to be direct taxes, and in none of them is it determined that a tax
on rent or income derived from land is not a tax on land.

															A tax on the rents or income of real estate is a direct tax
within the meaning of that term as used in the Constitution of the
United States.

															A tax upon income derived from the interest of bonds issued by a
municipal corporation is a tax upon the power of the State and its
instrumentalities to borrow money, and is consequently repugnant to
the Constitution of the United States.

															So much of the act "to reduce taxation, to provide revenue for
the government, and for other purposes," 28 Stat. 509, c. 349, as
provides for levying taxes upon rents or income derived from real
estate, or from the interest on municipal bonds, is repugnant to
the Constitution of the United States, and is invalid.

															Upon each of the other questions argued at the bar, to-wit: 1,
whether the void provision as to rents and income from real estate
invalidates Page 157 U. S. 430 the whole act? 2, whether, as to the income from personal
property a such, the act is unconstitutional as laying direct
taxes? 3, whether any part of the tax, if not considered as a
direct tax, is invalid for want of uniformity on either of the
grounds suggested? -- the Justices who heard the argument are
equally divided, and, therefore, no opinion is expressed.

															This was a bill filed by Charles Pollock, a citizen of the State
of Massachusetts, on behalf of himself and all other stockholders
of the defendant company similarly situated against the Farmers'
Loan and Trust Company, a corporation of the State of New York, and
its directors, alleging that the capital stock of the corporation
consisted of one million dollars, divided into forty thousand
shares of the par value of twenty-five dollars each; that the
company was authorized to invest its assets in public stocks and
bonds of the United States, of individual States, or of any
incorporated city, or county, or in such real or personal
securities as it might deem proper, and also to take, accept, and
execute all such trusts of every description as might be committed
to it by any person or persons or any corporation, by grant,
assignment, devise, or bequest, or by order of any court of record
of New York, and to receive and take any real estate which might be
the subject of such trust; that the property and assets of the
company amounted to more than five million dollars, of which at
least one million was invested in real estate owned by the company
in fee; at least two millions in bonds of the city of New York, and
at least one million in the bonds and stocks of other corporations
of the United States; that the net profits or income of the
defendant company during the year ending December 31, 1894,
amounted to more than the sum of $300,000 above its actual
operating and business expenses, including losses and interest on
bonded and other indebtedness; that, from its real estate, the
company derived an income of $50,000 per annum, after deducting all
county, state, and municipal taxes, and that the company derived an
income or profit of about $60,000 per annum from its investments in
municipal bonds.

															It was further alleged that, under and by virtue of the
powers Page 157 U. S. 431 conferred upon the company, it had from time to time taken and
executed, and was holding and executing, numerous trusts committed
to the company by many persons, copartnerships, unincorporated
associations, and corporations, by grant, assignment, devise, and
bequest, and by orders of various courts, and that the company now
held as trustee for many minors, individuals, copartnerships,
associations, and corporations, resident in the United States and
elsewhere, many parcels of real estate situated in the various
States of the United States, and amounting, in the aggregate, to a
value exceeding five millions of dollars, the rents and income of
which real estate collected and received by said defendant in its
fiduciary capacity annually exceeded the sum of two hundred
thousand dollars.

															The bill also averred that complainant was and had been since
May 20, 1892, the owner and registered holder of ten shares of the
capital stock of the company, of a value exceeding the sum of
$5,000; that the capital stock was divided among a large number of
different persons who, as such stockholders, constituted a large
body; that the bill was filed for an object common to them all, and
that he therefore, brought suit not only in his own behalf as a
stockholder of the company, but also as a representative of and on
behalf of such of the other stockholders similarly situated and
interested as might choose to intervene and become parties.

															It was then alleged that the management of the stock, property,
affairs, and concerns of the company was committed under its acts
of incorporation to its directors, and charged that the company and
a majority of its directors claimed and asserted that, under and by
virtue of the alleged authority of the provisions of an act of
Congress of the United States entitled, "An act to reduce taxation,
to provide revenue for the government, and for other purposes,"
passed August 15, 1894, the company was liable, and that they
intended to pay to the United States before July 1, 1895, a tax of
two percentum on the net profits of said company for the year
ending December 31, 1894, above actual operating and business
expenses, including the income derived from its real estate and Page 157 U. S. 432 its bonds of the city of New York, and that the directors
claimed and asserted that a similar tax must be paid upon the
amount of the incomes, gains, and profits, in excess of $4000, of
all minors and others for whom the company was acting in a
fiduciary capacity. And further, that the company and its directors
had avowed their intention to make and file with the collector of
internal revenue for the second district of the city of New York a
list, return, or statement showing the amount of the net income of
the company received during the year 1894 as aforesaid, and
likewise to make and render a list or return to said collector of
internal revenue, prior to that date, of the amount of the income,
gains, and profits of all minors and other persons having incomes
in excess of $300, for whom the company was acting in a fiduciary
capacity.

															The bill charged that the provisions in respect of said alleged
income tax incorporated in the act of Congress were
unconstitutional, null, and void, in that the tax was a direct tax
in respect of the real estate held and owned by the company in its
own right and in its fiduciary capacity as aforesaid by being
imposed upon the rents, issues, and profits of said real estate,
and was likewise a direct tax in respect of its personal property
and the personal property held by it for others for whom it acted
in its fiduciary capacity as aforesaid, which direct taxes were not
in and by said act apportioned among the several States as required
by section 2 of article I of the Constitution, and that, if the
income tax so incorporated in the act of Congress aforesaid were
held not to be a direct tax, nevertheless its provisions were
unconstitutional, null and void in that they were not uniform
throughout the United States as required in and by section of
article I of the Constitution of the United States, upon many
grounds and in many particulars specifically set forth.

															The bill further charged that the income tax provisions of the
act were likewise unconstitutional in that they imposed a tax on
incomes not taxable under the Constitution and likewise income
derived from the stocks and bonds of the States of the United
States and counties and municipalities therein, Page 157 U. S. 433 which stocks and bonds are among the means and instrumentalities
employed for carrying on their respective governments, and are not
proper subjects of the taxing power of Congress, and which States
and their counties and municipalities are independent of the
general government of the United States, and the respective stocks
and bonds of which are, together with the power of the States to
borrow in any form, exempt from Federal taxation.

															Other grounds of unconstitutionality were assigned, and the
violation of articles IV and V of the Constitution asserted.

															The bill further averred that the suit was not a collusive one
to confer on a court of the United States jurisdiction of the case
of which it would not otherwise have cognizance, and that
complainant had requested the company and its directors to omit and
refuse to pay said income tax, and to contest the constitutionality
of said act, and to refrain from voluntarily making lists, returns,
and statements on its own behalf and on behalf of the minors and
other persons for whom it was acting in a fiduciary capacity, and
to apply to a court of competent jurisdiction to determine its
liability under said act, but that the company and a majority of
its directors, after a meeting of the directors at which the matter
and the request of complainant were formally laid before them for
action, had refused and still refuse, and intend omitting to comply
with complainant's demand, and had resolved and determined, and
intended to comply with all and singular the provisions of the said
act of Congress, and to pay the tax upon all its net profits or
income as aforesaid, including its rents from real estate and its
income from municipal bonds, and a copy of the refusal of the
company was annexed to the complaint.

															It was also alleged that, if the company and its directors, as
they proposed and had declared their intention to do, should pay
the tax out of its gains, income, and profits, or out of the gains,
income, and profits of the property held by it in its fiduciary
capacity, they will diminish the assets of the company and lessen
the dividends thereon and the value of the shares; that voluntary
compliance with the income tax provisions would expose the company
to a multiplicity of suits, not only by and Page 157 U. S. 434 on behalf of its numerous shareholders, but by and on behalf of
numerous minors and others for whom it acts in a fiduciary
capacity, and that such numerous suits would work irreparable
injury to the business of the company, and subject it to great and
irreparable damage, and to liability to the beneficiaries
aforesaid, to the irreparable damage of complainant and all its
shareholders.

															The bill further averred that this was a suit of a civil nature
in equity; that the matter in dispute exceeded, exclusive of costs,
the sum of five thousand dollars, and arose under the Constitution
or laws of the United States, and that there was furthermore a
controversy between citizens of different States

															The prayer was that it might be adjudged and decreed that the
said provisions known as the income tax incorporated in said act of
Congress passed August 1, 1894, are unconstitutional, null, and
void; that the defendants be restrained from voluntarily complying
with the provisions of said act and making the lists, returns, and
statements above referred to, or paying the tax aforesaid, and for
general relief.

															The defendants demurred on the ground of want of equity, and the
cause having been brought on to be heard upon the bill and demurrer
thereto, the demurrer was sustained and the bill of complaint
dismissed with costs, whereupon the record recited that the
constitutionality of a law of the United States was drawn in
question, and an appeal was allowed directly to this court.

															An abstract of the act in question will be found in the margin. * Page 157 U. S. 435 By the third clause of section two of Article I of the
Constitution, it was provided:

															"Representatives and direct taxes shall Page 157 U. S. 436 be apportioned among the several States which may be included
within this Union, according to their respective numbers, Page 157 U. S. 437 which shall be determined by adding to the whole number of free
persons, including those bound to service for term of Page 157 U. S. 438 years, and excluding Indians not taxed, three-fifths of all
other persons."

															This was amended by the second section of the Page 157 U. S. 439 Fourteenth Article, declared ratified July 28, 1868, so that the
whole number of persons in each State should be counted, Page 157 U. S. 440 Indians not taxed excluded, and the provision, as thus amended,
remains in force. Page 157 U. S. 441 The actual enumeration was prescribed to be made within three
years after the first meeting of Congress and within every
subsequent term of ten years, in such manner as should be
directed.

															Section 7 requires "all bills for raising revenue shall
originate in the House of Representatives."

															The first clause of section 8 reads thus:

															"The Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defence and general welfare of the United States; but all duties,
imposts and excises shall be uniform throughout the United
States."

															And the third clause thus:

															"To regulate commerce with foreign nations, and among the
several States, and with the Indian tribes."

															The fourth, fifth, and sixth clauses of section are as
follows:

															"No capitation, or other direct, tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken."

															"No tax or duty shall be laid on articles exported from any
State."

															"No preference shall be given by any regulation of commerce or
revenue to the ports of one State over those of another; nor shall
vessels bound to, or from, one State, be obliged to enter, clear,
or pay duties in another."

															It is also provided by the second clause of section 10 that

															"no State shall, without the consent of the Congress, lay any
imposts or duties on imports or exports, except what may be Page 157 U. S. 442 absolutely necessary for executing its inspection laws;"

															and, by the third clause, that "no State shall, without the
consent of Congress, lay any duty of tonnage."

															The first clause of section 9 provides:

															"The migration or importation of such persons as any of the
States now existing shall think proper to admit shall not be
prohibited by the Congress prior to the year one thousand eight
hundred and eight, but a tax or duty may be imposed on such
importations, not exceeding ten dollars for each person."

															Article V prescribes the mode for the amendment of the
Constitution, and concludes with this proviso:

															"Provided that no amendment which may be made prior to the year
one thousand eight hundred and eight shall in any manner affect the
first and fourth clauses in the ninth section of the first article.
" Page 157 U. S. 553 MR. CHIEF JUSTICE FULLER, after stating the case as above
reported. delivered the opinion of the court.

															The jurisdiction of a court of equity to prevent any threatened
breach of trust in the misapplication or diversion of the funds of
a corporation by illegal payments out of its capital or profits has
been frequently sustained. Dodge v.
Woolsey , 18 How. 331; Hawes v. Oakland, 104 U. S. 450 . Page 157 U. S. 554 As in Dodge v. Woolsey, this bill proceeds on the
ground that the defendants would be guilty of such breach of trust
or duty in voluntarily making returns for the imposition of, and
paying, an unconstitutional tax, and also on allegations of
threatened multiplicity of suits and irreparable injury.

															The objection of adequate remedy at law was not raised below,
nor is it now raised by appellees, if it could be entertained at
all at this stage of the proceedings; and, so far as it was within
the power of the government to do so, the question of jurisdiction,
for the purposes of the case, was explicitly waived on the
argument. The relief sought was in respect of voluntary action by
the defendant company, and not in respect of the assessment and
collection themselves. Under these circumstances, we should not be
justified in declining to proceed to judgment upon the merits. Pelton. v. National Bank, 101 U.
S. 143 , 101 U. S. 148 ; Cummings v. National Bank, 101 U.
S. 153 101 U. S. 157 ; Reynes v. Dumont, 130 U. S. 354 .

															Since the opinion in Marbury v.
Madison , 1 Cranch 137, 5 U. S. 177 , was
delivered, it has not been doubted that it is within judicial
competency, by express provisions of the Constitution or by
necessary inference and implication, to determine whether a given
law of the United States is or is not made in pursuance of the
Constitution, and to hold it valid or void accordingly. "If," said
Chief Justice Marshall,

															"both the law and the Constitution apply to a particular case,
so that the court must either decide that case conformably to the
law, disregarding the Constitution; or conformably to the
Constitution, disregarding the law; the court must determine which
of these conflicting rules governs the case. This is of the very
essence of judicial duty."

															And the Chief Justice added that the doctrine

															"that courts must close their eyes on the Constitution, and see
only the law . . . would subvert the very foundation of all written
constitutions."

															Necessarily, the power to declare a law unconstitutional is
always exercised with reluctance; but the duty to do so, in a
proper case, cannot be declined, and must be discharged in
accordance with the deliberate judgment of the tribunal in which
the validity of the enactment is directly drawn in question. Page 157 U. S. 555 The contention of the complainant is:

															First. That the law in question, in imposing a tax on the income
or rents of real estate, imposes a tax upon the real estate itself,
and in imposing a tax on the interest or other income of bonds or
other personal property held for the purposes of income or
ordinarily yielding income, imposes a tax upon the personal estate
itself; that such tax is a direct tax, and void because imposed
without regard to the rule of apportionment, and that, by reason
thereof, the whole law is invalidated.

															Second. That the law is invalid because imposing indirect taxes
in violation of the constitutional requirement of uniformity, and
therein also in violation of the implied limitation upon taxation
that all tax laws must apply equally, impartially, and uniformly to
all similarly situated. Under the second head, it is contended that
the rule of uniformity is violated in that the law taxes the income
of certain corporations, companies, and associations, no matter how
created or organized, at a higher rate than the incomes of
individuals or partnerships derived from precisely similar property
or business; in that it exempts from the operation of the act and
from the burden of taxation numerous corporations, companies, and
associations having similar property and carrying on similar
business to those expressly taxed, in that it denies to individuals
deriving their income from shares in certain corporations,
companies, and associations the benefit of the exemption of $4,000
granted to other persons interested in similar property and
business; in the exemption of $4,000; in the exemption of building
and loan associations, savings banks, mutual life, fire, marine,
and accident insurance companies, existing solely for the pecuniary
profit of their members; these and other exemptions being alleged
to be purely arbitrary and capricious, justified by no public
purpose, and of such magnitude as to invalidate the entire
enactment, and in other particulars.

															Third. That the law is invalid so far as imposing a tax upon
income received from state and municipal bonds.

															The Constitution provides that representatives and direct Page 157 U. S. 556 taxes shall be apportioned among the several States according to
numbers, and that no direct tax shall be laid except according to
the enumeration provided for, and also that all duties, imposts,
and excises shall be uniform throughout the United States.

															The men who framed and adopted that instrument had just emerged
from the struggle for independence whose rallying cry had been that
"taxation and representation go together."

															The mother country had taught the colonists, in the contests
waged to establish that taxes could not be imposed by the sovereign
except as they were granted by the representatives of the realm,
that self-taxation constituted the main security against
oppression. As Burke declared in his speech on Conciliation with
America, the defenders of the excellence of the English
constitution

															"took infinite pains to inculcate, as a fundamental principle,
that, in all monarchies, the people must, in effect, themselves,
mediately or immediately, possess the power of granting their own
money, or no shadow of liberty could subsist."

															The principle was that the consent of those who were expected to
pay it was essential to the validity of any tax.

															The States were about, for all national purposes embraced in the
Constitution, to become one, united under the same sovereign
authority and governed by the same laws. But as they still retained
their jurisdiction over all persons and things within their
territorial limits, except where surrendered to the general
government or restrained by the Constitution. they were careful to
see to it that taxation and representation should go together, so
that the sovereignty reserved should not be impaired, and that,
when Congress, and especially the House of Representatives, where
it was specifically provided that all revenue bills must originate,
voted a tax upon property, it should be with the consciousness, and
under the responsibility, that, in so doing, the tax so voted would
proportionately fall upon the immediate constituents of those who
imposed it.

															More than this, by the Constitution, the States not only gave to
the action the concurrent power to tax persons and Page 157 U. S. 557 property directly, but they surrendered their own power to levy
taxes on imports and to regulate commerce. All the thirteen were
seaboard States, but they varied in maritime importance, and
differences existed between them in population, in wealth, in the
character of property and of business interests. Moreover, they
looked forward to the coming of new States from the great West into
the vast empire of their anticipations. So when the wealthier
States, as between themselves and their less favored associates,
and all as between themselves and those who were to come, gave up
for the common good the great sources of revenue derived through
commerce, they did so in reliance on the protection afforded by
restrictions on the grant of power.

															Thus, in the matter of taxation, the Constitution recognizes the
two great classes of direct and indirect taxes, and lays down two
rules by which their imposition must be governed, namely: the rule
of apportionment as to direct taxes, and the rule of uniformity as
to duties, imposts and excises.

															The rule of uniformity was not prescribed to the exercise of the
power granted by the first paragraph of section eight, to lay and
collect taxes, because the rule of apportionment as to taxes had
already been laid down in the third paragraph of the second
section.

															And this view was expressed by Mr. Chief Justice Chase in The License Tax
Cases , 5 Wall. 462, 72 U. S. 471 ,
when he said:

															"It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution, with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited, and thus
only it reaches every subject, and may be exercised at
discretion."

															And although there have been from time to time intimations that
there might be some tax which was not a direct tax nor included
under the words "duties, imposts and excises," such a tax, for more
than one hundred years of national existence, has as yet remained
undiscovered, notwithstanding the stress of particular
circumstances has invited thorough investigation into sources of
revenue. Page 157 U. S. 558 The first question to be considered is whether a tax on the
rents or income of real estate is a direct tax within the meaning
of the Constitution. Ordinarily, all taxes paid primarily by
persons who can shift the burden upon someone else, or who are
under no legal compulsion to pay them, are considered indirect
taxes; but a tax upon property holders in respect of their estates,
whether real or personal, or of the income yielded by such estates,
and the payment of which cannot be avoided, are direct taxes.
Nevertheless, it may be admitted that, although this definition of
direct taxes is prima facie correct, and to be applied in
the consideration of the question before us, yet that the
Constitution may bear a different meaning, and that such different
meaning must be recognized. But in arriving at any conclusion upon
this point, we are at liberty to refer to the historical
circumstances attending the framing and adoption of the
Constitution, as well as the entire frame and scheme of the
instrument, and the consequences naturally attendant upon the one
construction or the other.

															We inquire, therefore, what, at the time the Constitution was
framed and adopted, were recognized as direct taxes? What did those
who framed and adopted it understand the terms to designate and
include?

															We must remember that the fifty-five members of the
constitutional convention were men of great sagacity, fully
conversant with governmental problems, deeply conscious of the
nature of their task, and profoundly convinced that they were
laying the foundations of a vast future empire.

															"To many in the assembly, the work of the great French
magistrate on the 'Spirit of Laws,' of which Washington, with his
own hand, had copied an abstract by Madison, was the favorite
manual; some of them had made an analysis of all federal
governments in ancient and modern times, and a few were well versed
in the best English, Swiss, and Dutch writers on government. They
had immediately before them the example of Great Britain, and they
had a still better school of political wisdom in the republican
constitutions of their several States, which many of them had
assisted to frame."

															2 Bancroft's Hist.Const.

															The Federalist demonstrates the value attached by Hamilton, Page 157 U. S. 559 Madison, and Jay to historical experience, and shows that they
had made a careful study of many forms of government. Many of the
framers were particularly versed in the literature of the period,
Franklin, Wilson, and Hamilton, for example. Turgot had published
in 1764 his work on taxation, and in 1766 his essay on "The
Formation and Distribution of Wealth," while Adam Smith's "Wealth
of Nations" was published in 1776. Franklin, in 1766, had said upon
his examination before the House of Commons that:

															"An external tax is a duty laid on commodities imported; that
duty is added to the first cost and other charges on the commodity,
and, when it is offered to sale, makes a part of the price. If the
people do not like it at that price, they refuse it; they are not
obliged to pay it. But an internal tax is forced from the people
without their consent if not laid by their own representatives. The
stamp act says, we shall have no commerce, make no exchange of
property with each other, neither purchase nor grant, nor recover
debts; we shall neither marry nor make our wills, unless we pay
such and such sums; and thus it is intended to extort our money
from us or ruin us by the consequences of refusing to pay."

															16 Parl.Hist. 144.

															They were, of course, familiar with the modes of taxation
pursued in the several States. From the report of Oliver Wolcott,
when Secretary of the Treasury, on direct taxes, to the House of
Representatives, December 14, 1796, his most important state paper,
(Am.State Papers, 1 Finance 431) and the various state laws then
existing, it appears that, prior to the adoption of the
Constitution, nearly all the States imposed a poll tax, taxes on
land, on cattle of all kinds, and various kinds of personal
property, and that, in addition, Massachusetts, Connecticut,
Pennsylvania, Delaware, New Jersey, Virginia, and South Carolina
assessed their citizens upon their profits from professions,
trades, and employments.

															Congress, under the articles of confederation, had no actual
operative power of taxation. It could call upon the States for
their respective contributions or quotas as previously determined
on, but in case of the failure or omission of the States to furnish
such contribution, there were no means of Page 157 U. S. 560 compulsion, as Congress had no power whatever to lay any tax
upon individuals. This imperatively demanded a remedy, but the
opposition to granting the power of direct taxation in addition to
the substantially exclusive power of laying imposts and duties was
so strong that it required the convention, in securing effective
powers of taxation to the Federal government, to use the utmost
care and skill to so harmonize conflicting interests that the
ratification of the instrument could be obtained.

															The situation and the result are thus described by Mr. Chief
Justice Chase in Lane County v.
Oregon , 7 Wall. 71, 74 U. S. 76 :

															"The people of the United States constitute one nation, under
one government, and this government, within the scope of the powers
with which it is invested, is supreme. On the other hand, the
people of each State compose a State, having its own government,
and endowed with all the functions essential to separate and
independent existence. The States, disunited, might continue to
exist. Without the States in union, there could be no such
political body as the United States. Both the States and the United
States existed before the Constitution. The people, through that
instrument, established a more perfect union by substituting a
national government, acting, with ample power, directly upon the
citizens, instead of the confederate government, which acted with
powers, greatly restricted, only upon the States. But, in many
articles of the Constitution, the necessary existence of the
States, and, within their proper spheres, the independent authority
of the States, is distinctly recognized. To them, nearly the whole
charge of interior regulation is committed or left; to them and to
the people, all powers not expressly delegated to the national
government are reserved. The general condition was well stated by
Mr. Madison in the Federalist, thus:"

															"The Federal and state governments are, in fact, but different
agents and trustees of the people, constituted with different
powers and designated for different purposes."

															"Now, to the existence of the States, themselves necessary to
the existence of the United States, the power of taxation is
indispensable. It is an essential function of Page 157 U. S. 561 government. It was exercised by the colonies, and when the
colonies became States, both before and after the formation of the
confederation, it was exercised by the new governments. Under the
Articles of Confederation, the government of the United States was
limited in the exercise of this power to requisitions upon the
States, while the whole power of direct and indirect taxation of
persons and property, whether by taxes on polls, or duties on
imports, or duties on internal production, manufacture, or use, was
acknowledged to belong exclusively to the States, without any other
limitation than that of noninterference with certain treaties made
by Congress. The Constitution, it is true, greatly changed this
condition of things. It gave the power to tax, both directly and
indirectly, to the national government, and, subject to the one
prohibition of any tax upon exports and to the conditions of
uniformity in respect to indirect and of proportion in respect to
direct taxes, the power was given without any express reservation.
On the other hand, no power to tax exports, or imports except for a
single purpose and to an insignificant extent, or to lay any duty
on tonnage, was permitted to the States. In respect, however, to
property, business, and persons within their respective limits,
their power of taxation remained and remains entire. It is indeed a
concurrent power, and, in the case of a tax on the same subject by
both governments, the claim of the United States, as the supreme
authority, must be preferred; but, with this qualification, it is
absolute. The extent to which it shall be exercised, the subjects
upon which it shall be exercised, and the mode in which it shall be
exercised are all equally within the discretion of the legislatures
to which the States commit the exercise of the power. That
discretion is restrained only by the will of the people expressed
in the state constitutions or through elections, and by the
condition that it must not be so used as to burden or embarrass the
operations of the national government. There is nothing in the
Constitution which contemplates or authorizes any direct abridgment
of this power by national legislation. To the extent just
indicated, it is as complete in the States as the like Page 157 U. S. 562 power, within the limits of the Constitution, is
complete in Congress."

															On May 29, 1787, Charles Pinckney presented his draft of a
proposed constitution, which provided that the proportion of direct
taxes should be regulated by the whole number of inhabitants of
every description, taken in the manner prescribed by the
legislature, and that no tax should be paid on articles exported
from the United States. 1 Elliot 147, 148.

															Mr. Randolph's plan declared

															"that the right of suffrage in the national legislature ought to
be proportioned to the quotas of contribution, or to the number of
free inhabitants, as the one or the other may seem best in
different cases."

															1 Elliot 143.

															On June 15, Mr. Paterson submitted several resolutions, among
which was one proposing that the United States in Congress should
be authorized to make requisitions in proportion to the whole
number of white and other free citizens and inhabitants, including
those bound to servitude for a term of years, and three-fifths of
all other persons, except Indians not taxed. 1 Elliot 175, 176.

															On the ninth of July, the proposition that the legislature be
authorized to regulate the number of representatives according to
wealth and inhabitants was approved, and on the eleventh, it was
voted that "in order to ascertain the alterations that may happen
in the population and wealth of the several States, a census shall
be taken," although the resolution of which this formed a part was
defeated. Elliot (Madison Papers) 288, 295; 1 Elliot 200.

															On July 12, Gouverneur Morris moved to add to the clause
empowering the legislature to vary the representation according to
the amount of wealth and number of the inhabitants, a proviso that
taxation should be in proportion to representation, and, admitting
that some objections lay against his proposition which would be
removed by limiting it to direct taxation, since, with regard to
indirect taxes on exports and imports, and on consumption, the rule
would be inapplicable, varied his motion by inserting the word
"direct," whereupon it passed as follows: "Provided always that
direct taxation Page 157 U. S. 563 ought to be proportioned to representation." 5 Elliot (Madison
Papers) 302.

															Amendments were proposed by Mr. Ellsworth and Mr. Wilson to the
effect that the rule of contribution by direct taxation should be
according to the number of white inhabitants and three-fifths of
every other description, and that, in order to ascertain the
alterations in the direct taxation which might be required from
time to time, a census should be taken; the word wealth was struck
out of the clause, on motion of Mr. Randolph, and the whole
proposition, proportionate representation to direct taxation, and
both to the white and three-fifths of the colored inhabitants, and
requiring a census, was adopted.

															In the course of the debates, and after the motion of Mr.
Ellsworth that the first census be taken in three years after the
meeting of Congress had been adopted, Mr. Madison records: "Mr.
King asked what was the precise meaning of direct taxation. No one
answered." But Mr. Gerry immediately moved to amend by the
insertion of the clause that

															"from the first meeting of the legislature of the United States
until a census shall be taken, all moneys for supplying the public
treasury by direct taxation shall be raised from the several States
according to the number of their representatives respectively in
the first branch."

															This left for the time the matter of collection to the States.
Mr. Langdon objected that this would bear unreasonably hard against
New Hampshire, and Mr. Martin said that direct taxation should not
be used but in cases of absolute necessity, and then the States
would be the best judges of the mode. 5 Elliot (Madison Papers)
451, 453.

															Thus was accomplished one of the great compromises of the
Constitution, resting on the doctrine that the right of
representation ought to be conceded to every community on which tax
is to be imposed, but crystallizing it in such form as to allay
jealousies in respect of the future balance of power; to reconcile
conflicting views in respect of the enumeration of slaves, and to
remove the objection that, in adjusting a system of representation
between the States, regard should be had to their relative wealth,
since those who were to be most heavily Page 157 U. S. 564 taxed ought to have a proportionate influence in the
government.

															The compromise, in embracing the power of direct taxation,
consisted not simply in including part of the slaves in the
enumeration of population, but in providing that, as between State
and State, such taxation should be proportioned to representation.
The establishment of the same rule for the apportionment of taxes
as for regulating the proportion of representatives, observed Mr.
Madison in No. 54 of the Federalist, was by no means founded on the
same principle, for, as to the former, it had reference to the
proportion of wealth, and although in respect of that it was, in
ordinary cases, a very unfit measure, it "had too recently obtained
the general sanction of America not to have found a ready
preference with the convention," while the opposite interests of
the States, balancing each other, would produce impartiality in
enumeration. By prescribing this rule, Hamilton wrote (Federalist,
No. 36) that the door was shut "to partiality or oppression," and
"the abuse of this power of taxation to have been provided against
with guarded circumspection;" and obviously the operation of direct
taxation on every State tended to prevent resort to that mode of
supply except under pressure of necessity and to promote prudence
and economy in expenditure.

															We repeat that the right of the Federal government to directly
assess and collect its own taxes, at least until after requisitions
upon the States had been made and failed, was one of the chief
points of conflict, and Massachusetts, in ratifying, recommended
the adoption of an amendment in these words:

															"That Congress do not lay direct taxes but when the moneys
arising from the impost and excise are insufficient for the public
exigencies, nor then until Congress shall have first made a
requisition upon the States to assess, levy, and pay, their
respective proportions of such requisition, agreeably to the census
fixed in the said Constitution, in such way and manner as the
legislatures of the States shall think best."

															1 Elliot 322. And in this South Carolina, New York, New
Hampshire, and Rhode Island concurred. Id. 325, 326, 329,
336. Page 157 U. S. 565 Luther Martin, in his well known communication to the
legislature of Maryland in January, 1788, expressed his views
thus:

															"By the power to lay and collect taxes, they may proceed to
direct taxation on every individual, either by a capitation tax on
their heads or an assessment on their property. . . . Many of the
members, and myself in the number, thought that states were much
better judges of the circumstances of their citizens, and what sum
of money could be collected from them by direct taxation, and of
the manner in which it could be raised with the greatest ease and
convenience to their citizens, than the general government could
be, and that the general government ought not to have the power of
laying direct taxes in any case but in that of the delinquency of a
State."

															1 Elliot 34, 38, 369.

															Ellsworth and Sherman wrote the governor of Connecticut,
September 26, 1787, that it was probable

															"that the principal branch of revenue will be duties on imports.
What may be necessary to be raised by direct taxation is to be
apportioned on the several States, according to the number of their
inhabitants, and although Congress may raise the money by their own
authority, if necessary, yet that authority need not be exercised,
if each State will furnish its quota."

															1 Elliot 49.

															And Ellsworth, in the Connecticut convention, in discussing the
power of Congress to lay taxes, pointed out that all sources of
revenue, excepting the impost, still lay open to the States, and
insisted that it was

															"necessary that the power of the general legislature should
extend to all the objects of taxation, that government should be
able to command all the resources of the country, because no man
can tell what our exigencies may be. Wars have now become rather
wars of the purse than of the sword. Government must therefore be
able to command the whole power of the purse. . . . Direct taxation
can go but little way towards raising a revenue. To raise money in
this way, people must be provident; they must constantly be laying
up money to answer the demands of the collector. But you cannot
make people thus provident. If you would do anything to the
purpose, you must come in when they are spending, and take a part
with them. . . . Page 157 U. S. 566 All nations have seen the necessity and propriety of raising a
revenue by indirect taxation, by duties upon articles of
consumption. . . . In England, the whole public revenue is about
twelve millions sterling per annum. The land tax amounts to about
two millions; the window and some other taxes, to about two
millions more. The other eight millions are raised upon articles of
consumption. . . . This Constitution defines the extent of the
powers of the general government. If the general legislature should
at any time overleap their limits, the judicial department is a
constitutional check. If the United States go beyond their powers,
if they make a law which the Constitution does not authorize, it is
void, and the judicial power, the national judges, who, to secure
their impartiality, are to be made independent, will declare it to
be void."

															2 Elliot 191, 192, 196.

															In the convention of Massachusetts by which the Constitution was
ratified, the second section of article I being under
consideration, Mr. King said:

															"It is a principle of this Constitution that representation and
taxation should go hand in hand. . . . By this rule are
representation and taxation to be apportioned. And it was adopted
because it was the language of all America. According to the
confederation, ratified in 1781, the sums for the general welfare
and defence should be apportioned according to the surveyed lands,
and improvements thereon, in the several States; but that it hath
never been in the power of Congress to follow that rule, the
returns from the several States being so very imperfect."

															2 Elliot 36.

															Theophilus Parsons observed:

															"Congress have only a concurrent right with each State in laying
direct taxes, not an exclusive right, and the right of each State
to direct taxation is equally extensive and perfect as the right of
Congress." Id. 93. And John Adams, Dawes, Sumner, King, and
Sedgwick all agreed that a direct tax would be the last source of
revenue resorted to by Congress.

															In the New York convention, Chancellor Livingston pointed out
that, when the imposts diminished and the expenses of the
government increased, "they must have recourse to direct Page 157 U. S. 567 taxes; that is, taxes on land and specific duties." 2 Elliot
341. And Mr. Jay, in reference to an amendment that direct taxes
should not be imposed until requisition had been made and proved
fruitless, argued that the amendment would involve great
difficulties, and that it ought to be considered that direct taxes
were of two kinds, general and specific. Id. 380, 381.

															In Virginia, Mr. John Marshall said:

															"The objects of direct taxes are well understood; they are but
few; what are they? Lands, slaves, stock of all kinds, and a few
other articles of domestic property. . . . They will have the
benefit of the knowledge and experience of the state legislature.
They will see in what manner the legislature of Virginia collects
its taxes. . . . Cannot Congress regulate the taxes so as to be
equal on all parts of the community? Where is the absurdity of
having thirteen revenues? Will they clash with, or injure, each
other? If not, why cannot Congress make thirteen distinct laws, and
impose the taxes on the general objects of taxation in each State,
so as that all persons of the society shall pay equally, as they
ought?"

															3 Elliot 229, 235. At that time, in Virginia, lands were taxed,
and specific taxes assessed on certain specified objects. These
objects were stated by Secretary Wolcott to be taxes on lands,
houses in towns, slaves, stud horses, jackasses, other horses and
mules, billiard tables, four-wheel riding carriages, phaetons,
stage wagons, and riding carriages with two wheels, and it was
undoubtedly to these objects that the future Chief Justice
referred.

															Mr. Randolph said:

															"But in this new Constitution, there is a more just and
equitable rule fixed -- a limitation beyond which they cannot go.
Representatives and taxes go hand in hand; according to the one
will the other be regulated. The number of representatives is
determined by the number of inhabitants; they have nothing to do
but to lay taxes accordingly."

															3 Elliot 121.

															Mr. George Nicholas said:

															"the proportion of taxes is fixed by the number of inhabitants,
and not regulated by the extent of territory, or fertility of soil.
. . . Each State Page 157 U. S. 568 will know, from its population, its proportion of any general
tax. As it was justly observed by the gentleman over the way (Mr.
Randolph), they cannot possibly exceed that proportion; they are
limited and restrained expressly to it. The state legislatures have
no check of this kind. Their power is uncontrolled."

															3 Elliot 243, 244.

															Mr. Madison remarked that

															"they will be limited to fix the proportion of each State, and
they must raise it in the most convenient and satisfactory manner
to the public."

															3 Elliot 255.

															From these references, and they might be extended indefinitely,
it is clear that the rule to govern each of the great classes into
which taxes were divided was prescribed in view of the commonly
accepted distinction between them and of the taxes directly levied
under the systems of the States. And that the difference between
direct and indirect taxation was fully appreciated is supported by
the congressional debates after the government was organized.

															In the debates in the House of Representatives preceding the
passage of the act of Congress to lay "duties upon carriages for
the conveyance of persons," approved June 5, 1794 (1 Stat. 373, c.
45), Mr. Sedgwick said that

															"a capitation tax, and taxes on land and on property and income
generally were direct charges, as well in the immediate as ultimate
sources of contribution. He had considered those, and those only,
as direct taxes in their operation and effects. On the other hand,
a tax imposed on a specific article of personal property, and
particularly if objects of luxury, as in the case under
consideration, he had never supposed had been considered a direct
tax within the meaning of the Constitution."

															Mr. Dexter observed that his colleague

															"had stated the meaning of direct taxes to be a capitation tax,
or a general tax on all the taxable property of the citizens, and
that a gentleman from Virginia (Mr. Nicholas) thought the meaning
was that all taxes are direct which are paid by the citizen without
being recompensed by the consumer; but that, where the tax was only
advanced and repaid by the consumer, the tax was indirect. He
thought that both opinions were just, Page 157 U. S. 569 and not inconsistent, though the gentlemen had differed about
them. He thought that a general tax on all taxable property was a
direct tax, because it was paid without being recompensed by the
consumer."

															Annals 3d Congress 644, 646.

															At a subsequent day of the debate, Mr. Madison objected to the
tax on carriages as "an unconstitutional tax," but Fisher Ames
declared that he had satisfied himself that it was not a direct
tax, as "the duty falls not on the possession, but on the use."
Annals 730.

															Mr. Madison wrote to Jefferson on May 11, 1794:

															"And the tax on carriages succeeded, in spite of the
Constitution, by a majority of treaty, the advocates for the
principle being reinforced by the adversaries to luxuries. . . .
Some of the motives which they decoyed to their support ought to
premonish them of the danger. By breaking down the barriers of the
Constitution, and giving sanction to the idea of sumptuary
regulations, wealth may find a precarious defence in the shield of
justice. If luxury, as such, is to be taxed, the greatest
of all luxuries, says Paine, is a great estate. Even on the present
occasion, it has been found prudent to yield to a tax on transfers
of stock in the funds and in the banks."

															2 Madison's Writings 14.

															But Albert Gallatin, in his "Sketch of the Finances of the
United States," published in November, 1796, said:

															"The most generally received opinion, however, is that, by
direct taxes in the Constitution, those are meant which are raised
on the capital or revenue of the people; by indirect, such as are
raised on their expense. As that opinion is, in itself, rational
and conformable to the decision which has taken place on the
subject of the carriage tax, and as it appears important, for the
sake of preventing future controversies, which may be not more
fatal to the revenue than to the tranquility of the Union, that a
fixed interpretation should be generally adopted, it will not be
improper to corroborate it by quoting the author from whom the idea
seems to have been borrowed."

															He then quotes from Smith's Wealth of Nations, and
continues:

															"The remarkable coincidence of the clause of the Constitution
with this passage in using the word 'capitation' as a generic Page 157 U. S. 570 expression, including the different species of direct taxes, an
acceptation of the word peculiar, it is believed, to Dr. Smith,
leaves little doubt that the framers of the one had the other in
view at the time, and that they, as well as he, by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by
falling immediately upon the expense."

															3 Gallatin's Writings (Adams' ed.) 74, 75.

															The act provided in its first section

															"that there shall be levied, collected, and paid upon all
carriages for the conveyance of persons, which shall be kept by or
for any person for his or her own use, or to be let out to hire or
for the conveyance of passengers, the several duties and rates
following,"

															and then followed a fixed yearly rate on every coach, chariot,
phaeton, and coachee, every four-wheel and every two-wheel top
carriage, and upon every other two-wheel carriage, varying
according to the vehicle.

															In Hylton v. United
States , 3 Dall. 171, decided in March, 1796, this
court held the act to be constitutional, because not laying a
direct tax. Chief Justice Ellsworth and Mr. Justice Cushing took no
part in the decision, and Mr. Justice Wilson gave no reasons.

															Mr. Justice Chase said that he was inclined to think, but of
this he did not "give a judicial opinion," that

															"the direct taxes contemplated by the Constitution are only two,
to-wit, a capitation, or poll tax, simply, without regard to
property, profession, or any other circumstance, and a tax on
land;"

															and that he doubted "whether a tax, by a general assessment on
personal property within the United States is included within the
term direct tax." But he thought that

															"an annual tax on carriages for the conveyance of persons may be
considered as within the power granted to Congress to lay duties.
The term duty is the most comprehensive next to the generical term
tax, and practically, in Great Britain (whence we take our general
ideas of taxes, duties, imposts, excises, customs, etc.), embraces
taxes on stamps, tolls for passage, etc., and is not confined to
taxes on importation only., It seems to me that a tax on expense is
an indirect Page 157 U. S. 571 tax, and I think an annual tax on a carriage for the conveyance
of persons is of that kind, because a carriage is a consumable
commodity, and such annual tax on it is on the expense of the
owner."

															Mr. Justice Paterson said that

															"the Constitution declares that a capitation tax is a direct
tax, and, both in theory and practice, a tax on land is deemed to
be a direct tax. . . . It is not necessary to determine whether a
tax on the product of land be a direct or indirect tax. Perhaps the
immediate product of land, in its original and crude state, ought
to be considered as the land itself; it makes part of it; or else
the provision made against taxing exports would be easily eluded.
Land, independently of its produce, is of no value. . . . Whether
direct taxes, in the sense of the Constitution, comprehend any
other tax than a capitation tax and taxes on land is a questionable
point. . . . But as it is not before the court, it would be
improper to give any decisive opinion upon it."

															And he concluded: "All taxes on expenses or consumption are
indirect taxes. A tax on carriages is of this kind, and, of course,
is not a direct tax." This conclusion he fortified by reading
extracts from Adam Smith on the taxation of consumable
commodities.

															Mr. Justice Iredell said:

															"There is no necessity or propriety in determining what is or is
not a direct or indirect tax in all cases. Some difficulties may
occur which we do not at present foresee. Perhaps a direct tax, in
the sense of the Constitution, can mean nothing but a tax on
something inseparably annexed to the soil; something capable of
apportionment under all such circumstances. A land or a poll tax
may be considered of this description. . . . In regard to other
articles, there may possibly be considerable doubt. It is
sufficient, on the present occasion, for the court to be satisfied
that this is not a direct tax contemplated by the Constitution in
order to affirm the present judgment."

															It will be perceived that each of the justices, while suggesting
doubt whether anything but a capitation or a land tax was a direct
tax within the meaning of the Constitution, distinctly avoided
expressing an opinion upon that question or Page 157 U. S. 572 laying down a comprehensive definition, but confined his opinion
to the case before the court.

															The general line of observation was obviously influenced by Mr.
Hamilton's brief for the government, in which he said:

															"The following are presumed to be the only direct taxes:
capitation or poll taxes, taxes on lands and buildings, general
assessments, whether on the whole property of individuals or on
their whole real or personal estate. All else must of necessity be
considered as indirect taxes."

															7 Hamilton's Works (Lodge's ed.) 332.

															Mr. Hamilton also argued:

															"If the meaning of the word 'excise' is to be sought in a
British statute, it will be found to include the duty on carriages,
which is there considered as an 'excise.' . . . An argument results
from this, though not perhaps a conclusive one, yet, where so
important a distinction in the Constitution is to be realized, it
is fair to see the meaning of terms in the statutory language of
that country from which our jurisprudence is derived." Id., 333.

															If the question had related to an income tax, the reference
would have been fatal, as such taxes have been always classed by
the law of Great Britain as direct taxes.

															The above act was to be enforced for two years, but, before it
expired, was repealed, as was the similar act of May 28, 1796, c.
37, which expired August 31, 1801, 1 Stat. 478, 482.

															By the act of July 14, 1798, when a war with France was supposed
to be impending, a direct tax of two millions of dollars was
apportioned to the States respectively, in the manner prescribed,
which tax was to be collected by officers of the United States and
assessed upon "dwelling houses, lands, and slaves" according to the
valuations and enumerations to be made pursuant to the act of July
9, 1798, entitled "An act to provide for the valuation of lands and
dwelling houses and the enumeration of slaves within the United
States." 1 Stat. 597, c. 75; id., 580, c. 70. Under these
acts, every dwelling house was assessed according to a prescribed
value, and the sum of fifty cents upon every slave enumerated, and
the residue of the sum apportioned was directed to be assessed upon
the lands within each State according to the valuation Page 157 U. S. 573 made pursuant to the prior act and at such rate percentum as
would be sufficient to produce said remainder. By the act of August
2, 1813, a direct tax of three millions of dollars was laid and
apportioned to the States respectively, and reference had to the
prior act of July 22, 1813, which provided that, whenever a direct
tax should be laid by the authority of the United States, the same
should be assessed and laid

															"on the value of all lands, lots of ground with their
improvements, dwelling houses, and slaves, which several articles
subject to taxation shall be enumerated and valued by the
respective assessors at the rate each of them is worth in
money."

															3 Stat. 3, c. 37; id., 22, c. 16. The act of January 9,
1815, laid a direct tax of six millions of dollars, which was
apportioned, assessed, and laid as in the prior act on all lands,
lots of grounds with their improvements, dwelling houses, and
slaves. These acts are attributable to the war of 1812.

															The act of August, 1861 (12 Stat. 292, 294, c. 4), imposed a tax
of twenty millions of dollars, which was apportioned and to be
levied wholly on real estate, and also levied taxes on incomes
whether derived from property or profession, trade or vocation (12
Stat. 309), and this was followed by the acts of July 1, 1862 (12
Stat. 432, 473, c. 119), March 3, 1863 (12 Stat. 713, 723, c. 74),
June 30, 1864 (13 Stat. 223, 281, c. 173), March 3, 1863 (13 Stat.
469, 479, c. 78), March 10, 1866 (14 Stat. 4, c. 1), July 13, 1866
(14 Stat. 98, 137, c. 184), March 2, 1867 (14 Stat. 471, 477, c.
169), and July 14, 1870 (16 Stat. 256, c. 255). The differences
between the latter acts and that of August 1, 1894, call for no
remark in this connection. These acts grew out of the war of the
rebellion, and were, to use the language of Mr. Justice Miller,

															"part of the system of taxing incomes, earnings, and profits
adopted during the late war and abandoned as soon after that war
was ended as it could be done safely." Railroad Company v. Collector, 100 U.
S. 95 , 100 U. S.
98 .

															From the foregoing, it is apparent: 1. That the distinction
between direct and indirect taxation was well understood by the
framers of the Constitution and those who adopted it. 2. That,
under the state systems of taxation, all taxes on Page 157 U. S. 574 real estate or personal property or the rents or income thereof
were regarded as direct taxes. 3. That the rules of apportionment
and of uniformity were adopted in view of that distinction and
those systems. 4. That whether the tax on carriages was direct or
indirect was disputed, but the tax was sustained as a tax on the
use and an excise. 5. That the original expectation was that the
power of direct taxation would be exercised only in extraordinary
exigencies, and down to August 1894, this expectation has been
realized. The act of that date was passed in a time of profound
peace, and if we assume that no special exigency called for unusual
legislation, and that resort to this mode of taxation is to become
an ordinary and usual means of supply, that fact furnishes an
additional reason for circumspection and care in disposing of the
case.

															We proceed then to examine certain decisions of this court under
the acts of 1861 and following years in which it is claimed that
this court has heretofore adjudicated that taxes like those under
consideration are not direct taxes and subject to the rule of
apportionment, and that we are bound to accept the rulings thus
asserted to have been made as conclusive in the premises. Is this
contention well founded as respects the question now under
examination? Doubtless the doctrine of stare decisis is a
salutary one, and to be adhered to on all proper occasions, but it
only arises in respect of decisions directly upon the points in
issue.

															The language of hie Justice Marshall, in Cohens v.
Virginia , 6 Wheat. 264, 19 U. S. 399 ,
may profitably again be quoted:

															"It is a maxim not to be disregarded that general expressions,
in every opinion, are to be taken in connection with the case in
which those expressions are used. If they go beyond the case, they
may be respected, but ought not to control the judgment in a
subsequent suit when the very point is presented for decision. The
reason for this maxim is obvious. The question actually before the
court is investigated with care and considered in its full extent.
Other principles, which may serve to illustrate it, are considered
in their relation to the case decided, but their possible bearing
on all other cases is seldom completely investigated. " Page 157 U. S. 575 So, in Carroll v. Lessee of
Carroll , 16 How. 275, 57 U. S. 286 ,
where a statute of the State of Maryland came under review, Mr
Justice Curtis said:

															"If the construction put by the court of a State upon one of its
statutes was not a matter in judgment, if it might have been
decided either way without affecting any right brought into
question, then, according to the principles of the common law, an
opinion on such a question is not a decision. To make it so, there
must have been an application of the judicial mind to the precise
question necessary to be determined to fix the rights of the
parties and decide to whom the property in contestation belongs.
And therefore this court, and other courts organized under the
common law, has never held itself bound by any part of an opinion,
in any case, which was not needful to the ascertainment of the
right or title in question between the parties."

															Nor is the language of Mr. Chief Justice Taney inapposite, as
expressed in The Genesee
Chief , 12 How. 443, 53 U. S. 455 ,
wherein it was held that the lakes and navigable waters connecting
them are within the scope of admiralty and maritime jurisdiction as
known and understood in the United States when the Constitution was
adopted, and the preceding case of The Thomas
Jefferson , 10 Wheat. 428, was overruled. The Chief
Justice said:

															"It was under the influence of these precedents and this usage
that the case of The Thomas Jefferson , 10
Wheat. 428, was decided in this court, and the jurisdiction of the
courts of admiralty of the United States declared to be limited to
the ebb and flow of the tide. The Steamboat Orleans v.
Phoebus , 11 Pet. 175, afterwards followed this
case, merely as a point decided. It is the decision in the case of The Thomas Jefferson which mainly embarrasses the court in
the present inquiry. We are sensible of the great weight to which
it is entitled. But, at the same time, we are convinced that, if we
follow it, we follow an erroneous decision into which the court
fell when the great importance of the question as it now presents
itself could not be foreseen, and the subject did not therefore
receive that deliberate consideration which at this time would have
been given to it by the eminent men who presided here when that
case was decided. Page 157 U. S. 576 For the decision was made in 1825, when the commerce on the
rivers of the West and on the Lakes was in its infancy and of
little importance, and but little regarded compared with that of
the present day. Moreover, the nature of the questions concerning
the extent of the admiralty jurisdiction which have arisen in this
court were not calculated to call its attention particularly to the
one we are now considering."

															Manifestly, as this court is clothed with the power, and
entrusted with the duty, to maintain the fundamental law of the
Constitution, the discharge of that duty requires it not to extend
any decision upon a constitutional question if it is convinced that
error in principle might supervene.

															Let us examine the cases referred to in the light of these
observations.

															In Pacific Insurance Co. v.
Soule , 7 Wall. 433, the validity of a tax which was
described as "upon the business of an insurance company" was
sustained on the ground that it was "a duty or excise," and came
within the decision in Hylton's case. The arguments for
the insurance company were elaborate, and took a wide range, but
the decision rested on narrow ground, and turned on the distinction
between an excise duty and a tax strictly so termed, regarding the
former a charge for a privilege, or on the transaction of business,
without any necessary reference to the amount of property belonging
to those on whom the charge might fall, although it might be
increased or diminished by the extent to which the privilege was
exercised or the business done. This was in accordance with Society for Savings v.
Coite , 6 Wall. 594; Provident
Institution v. Massachusetts , 6 Wall. 611, and Hamilton Company v.
Massachusetts , 6 Wall. 632, in which cases there
was a difference of opinion on the question whether the tax under
consideration was a tax on the property, and not upon the franchise
or privilege. And see 70 U. S. The
Assessors, 3 Wall. 573; Home Insurance Co. v. New
York, 134 U. S. 594 ; Pullman Co. v. Pennsylvania, 141 U. S.
18 .

															In Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 544 , 75 U. S. 546 , a
tax was laid on the circulation of state banks or national banks
paying out the notes of individuals or state banks, and it was Page 157 U. S. 577 held that it might well be classed under the head of duties, and
as falling within the same category as Soule's case, 8 Wall. 547. It was declared to be of the same nature as
excise taxation on freight receipts, bills of lading, and passenger
tickets issued by a railroad company. Referring to the discussions
in the convention which framed the Constitution, Mr. Chief Justice
Chase observed that what as said there

															"doubtless shows uncertainty as to the true meaning of the term
direct tax; but it indicates also an understanding that direct
taxes were such as may be levied by capitation, and on lands and
appurtenances; or, perhaps, by valuation and assessment of personal
property upon general lists. For these were the subjects from which
the States at that time usually raised their principal
supplies."

															And in respect of the opinions in Hylton's case, the
Chief Justice said:

															"It may further be taken as established upon the testimony of
Paterson, that the words direct taxes, as used in the Constitution,
comprehended only capitation taxes and taxes on land, and perhaps
taxes on personal property by general valuation and assessment of
the various descriptions possessed within the several States."

															In National Bank v. United States, 101 U. S.
1 , involving the constitutionality of § 3413 of the
Revised Statutes, enacting that

															"every national banking association, state bank, or banker, or
association, shall pay a tax of ten percentum on the amount of
notes of any town, city, or municipal corporation, paid out by
them," Veazie Bank v. Fenno was cited with approval to the
point that Congress, having undertaken to provide a currency for
the whole country, might, to secure the benefit of it to the
people, restrain, by suitable enactments, the circulation as money
of any notes not issued under its authority, and Mr. Chief Justice
Waite, speaking for the court, said: " The tax thus laid is not on
the obligation, but on its use in a particular way." Scholey v.
Rew , 3 Wall. 331, was the case of a succession tax
which the court held to be

															"plainly an excise tax or duty upon the devolution of the estate
or the right to become beneficially entitled to the same, or the
income thereof, in Page 157 U. S. 578 possession or expectancy."

															It was like the succession tax of a State, held constitutional
in Mager v.
Grima , 8 How. 490, and the distinction between the
power of a State and the power of the United States to regulate the
succession of property was not referred to, and does not appear to
have been in the mind of the court. The opinion stated that the act
of Parliament from which the particular provision under
consideration was borrowed had received substantially the same
construction, and cases under that act hold that a succession duty
is not a tax upon income or upon property, but on the actual
benefit derived by the individual, determined as prescribed. In
re Elwes, 3 H. & N. 719; Attorney General v.
Sefton, 2 H. & C. 362; S.C. (H.L.) 3 H. & C.
1023; 11 H.L.Cas. 257..

															In Railroad Company v. Collector, 100 U.
S. 595 , 100 U. S. 596 ,
the validity of a tax collected of a corporation upon the interest
paid by it upon its bonds was held to be "essentially an excise on
the business of the class of corporations mentioned in the
statute." And Mr. Justice Miller, in delivering the opinion,
said:

															"As the sum involved in this suit is small, and the law under
which the tax in question was collected has long since been
repealed, the case is of little consequence as regards any
principle involved in it as a rule of future action."

															All these cases are distinguishable from that in hand, and this
brings us to consider that of Springer v. United States, 102 U. S. 586 , 102 U. S. 602 ,
chiefly relied on and urged upon us as decisive.

															That was an action of ejectment brought on a tax deed issued to
the United States on sale of defendant's real estate for income
taxes. The defendant contended that the deed was void because the
tax was a direct tax, not levied in accordance with the
Constitution. Unless the tax were wholly invalid, the defence
failed.

															The statement of the case in the report shows that Springer
returned a certain amount as his net income for the particular
year, but does not give the details of what his income, gains, and
profits consisted in.

															The original record discloses that the income was not Page 157 U. S. 579 derived in any degree from real estate, but was in part
professional as attorney at law and the rest interest on United
States bonds. It would seem probable that the court did not feel
called upon to advert to the distinction between the latter and the
former source of income, as the validity of the tax as to either
would sustain the action.

															The opinion thus concludes:

															"Our conclusions are that direct taxes, within the
meaning of the Constitution, are only capitation taxes, as
expressed in that instrument, and taxes on real estate, and that
the tax of which the plaintiff in error complains is within the
category of an excise or duty."

															While this language is broad enough to cover the interest as
well as the professional earnings, the case would have been more
significant as a precedent if the distinction had been brought out
in the report and commented on in arriving at judgment, for a tax
on professional receipts might be treated as an excise or duty, and
therefore indirect, when a tax on the income of personalty might be
held to be direct.

															Be this as it may, it is conceded in all these cases, from that
of Hylton to that of Springer, that taxes on land are direct taxes,
and in none of them is it determined that taxes on rents or income
derived from land are not taxes on land.

															We admit that it may not unreasonably be said that logically, if
taxes on the rents, issues and profits of real estate are
equivalent to taxes on real estate, and are therefore direct taxes,
taxes on the income of personal property as such are equivalent to
taxes on such property, and therefore direct taxes. But we are
considering the rule stare decisis, and we must decline to
hold ourselves bound to extend the scope of decisions -- none of
which discussed the question whether a tax on the income from
personalty is equivalent to a tax on that personalty, but all of
which held real estate liable to direct taxation only -- so as to
sustain a tax on the income of realty on the ground of being an
excise or duty.

															As no capitation, or other direct, tax was to be laid otherwise
than in proportion to the population, some other direct tax than a
capitation tax (and it might well enough be argued some other tax
of the same kind as a capitation tax) must be Page 157 U. S. 580 referred to, and it has always been considered that a tax upon
real estate eo nomine or upon its owners in respect
thereof is a direct tax within the meaning of the Constitution. But
is there any distinction between the real estate itself or its
owners in respect of it and the rents or income of the real estate
coming to the owners as the natural and ordinary incident of their
ownership?

															If the Constitution had provided that Congress should not levy
any tax upon the real estate of any citizen of any State, could it
be contended that Congress could put an annual tax for five or any
other number of years upon the rent or income of the real estate?
And if, as the Constitution now reads, no unapportioned tax can be
imposed upon real estate, can Congress, without apportionment,
nevertheless impose taxes upon such real estate under the guise of
an annual tax upon its rents or income?

															As, according to the feudal law, the whole beneficial interest
in the land consisted in the right to take the rents and profits,
the general rule has always been, in the language of Coke, that

															"if a man seized of land in fee by his deed granteth to another
the profits of those lands, to have and to hold to him and his
heirs, and marketh livery secundum formam chartae, the
whole land itself doth pass. For what is the land but the profits
thereof?"

															Co.Lit. 45. And that a devise of the rents and profits or of the
income of lands passes the land itself both at law and in equity. 1
Jarm. on Wills (5th ed.) *98 and cases cited. ,

															The requirement of the Constitution is that no direct tax shall
be laid otherwise than by apportionment -- the prohibition is not
against direct taxes on land, from which the implication is sought
to be drawn that indirect taxes on land would be constitutional,
but it is against all direct taxes -- and it is admitted that a tax
on real estate is a direct tax. Unless, therefore, a tax upon rents
or income issuing out of lands is intrinsically so different from a
tax on the land itself that it belongs to a wholly different class
of taxes, such taxes must be regarded as falling within the same
category as a tax on real estate eo nomine. The name of
the tax is unimportant. Page 157 U. S. 581 The real question is, is there any basis upon which to rest the
contention that real estate belongs to one of the two great classes
of taxes, and the rent or income which is the incident of its
ownership belongs to the other? We are unable to perceive any
ground for the alleged distinction. An annual tax upon the annual
value or annual user of real estate appears to us the same in
substance as an annual tax on the real estate, which would be paid
out of the rent or income. This law taxes the income received from
land and the growth or produce of the land. Mr. Justice Paterson
observed in Hylton's case, "land, independently of its
produce, is of no value;" and certainly had no thought that direct
taxes were confined to unproductive land.

															If it be true that, by varying the form, the substance may be
changed, it is not easy to see that anything would remain of the
limitations of the Constitution, or of the rule of taxation and
representation, so carefully recognized and guarded in favor of the
citizens of each State. But constitutional provisions cannot be
thus evaded. It is the substance, and not the form, which controls,
as has indeed been established by repeated decisions of this court.
Thus, in Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 444 ,
it was held that the tax on the occupation of an importer was the
same as a tax on imports, and therefore void. And Chief Justice
Marshall said:

															"It is impossible to conceal from ourselves that this is varying
the form without varying the substance. It is treating a
prohibition which is general as if it were confined to a particular
mode of doing the forbidden thing. All must perceive that a tax on
the sale of an article imported only for sale is a tax on the
article itself."

															In Weston v.
Charleston , 2 Pet. 449, it was held that a tax on
the income of United States securities was a tax on the securities
themselves, and equally inadmissible. The ordinance of the city of
Charleston involved in that case was exceedingly obscure; but the
opinions of Mr. Justice Thompson and Mr. Justice Johnson, who
dissented, make it clear that the levy was upon the interest of the
bonds, and not upon the bonds, and they held that it was an income
tax, and, as Page 157 U. S. 582 such, sustainable; but the majority of the court, Chief Justice
Marshall delivering the opinion, overruled that contention.

															So, in Dobbins v.
Commissioners , 16 Pet. 435, it was decided that the
income from an official position could not be taxed if the office
itself was exempt.

															In Almy v.
California , 24 How. 169, it was held that a duty on
a bill of lading was the same thing as a duty on the article which
it represented; in Railroad v.
Jackson , 7 Wall. 262, that a tax upon the interest
payable on bonds was a tax not upon the debtor, but upon the
security, and in Cook v. Pennsylvania, 97 U. S.
566 , that a tax upon the amount of sales of goods made
by an auctioneer was a tax upon the goods sold.

															In Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326 , and Leloup v. Mobile, 127 U. S. 640 , it
was held that a tax on income received from interstate commerce was
a tax upon the commerce itself, and therefore unauthorized. And so,
although it is thoroughly settled that, where by way of duties laid
on the transportation of the subjects of interstate commerce, and
on the receipts derived therefrom, or on the occupation or business
of carrying it on.a tax is levied by a State on interstate
commerce, such taxation amounts to a regulation of such commerce,
and cannot be sustained, yet the property in a State belonging to a
corporation, whether foreign or domestic, engaged in foreign or
domestic commerce, may be taxed, and when the tax is substantially
a mere tax on property, and not one imposed on the privilege of
doing interstate commerce, the exaction may be sustained. "The
substance, and not the shadow, determines the validity of the
exercise of the power." Postal Telegraph Co. v. Adams, 155 U. S. 688 , 155 U. S.
698 .

															Nothing can be clearer than that what the Constitution intended
to guard against was the exercise by the general government of the
power of directly taxing persons and property within any State
through a majority made up from the other States. It is true that
the effect of requiring direct taxes to be apportioned among the
States in proportion to their population is necessarily that the
amount of taxes on the individual Page 157 U. S. 583 taxpayer in a State having the taxable subject matter to a
larger extent in proportion to its population than another State
has would be less than in such other State, but this inequality
must be held to have been contemplated, and was manifestly designed
to operate to restrain the exercise of the power of direct taxation
to extraordinary emergencies, and to prevent an attack upon
accumulated property by mere force of numbers.

															It is not doubted that property owners ought to contribute in
just measure to the expenses of the government. As to the States
and their municipalities, this is reached largely through the
imposition of direct taxes. As to the Federal government, it is
attained in part through excises and indirect taxes upon luxuries
and consumption generally, to which direct taxation may be added to
the extent the rule of apportionment allows. And, through one mode
or the other, the entire wealth of the country, real and personal,
may be made, as it should be, to contribute to the common defence
and general welfare.

															But the acceptance of the rule of apportionment was one of the
compromises which made the adoption of the Constitution possible,
and secured the creation of that dual form of government, so
elastic and so strong, which has thus far survived in unabated
vigor. If, by calling a tax indirect when it is essentially direct,
the rule of protection could be frittered away, one of the great
landmarks defining the boundary between the Nation and the States
of which it is composed would have disappeared, and with it one of
the bulwarks of private rights and private property.

															We are of opinion that the law in question, so far as it levies
a tax on the rents or income of real estate, is in violation of the
Constitution, and is invalid.

															Another question is directly presented by the record as to the
validity of the tax levied by the act upon the income derived from
municipal bonds. The averment in the bill is that the defendant
company owns two millions of the municipal bonds of the city of New
York, from which it derives an annual income of $60,000, and that
the directors of the company intend to return and pay the taxes on
the income so derived.

															The Constitution contemplates the independent exercise by Page 157 U. S. 584 the Nation and the State, severally, of their constitutional
powers.

															As the States cannot tax the powers, the operations, or the
property of the United States, nor the means which they employ to
carry their powers into execution, so it has been held that the
United States have no power under the Constitution to tax either
the instrumentalities or the property of a State.

															A municipal corporation is the representative of the State and
one of the instrumentalities of the state government. It was long
ago determined that the property and revenues of municipal
corporations are not subjects of Federal taxation. Collector
v. Day , 11 Wall. 113, 78 U. S. 124 ; United States v. Railroad
Company , 17 Wall. 322, 84 U. S. 332 .
In Collector v. Day, it was adjudged that Congress had no
power, even by an act taxing all incomes, to levy a tax upon the
salaries of judicial officers of a State, for reasons similar to
those on which it had been held in Dobbin v.
Commissioner , 16 Pet. 435, that a State could not
tax the salaries of officers of the United States. Mr. Justice
Nelson, in delivering judgment, said:

															"The general government, and the States, although both exist
within the same territorial limits, are separate and distinct
sovereignties, acting separately and independently of each other
within their respective spheres. The former in its appropriate
sphere is supreme; but the States within the limits of their powers
not granted, or, in the language of the tenth amendment,
'reserved,' are as independent of the general government as that
government within its sphere is independent of the States."

															This is quoted in Van Brocklin v. Tennessee, 117 U. S. 151 , 117 U. S. 178 ,
and the opinion continues:

															"Applying the same principles, this court, in United States v.
Railroad Company , 17 Wall. 322, held that a
municipal corporation within a State could not be taxed by the
United States on the dividends or interest of stock or bonds held
by it in a railroad or canal company, because the municipal
corporation was a representative of the State, created by the State
to exercise a limited portion of its powers of government, and
therefore its revenues, like those of the State itself, were not
taxable by the United States. The revenues thus adjudged to be
exempt from Federal taxation Page 157 U. S. 585 were not themselves appropriated to any specific public use, nor
derived from property held by the State or by the municipal
corporation for any specific public us, but were part of the
general income of that corporation, held for the public use in no
other sense than all property and income, belonging to it in its
municipal character, must be so held. The reasons for exempting all
the property and income of a State, or of a municipal corporation,
which is a political division of the State, from Federal taxation,
equally require the exemption of all the property and income of the
national government from state taxation."

															In Mercantile Bank v. New York, 131
U. S. 138 , 131 U. S.
169 ., this Court said:

															"Bonds issued by the State of New York, or under its authority
by its public municipal bodies, are means for carrying on the work
of the government, and are not taxable even by the United States,
and it is not a part of the policy of the government which issues
them to subject them to taxation for its own purposes."

															The question in Bonaparte v. Tax Court, 104 U.
S. 592 , was whether the registered public debt of one
State, exempt from taxation by that State or actually taxed there,
was taxable by another State when owned by a citizen of the latter,
and it was held that there was no provision of the Constitution of
the United States which prohibited such taxation. The States had
not covenanted that this could not be done, whereas, under the
fundamental law, as to the power to borrow money, neither the
United States, on the one hand, nor the States, on the other, can
interfere with that power as possessed by each and an essential
element of the sovereignty of each.

															The law under consideration provides "that nothing herein
contained shall apply to States, counties or municipalities." It is
contended that, although the property or revenues of the States or
their instrumentalities cannot be taxed, nevertheless the income
derived from state, county, and municipal securities can be taxed.
But we think the same want of power to tax the property or revenues
of the States or their instrumentalities exists in relation to a
tax on the income from their securities, and for the same reason,
and that reason Page 157 U. S. 586 is given by Chief Justice Marshall in Weston v.
Charleston , 2 Pet. 449, 27 U. S. 468 ,
where he said:

															"The right to tax the contract to any extent, when made, must
operate upon the power to borrow before it is exercised, and have a
sensible influence on the contract. The extent of this influence,
depends on the will of a distinct government. To any extent,
however inconsiderable, it is a burthen on the operations of
government. It may be carried to an extent which shall arrest them
entirely. . . . The tax on government stock is thought by this
court to be a tax on the contract, a tax on the power to borrow
money on the credit of the United States, and consequently to be
repugnant to the Constitution."

															Applying this language to these municipal securities, it is
obvious that taxation on the interest therefrom would operate on
the power to borrow before it is exercised, and would have a
sensible influence on the contract, and that the tax in question is
a tax on the power of the States and their instrumentalities to
borrow money, and consequently repugnant to the Constitution. Upon
each of the other questions argued at the bar, to-wit, 1, Whether
the void provisions as to rents and income from real estate
invalidated the whole act? 2, whether, as to the income from
personal property as such, the act is unconstitutional as laying
direct taxes? 3, Whether any part of the tax, if not considered as
a direct tax, is invalid for want of uniformity on either of the
grounds suggested? -- the justices who heard the argument are
equally divided, and, therefore no opinion is expressed. The result is that the decree of the Circuit Court is
reversed and the case remanded with directions to enter a decree in
favor of the complainant in respect only of the voluntary payment
of the tax on the rents and income of the real estate of the
defendant company, and of that which it holds in trust, and on the
income from the municipal bonds owned or so held by it. * By sections 27 to 37, inclusive, of the act of Congress
entitled "An act to reduce taxation, to provide revenue for the
government, and for other purposes," received by the President
August 15, 1894, and which, not having been returned by him to the
House in which it originated within the time prescribed by the
Constitution of the United States, became a law without approval
(28 Stat. 509, c. 349), it was provided that, from and after
January 1, 1895, and until January 1, 1900,

															"there shall be assessed, levied, collected, and paid annually
upon the gains, profits, and income received in the preceding
calendar year by every citizen of the United States, whether
residing at home or abroad, and every person residing therein,
whether said gains, profits, or income be derived from any kind of
property, rents, interest, dividends, or salaries, or from any
profession, trade, employment, or vocation carried on in the United
States or elsewhere, or from any other source whatever, a tax of
two percentum on the amount so derived over and above four thousand
dollars, and a like tax shall be levied, collected and paid
annually upon the gains, profits, and income from all property
owned and of every business, trade, or profession carried on in the
United States by persons residing without the United States. . .
."

															"SEC. 28. That in estimating the gains, profits, and income of
any person there shall be included all income derived from interest
upon notes, bonds, and other securities, except such bonds of the
United States the principal and interest of which are by the law of
their issuance exempt from all Federal taxation; profits realized
within the year from sales of real estate purchased within two
years previous to the close of the year for which income is
estimated; interest received or accrued upon all notes, bonds,
mortgages, or other forms of indebtedness bearing interest, whether
paid or not, if good and collectible, less the interest which has
become due from said person or which has been paid by him during
the year; the amount of all premium on bonds, notes, or coupons;
the amount of sales of livestock, sugar, cotton, wool, butter,
cheese, pork, beef, mutton, or other meats, hay, and grain, or
other vegetable or other productions, being the growth or produce
of the estate of such person, less the amount expended in the
purchase or production of said stock or produce, and not including
any part thereof consumed directly by the family; money and the
value of all personal property acquired by gift or inheritance; all
other gains, profits, and income derived from any source whatever
except that portion of the salary, compensation, or pay received
for services in the civil, military, naval, or other service of the
United States, including Senators, Representatives, and Delegates
in Congress, from which the tax has been deducted, and except that
portion of any salary upon which the employer is required by law to
withhold, and does withhold the tax and pays the same to the
officer authorized to receive it. In computing incomes the
necessary expenses actually incurred in carrying on any business,
occupation, or profession shall be deducted and also all interest
due or paid within the year by such person on existing
indebtedness. And all national, state, county, school, and
municipal taxes, not including those assessed against local
benefits, paid within the year shall be deducted from the gains,
profits, or income of the person who has actually paid the same,
whether such person be owner, tenant, or mortgagor; also losses
actually sustained during the year, incurred in trade or arising
from fires, storms, or shipwreck, and not compensated for by
insurance or otherwise, and debts ascertained to be worthless, but
excluding all estimated depreciation of values and losses within
the year on sales of real estate purchased within two years
previous to the year for which income is estimated: Provided, That no deduction shall be made for any amount
paid out for new buildings, permanent improvements, or betterments,
made to increase the value of any property or estate: Provided
further, That only one deduction of four thousand dollars
shall be made from the aggregate income of all the members of any
family, composed of one or both parents, and one or more minor
children, or husband and wife; that guardians shall be allowed to
make a deduction in favor of each and every ward, except that, in
case where two or more wards are comprised in one family, and have
joint property interests, the aggregate deduction in their favor
shall not exceed four thousand dollars: and provided
further, that in cases where the salary or other compensation
paid to any person in the employment or service of the United
States shall not exceed the rate of four thousand dollars per
annum, or shall be by fees, or uncertain or irregular in the amount
or in the time during which the same shall have accrued or been
earned, such salary or other compensation shall be included in
estimating the annual gains, profits, or income of the person to
whom the same shall have been paid, and shall include that portion
of any income or salary upon which a tax has not been paid by the
employer, where the employer is required by law to pay on the
excess over four thousand dollars: Provided also, that in
computing the income of any person, corporation, company, or
association there shall not be included the amount received from
any corporation, company, or association as dividends upon the
stock of such corporation, company, or association if the tax of
two percentum has been paid upon its net profits by said
corporation, company, or association as required by this act."

															"SEC. 29. That it shall be the duty of all persons of lawful age
having an income of more than three thousand five hundred dollars
for the taxable year, computed on the basis herein prescribed, to
make and render a list or return, on or before the day provided by
law, in such form and manner as may be directed by the Commissioner
of Internal Revenue, with the approval of the Secretary of the
Treasury, to the collector or a deputy collector of the district in
which they reside, of the amount of their income, gains, and
profits, as aforesaid, and all guardians and trustees, executors,
administrators, agents, receivers, and all persons or corporations
acting in any fiduciary capacity, shall make and render a list or
return as aforesaid, to the collector or a deputy collector of the
district in which such person or corporation acting in a fiduciary
capacity resides or does business, of the amount of income, gains,
and profits of any minor or person for whom they act, but persons
having less than three thousand five hundred dollars income are not
required to make such report; and the collector or deputy collector
shall require every list or return to be verified by the oath or
affirmation of the party rendering it, and may increase the amount
of any list or return if he has reason to believe that the same is
understated, and in case any such person having a taxable income
shall neglect or refuse to make and render such list and return, or
shall render a willfully false or fraudulent list or return, it
shall be the duty of the collector or deputy collector, to make
such list, according to the best information he can obtain, by the
examination of such person, or any other evidence, and to add fifty
percentum as a penalty to the amount of the tax due on such list in
all cases of willful neglect or refusal to make and render a list
or return, and in all cases of a willfully false or fraudulent list
or return having been rendered to add one hundred percentum as a
penalty to the amount of tax ascertained to be due, the tax and the
additions thereto as a penalty to be assessed and collected in the
manner provided for in other cases of willful neglect or refusal to
render a list or return, or of rendering a false or fraudulent
return."

															A proviso was added that any person or corporation might show
that he or its ward had no taxable income, or that the same had
been paid elsewhere, and the collector might exempt from the tax
for that year.

															"Any person or company, corporation, or association, feeling
aggrieved by the decision of the deputy collector in such cases may
appeal to the collector of the district, and his decision thereon,
unless reversed by the Commissioner of Internal Revenue, shall be
final. If dissatisfied with the decision of the collector, such
person or corporation, company, or association may submit the case,
with all the papers, to the Commissioner of Internal Revenue for
his decision, and may furnish the testimony of witnesses to prove
any relevant facts, having served notice to that effect upon the
Commissioner of Internal Revenue, as herein prescribed."

															Provision was made for notice of time and place for taking
testimony on both sides, and that no penalty should be assessed
until after notice.

															By section 30, the taxes on incomes were made payable on or
before July 1 of each year, and five percent penalty levied on
taxes unpaid, and interest.

															By section 31, any nonresident might receive the benefit of the
exemptions provided for, and

															"in computing income he shall include all income from every
source, but unless he be a citizen of the United States he shall
only pay on that part of the income which is derived from any
source in the United States. In case such nonresident fails to file
such statement, the collector of each district shall collect the
tax on the income derived from property situated in his district,
subject to income tax, making no allowance for exemptions, and all
property belonging to such nonresident shall be liable to distraint
for tax: Provided, That nonresident corporations shall be
subject to the same laws as to tax as resident corporations, and
the collection of the tax shall be made in the same manner as
provided for collections of taxes against nonresident persons."

															SEC. 32. That there shall be assessed, levied, and collected,
except as herein otherwise provided, a tax of two percentum
annually on the net profits or income above actual operating and
business expenses, including expenses for materials purchased for
manufacture or bought for resale, losses, and interest on bonded
and other indebtedness of all banks, banking institutions, trust
companies, saving institutions, fire, marine, life, and other
insurance companies, railroad, canal, turnpike, canal navigation,
slack water, telephone, telegraph, express, electric light, gas,
water, street railway companies, and all other corporations,
companies, or associations doing business for profit in the United
States, no matter how created and organized but not including
partnerships.

															The tax is made payable on or before the first day of July in
each year, and if the president or other chief officer of any
corporation, company, or association, or in the case of any foreign
corporation, company, or association, the resident manager or agent
shall neglect or refuse to file with the collector of the internal
revenue district in which said corporation, company, or association
shall be located or be engaged in business, a statement verified by
his oath or affirmation, in such form as shall be prescribed by the
Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury, showing the amount of net profits or
income received by said corporation, company, or association during
the whole calendar year last preceding the date of filing said
statement as hereinafter required, the corporation, company, or
association making default shall forfeit as a penalty the sum of
one thousand dollars and two percentum on the amount of taxes due,
for each month until the same is paid, the payment of said penalty
to be enforced as provided in other cases of neglect and refusal to
make return of taxes under the internal revenue laws.

															"The net profits or income of all corporations, companies, or
associations shall include the amounts paid to shareholders, or
carried to the account of any fund, or used for construction,
enlargement of plant, or any other expenditure or investment paid
from the net annual profits made or acquired by said corporations,
companies, or associations."

															"That nothing herein contained shall apply to States, counties,
or municipalities; nor to corporations, companies, or associations
organized and conducted solely for charitable, religious, or
educational purposes, including fraternal beneficiary societies,
orders, or associations operating upon the lodge system and
providing for the payment of life, sick, accident, and other
benefits to the members of such societies, orders, or associations
and dependents of such members; nor to the stocks, shares, funds,
or securities held by any fiduciary or trustee for charitable,
religious, or educational purposes; nor to building and loan
associations or companies which make loans only to their
shareholders; nor to such savings banks, savings institutions or
societies as shall, first, have no stockholders or members except
depositors and no capital except deposits; secondly, shall not
receive deposits to an aggregate amount, in any one year, of more
than one thousand dollars from the same depositor; thirdly, shall
not allow an accumulation or total of deposits, by any one
depositor exceeding ten thousand dollars; fourthly, shall actually
divide and distribute to its depositors, ratably to deposits, all
the earnings over the necessary and proper expenses of such bank,
institution, or society, except such as shall be applied to
surplus; fifthly, shall not possess, in any form, a surplus fund
exceeding ten percentum of its aggregate deposits; nor to such
savings banks, savings institutions, or societies composed of
members who do not participate in the profits thereof and which pay
interest or dividends only to their depositors; nor to that part of
the business of any savings bank, institution, or other similar
association having a capital stock, that is conducted on the mutual
plan solely for the benefit of its depositors on such plan, and
which shall keep its accounts of its business conducted on such
mutual plan separate and apart from its other accounts."

															"Nor to any insurance company or association which conducts all
its business solely upon the mutual plan, and only for the benefit
of its policy holders or members, and having no capital stock and
no stock or shareholders, and holding all its property in trust and
in reserve for its policyholders or members; nor to that part of
the business of any insurance company having a capital stock and
stock and shareholders, which is conducted on the mutual plan,
separate from its stock plan of insurance, and solely for the
benefit of the policyholders and members insured on said mutual
plan, and holding all the property belonging to and derived from
said mutual part of its business in trust and reserve for the
benefit of its policyholders and members insured on said mutual
plan."

															"That all state, county, municipal, and town taxes paid by
corporations, companies, or associations, shall be included in the
operating and business expenses of such corporations, companies, or
associations."

															"SEC. 33. That there shall be levied, collected, and paid on all
salaries of officers, or payments for services to persons in the
civil, military, naval, or other employment or service of the
United States, including Senators and Representatives and Delegates
in Congress, when exceeding the rate of four thousand dollars per
annum, a tax of two percentum on the excess above the said four
thousand dollars, and it shall be the duty of all paymasters and
all disbursing officers under the government of the United States,
or persons in the employ thereof, when making any payment to any
officers or persons as aforesaid, whose compensation is determined
by a fixed salary, or upon settling or adjusting the accounts of
such officers or persons, to deduct and withhold the aforesaid tax
of two percentum, and the payroll, receipts, or account of officers
or persons paying such tax as aforesaid shall be made to exhibit
the fact of such payment. And it shall be the duty of the
accounting officers of the Treasury Department, when auditing the
accounts of any paymaster or disbursing officer, or any officer
withholding his salary from moneys received by him, or when
settling or adjusting the accounts of any such officer, to require
evidence that the taxes mentioned in this section have been
deducted and paid over to the Treasurer of the United States, or
other officer authorized to receive the same. Every corporation
which pays to any employee a salary or compensation exceeding four
thousand dollars per annum shall report the same to the collector
or deputy collector of his district and said employee shall pay
thereon, subject to the exemptions herein provided for, the tax of
two percentum on the excess of his salary over four thousand
dollars: Provided, That salaries due to state, county, or
municipal officers shall be exempt from the income tax herein
levied."

															By section 34, sections thirty-one hundred and sixty-seven,
thirty-one hundred and seventy-two, thirty-one hundred and
seventy-three, and thirty-one hundred and seventy-six of the
Revised Statutes of the United States as amended were amended so as
to provide that it should be unlawful for the collector and other
officers to make known, or to publish amount or source of income
under penalty; that every collector should

															"from time to time cause his deputies to proceed through every
part of his district and inquire after and concerning all persons
therein who are liable to pay any internal revenue tax, and all
persons owning or having the care and management of any objects
liable to pay any tax, and to make a list of such persons and
enumerate said objects;"

															that the tax returns must he made on or before the first Monday
in March; that the collectors may make returns when particulars are
furnished; that notice be given to absentees to render returns;
that collectors may summon persons to produce books and testify
concerning returns; that collectors may enter other districts to
examine persons and books, and may make returns, and that penalties
may be imposed on false returns.

															By section 35, it was provided that corporations doing business
for profit should make returns on or before the first Monday of
March of each year

															"of all the following matters for the whole calendar year last
preceding the date of such return:"

															"First. The gross profits of such corporation, company, or
association, from all kinds of business of every name and
nature."

															"Second. The expenses of such corporation, company, or
association, exclusive of interest, annuities, and dividend."

															"Third. The net profits of such corporation, company, or
association, without allowance for interest, annuities, or
dividends."

															"Fourth. The amount paid on account of interest, annuities, and
dividends, stated separately."

															"Fifth. The amount paid in salaries of four thousand dollars or
less to each person employed."

															"Sixth. The amount paid in salaries of more than four thousand
dollars to each person employed and the name and address of each of
such persons and the amount paid to each."

															By section 36, that books of account should be kept by
corporations as prescribed, and inspection thereof be granted under
penalty.

															By section 37, provision is made for receipts for taxes
paid.

															By a joint resolution of February 21, 1895, the time for making
returns of income for the year 1894 was extended, and it was
provided that,

															"in computing incomes under said act, the amounts necessarily
paid for fire insurance premiums and for ordinary repairs shall be
deducted;"

															and that

															"in computing incomes under said act, the amounts received as
dividends upon the stock of any corporation, company, or
association shall not be included in case such dividends are also
liable to the tax of two percentum upon the net profits of said
corporation, company, or association although such tax may not have
been actually paid by said corporation, company, or association at
the time of making returns by the person, corporation, or
association receiving such dividends, and returns or reports of the
names and salaries of employees shall not be required from
employers unless called for by the collector in order to verify the
returns of employees."

															MR. JUSTICE FIELD.

															I also desire to place my opinion on record upon some of the
important questions discussed in relation to the direct and
indirect taxes proposed by the income tax law of 1894. Page 157 U. S. 587 Several suits have been instituted in state and Federal courts,
both at law and in equity, to test the validity of the provisions
of the law, the determination of which will necessitate careful and
extended consideration.

															The subject of taxation in the new government which was to be
established created great interest in the convention which framed
the Constitution, and was the cause of much difference of opinion
among its members and earnest contention between the States. The
great source of weakness of the confederation was its inability to
levy taxes of any kind for the support of its government. To raise
revenue, it was obliged to make requisitions upon the States, which
were respected or disregarded at their pleasure. Great
embarrassments followed the consequent inability to obtain the
necessary funds to carry on the government. One of the principal
objects of the proposed new government was to obviate this defect
of the confederacy by conferring authority upon the new government
by which taxes could be directly laid whenever desired. Great
difficulty in accomplishing this object was found to exist. The
States bordering on the ocean were unwilling to give up their right
to lay duties upon imports, which were their chief source of
revenue. The other States, on the other hand, were unwilling to
make any agreement for the levying of taxes directly upon real and
personal property, the smaller States fearing that they would be
overborne by unequal burdens forced upon them by the action of the
larger States. In this condition of things, great embarrassment was
felt by the members of the convention. It was feared at times that
the effort to form a new government would fail. But happily, a
compromise was effected by an agreement that direct taxes should be
laid by Congress by apportioning them among the States according to
their representation. In return for this concession by some of the
States, the other States bordering on navigable waters consented to
relinquish to the new government the control of duties, imposts,
and excises, and the regulation of commerce, with the condition
that the duties, imposts, and excises should be uniform throughout
the United States. So that, on the one Page 157 U. S. 588 hand, anything like oppression or undue advantage of any one
State over the others would be prevented by the apportionment of
the direct taxes among the States according to their
representation, and, on the other hand, anything like oppression or
hardship in the levying of duties, imposts, and excises would be
avoided by the provision that they should be uniform throughout the
United States. This compromise was essential to the continued union
and harmony of the States. It protected every State from being
controlled in its taxation by the superior numbers of one or more
other States.

															The Constitution accordingly, when completed, divided the taxes
which might be levied under the authority of Congress into those
which were direct and those which were indirect. Direct taxes, in a
general and large sense, may be described as taxes derived
immediately from the person, or from real or personal property,
without any recourse therefrom to other sources for reimbursement.
In a more restricted sense, they have sometimes been confined to
taxes on real property, including the rents and income derived
therefrom. Such taxes are conceded to be direct taxes, however
taxes on other property are designated, and they are to be
apportioned among the States of the Union according to their
respective numbers. The second section of article I of the
Constitution declares that representatives and direct taxes shall
be thus apportioned. It had been a favorite doctrine in England and
in the colonies, before the adoption of the Constitution, that
taxation and representation should go together. The Constitution
prescribes such apportionment among the several States according to
their respective numbers, to be determined by adding to the whole
number of free persons, including those bound to service for a term
of years, and excluding Indians not taxed, three-fifths of all
other persons.

															Some decisions of this court have qualified or thrown doubts
upon the exact meaning of the words "direct taxes." Thus, in Springer v. United States, 102 U.
S. 586 , it was held that a tax upon gains, profits, and
income was an excise or duty, and not a direct tax within the
meaning of the Constitution, and Page 157 U. S. 589 that its imposition was not therefore unconstitutional. And in Pacific Insurance Co. v.
Soule , 7 Wall. 433, it was held that an income tax
or duty upon the amounts insured, renewed or continued by insurance
companies, upon the gross amounts of premiums received by them and
upon assessments made by them, and upon dividends and undistributed
sums, was not a direct tax, but a duty or excise.

															In the discussions on the subject of direct taxes in the British
Parliament, an income tax has been generally designated as a direct
tax, differing in that respect from the decision of this court in Springer v. United States. But whether the latter can be
accepted as correct or otherwise, it does not affect the tax upon
real property and its rents and income as a direct tax. Such a tax
is by universal consent recognized to be a direct tax.

															As stated, the rents and income of real property are included in
the designation of direct taxes as part of the real property. Such
has been the law in England for centuries, and in this country from
the early settlement of the colonies, and it is strange that any
member of the legal profession should, at this day, question a
doctrine which has always been thus accepted by common law lawyers.
It is so declared in approved treatises upon real property and in
accepted authorities on particular branches of real estate law, and
has been so announced in decisions in the English courts and our
own courts without number. Thus, in Washburn on Real Property, it
is said that

															"a devise of the rents and profits of land, or the income of
land, is equivalent to a devise of the land itself, and will be for
life or in fee according to the limitation expressed in the
devise."

															Vol. 2, p. 695, § 30.

															In Jarman on Wills, Vol. 1, page 40, it is laid down that

															"a devise of the rents and profits or of the income of land
passes the land itself both at law and in equity; a rule, it is
said, founded on the feudal law, according to which the whole
beneficial interest in the land consisted in the right to take the
rents and profits. And since the act 1 Vict. c. 26, such a devise
carries the fee simple; but before that act, it carried no more
than an estate for life unless words of inheritance were Page 157 U. S. 590 added."

															Mr. Jarman cites numerous authorities in support of his
statement. South v. Alleine, 1 Salk. 228; Doe d.
Goldin v. Lakeman, 2 B. & Ad. 30, 42; Johnson v.
Arnold, 1 Ves.Sen. 171; Baines v. Dixon, 1 Ves.Sen.
42; Mannox v. Greener, L.R. 14 Eq. 46; Blann v.
Bell, 2 De G., M. & G. 781; Plenty v. West, 6
C.B. 201.

															Coke upon Littleton says:

															"If a man seised of lands in fee by his deed granteth to another
the profit of those lands, to have and to hold to him and his
heires, and maketh livery secundum formam chartae, the
whole land itselfe doth passe; for what is the land but the profits
thereof?"

															Lib. 1, cap. 1, § 1, p. 4 b. In Doe d. Goldin v. Lakeman, Lord Tenterden, Chief
Justice of the Court of King's Bench, to the same effect, said: "It
is an established rule that a devise of the rents and profits is a
devise of the land." And in Johnson v. Arnold, Lord
Chancellor Hardwicke reiterated the doctrine that a "devise of the
profits of lands is a devise of the lands themselves."

															The same rule is announced in this country; the Court of Errors
of New York in Paterson v. Ellis, 11 Wend. 29, 98, holding
that the

															"devise of the interest or of the rents and profits is a devise
of the thing itself, out of which that interest or those rents and
profits may issue;"

															and the Supreme Court of Massachusetts, in Reed v.
Reed, 9 Mass. 372, 374, that "a devise of the income of lands
is the same in its effect as a devise of the lands." The same view
of the law was expressed in Anderson v. Greble, 1 Ashmead
(Penn.) 136, 138, King, the president of the court, stating: "I
take it to be a well settled rule of law that, by a devise of the
rent, profits, and income of land, the land itself passes." Similar
adjudications might be repeated almost indefinitely. One may have
the reports of the English courts examined for several centuries
without finding a single decision or even a dictum of their judges
in conflict with them. And what answer do we receive to these
adjudications? Those rejecting them furnish no proof that the
framers of the Constitution did not follow them, as the great body
of the people of the country then did. An incident which occurred
in this court and room twenty Page 157 U. S. 591 years ago may have become a precedent. To a powerful argument
then being made by a distinguished counsel on a public question,
one of the judges exclaimed that there was a conclusive answer to
his position, and that was that the court was of a different
opinion. Those who decline to recognize the adjudications cited may
likewise consider that they have a conclusive answer to them in the
fact that they also are of a different opinion. I do not think so.
The law as expounded for centuries cannot be set aside or
disregarded because some of the judges are now of a different
opinion from those who, a century ago, followed it in framing our
Constitution.

															Hamilton, speaking on the subject, asks: "What, in fact, is
property but a fiction without the beneficial use of it?" And adds:
"In many cases, indeed, the income or annuity is the property
itself." 3 Hamilton's Works, Putnam's ed. 34.

															It must be conceded that whatever affects any element that gives
an article its value, in the eye of the law affects the article
itself.

															In Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 444 ,
it was held that a tax on the occupation of an importer is the same
as a tax on his imports, and, as such, was invalid. It was
contended that the State might tax occupations, and that this was
nothing more, but the court said, by Chief Justice Marshall (p. 25 U. S.
444 ):

															"It is impossible to conceal from ourselves that this is varying
the form without varying the substance. It is treating a
prohibition which is general as if it were confined to a particular
mode of doing the forbidden thing. All must perceive that a tax on
the sale of an article imported only for sale is a tax on the
article itself."

															In Weston v.
Charleston , 2 Pet. 449, it was held that a tax upon
stock issued for loans to the United States was a tax upon the
loans themselves, and equally invalid. In Dobbins v.
Commissioners , 16 Pet. 435, it was held that the
salary of an officer of the United States could not be taxed if the
office was itself exempt. In Almy v.
California , 24 How. 169, it was held that a duty on
a bill of lading was the same thing as a duty on the article
transported. In Cook v. Pennsylvania, 97 U. S.
566 it was held that a tax upon the amount Page 157 U. S. 592 of sales of goods made by an auctioneer was a tax upon the goods
sold. In Philadelphia & Southern Steamship Co. v.
Pennsylvania, 122 U. S. 326 , and Leloup v. Mobile, 127 U. S. 640 , 127 U. S. 648 ,
it was held that a tax upon the income received from interstate
commerce was a tax upon the commerce itself, and equally
unauthorized. The same doctrine was held in People v.
Commissioners of Taxes, 90 N.Y. 63; State
Freight Tax , 15 Wall. 232, 82 U. S. 274 ; Welton v. Missouri, 91 U. S. 275 , 91 U. S. 278 ,
and in Fargo v. Michigan, 121 U.
S. 230 .

															The law, so far as it imposes a tax upon land by taxation of the
rents and income thereof, must therefore fail, as it does not
follow the rule of apportionment. The Constitution is imperative in
its direction on this subject, and admits of no departure from
them.

															But the law is not invalid merely in its disregard of the rule
of apportionment of the direct tax levied. There is another and an
equally cogent objection to it. In taxing incomes other than rents
and profits of real estate, it disregards the rule of uniformity
which is prescribed in such cases by the Constitution. The eighth
section of the first article of the Constitution declares that

															"the Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defence and general welfare of the United States; but all
duties, imposts, and excises shall be uniform throughout the United
States. "

															Excise are a species of tax consisting generally of duties laid
upon the manufacture, sale, or consumption of commodities within
the country, or upon certain callings or occupations, often taking
the form of exactions for licenses to pursue them. The taxes
created by the law under consideration as applied to savings banks,
insurance companies, whether of fire, life, or marine, to building
or other associations, or to the conduct of any other kind of
business, are excise taxes, and fall within the requirement, so far
as they are laid by Congress, that they must be uniform throughout
the United States.

															The uniformity thus required is the uniformity throughout the
United States of the duty, impost, and excise levied. That is, the
tax levied cannot be one sum upon an article at one Page 157 U. S. 593 place and a different sum upon the same article at another
place. The duty received must be the same at all places throughout
the United States, proportioned to the quantity of the article
disposed of or the extent of the business done. If, for instance,
one kind of wine or grain or produce has a certain duty laid upon
it proportioned to its quantity in New York, it must have a like
duty proportioned to its quantity when imported at Charleston or
San Francisco, or if a tax be laid upon a certain kind of business
proportioned to its extent at one place, it must be a like tax on
the same kind of business proportioned to its extent at another
place. In that sense, the duty must be uniform throughout the
United States. It is contended by the government that the
Constitution only requires an uniformity geographical in its
character. That position would be satisfied if the same duty were
laid in all the States, however variant it might be in different
places of the same State. But it could not be sustained in the
latter case without defeating the equality, which is an essential
element of the uniformity required, so far as the same is
practicable.

															In United States v.
Singer , 15 Wall. 111, 82 U. S. 121 , a
tax was imposed upon a distiller, in the nature of an excise, and
the question arose whether, in its imposition upon different
distillers, the uniformity of the tax was preserved, and the court
said:

															"The law is not in our judgment subject to any constitutional
objection. The tax imposed upon the distiller is in the nature of
an excise, and the only limitation upon the power of Congress in
the imposition of taxes of this character is that they shall be
'uniform throughout the United States.' The tax here is uniform in
its operation; that is, it is assessed equally upon all
manufacturers of spirits wherever they are. The law does not
establish one rule for one distiller and a different rule for
another, but the same rule for all alike."

															In the Head Money Cases, 112 U.
S. 580 , 112 U. S. 594 ,
a tax was imposed upon the owners of steam vessels for each
passenger landed at New York from a foreign port, and it was
objected that the tax was not levied by any rule of uniformity, but
the court, by Justice Miller, replied:

															"The tax is uniform when Page 157 U. S. 594 it operates with the same force and effect in every place where the subject of it is found. The tax in this case,
which, as far as it can be called a tax, is an excise duty on the
business of bringing passengers from foreign countries into this by
ocean navigation, is uniform, and operates precisely alike in every
port of the United States where such passengers can be landed."

															In the decision in that case in the Circuit Court, 18 Fed.Rep.
135, 139, Mr. Justice Blatchford, in addition to pointing out that
"the act was not passed in the exercise of the power of laying
taxes," but was a regulation of commerce, used the following
language:

															"Aside from this, the tax applies uniformly to all steam and
sail vessels coming to all ports in the United States, from all
foreign ports, with all alien passengers. The tax being a license
tax on the business, the rule of uniformity is sufficiently
observed if the tax extends to all persons of the class selected by
Congress; that is, to all owners of such vessels. Congress has
the exclusive power of selecting the class. It has regulated that
particular branch of commerce which concerns the bringing of alien
passengers,"

															and that taxes shall be levied upon such property as shall be
prescribed by law. The object of this provision was to prevent
unjust discriminations. It prevents property from being classified
and taxed, as classed, by different rules. All kinds of property
must be taxed uniformly or be entirely exempt. The uniformity must
be coextensive with the territory to which the tax applies.

															Mr. Justice Miller, in his lectures on the Constitution (N.Y.
1891) pp. 240, 241, said of taxes levied by Congress:

															"The tax must be uniform on the particular article, and
it is uniform, within the meaning of the constitutional
requirement, if it is made to bear the same percentage over all the
United States. That is manifestly the meaning of this word as used
in this clause. The framers of the Constitution could not have
meant to say that the government, in raising its revenues, should
not be allowed to discriminate between the articles which it should
tax."

															In discussing generally the requirement of uniformity found in
state constitutions, he said:

															"The difficulties in the way of this construction have, however,
been very largely obviated by the meaning of the word Page 157 U. S. 595 'uniform' which has been adopted, holding that the uniformity
must refer to articles of the same class. That is, different
articles may be taxed at different amounts, provided the rate is
uniform on the same class everywhere, with all people, and at all
times. "

															One of the learned counsel puts it very clearly when he says
that the correct meaning of the provisions requiring duties,
imposts, and excises to be "uniform throughout the United States"
is that the law imposing them should "have an equal and uniform
application in every part of the Union."

															If there were any doubt as to the intention of the States to
make the grant of the right to impose indirect taxes subject to the
condition that such taxes shall be in all respects uniform and
impartial, that doubt, as said by counsel, should be resolved in
the interest of justice, in favor of the taxpayer.

															Exemptions from the operation of a tax always create
inequalities. Those not exempted must, in the end, bear an
additional burden or pay more than their share. A law containing
arbitrary exemptions can in no just sense be termed uniform. In my
judgment, Congress has rightfully no power, at the expense of
others, owning property of a like character, to sustain private
trading corporations, such as building and loan associations,
savings banks, and mutual life, fire, marine, and accident
insurance companies, formed under the laws of the various States,
which advance no national purpose or public interest and exist
solely for the pecuniary profit of their members.

															Where property is exempt from taxation, the exemption, as has
been justly stated, must be supported by some consideration that
the public, and not private, interests will be advanced by it.
Private corporations and private enterprises cannot be aided under
the pretence that it is the exercise of the discretion of the
legislature to exempt them. Loan Association v.
Topeka , 20 Wall. 655; Parkersburg v.
Brown, 106 U. S. 487 ; Barbour v. Louisville Board of Trade, 82 Kentucky 645,
654, 655; Lexington v. McQuillan's Heirs, 9 Dana, 513,
516, 517, and Sutton's Heirs v. Louisville, 5 Dana, 28,
31.

															Cooley, in his treatise on Taxation (2d ed. 215), justly Page 157 U. S. 596 observes that:

															"It is difficult to conceive of a justifiable exemption law
which should select single individuals or corporations, or single
articles of property, and, taking them out of the class to which
they belong, make them the subject of capricious legislative favor.
Such favoritism could make no pretence to equality; it would lack
the semblance of legitimate tax legislation."

															The income tax law under consideration is marked by
discriminating features which affect the whole law. It
discriminates between those who receive an income of four thousand
dollars and those who do not. It thus vitiates, in my judgment, by
this arbitrary discrimination, the whole legislation. Hamilton says
in one of his papers (the Continentalist),

															"the genius of liberty reprobates everything arbitrary or
discretionary in taxation. It exacts that every man, by a definite
and general rule, should know what proportion of his property the
State demands; whatever liberty we may boast of in theory, it
cannot exist in fact while [arbitrary] assessments continue."

															1 Hamilton's Works, ed. 1885, 270. The legislation, in the
discrimination it makes, is class legislation. Whenever a
distinction is made in the burdens a law imposes or in the benefits
it confers on any citizens by reason of their birth, or wealth, or
religion, it is class legislation, and leads inevitably to
oppression and abuses, and to general unrest and disturbance in
society. It was hoped and believed that the great amendments to the
Constitution which followed the late civil war had rendered such
legislation impossible for all future time. But the objectionable
legislation reappears in the act under consideration. It is the
same in essential character as that of the English income statute
of 1691, which taxed Protestants at a certain rate, Catholics, as a
class, at double the rate of Protestants, and Jews at another and
separate rate. Under wise and constitutional legislation, every
citizen should contribute his proportion, however small the sum, to
the support of the government, and it is no kindness to urge any of
our citizens to escape from that obligation. If he contributes the
smallest mite of his earnings to that purpose, he will have a
greater regard for the government, and more self-respect Page 157 U. S. 597 for himself, feeling that, though he is poor in fact, he is not
a pauper of his government. And it is to be hoped that, whatever
woes and embarrassments may betide our people, they may never lose
their manliness and self-respect. Those qualities preserved, they
will ultimately triumph over all reverses of fortune.

															There is nothing in the nature of the corporations or
associations exempted in the present act, or in their method of
doing business, which can be claimed to be of a public or
benevolent nature. They differ in no essential characteristic in
their business from "all other corporations, companies, or
associations doing business for profit in the United States." Act
of August 15, 1894, c. 349, § 32.

															A few words as to some of them, the extent of their capital and
business, and of the exceptions made to their taxation:

															1st. A to mutual savings banks. -- Under income tax
laws prior to 1870, these institutions were specifically taxed.
Under the new law, certain institutions of this class are exempt,
provided the shareholders do not participate in the profits, and
interest and dividends are only paid to the depositors. No limit is
fixed to the property and income thus exempted -- it may be
$100,000 or $100,000,000. One of the counsel engaged in this case
read to us during the argument from the report of the Comptroller
of the Currency, sent by the President to Congress December 3,
1894, a statement to the effect that the total number of mutual
savings banks exempted was 646, and the total number of stock
savings banks was 378, and showed that they did the same character
of business and took in the money of depositors for the purpose of
making it bear interest, with profit upon it in the same way, and
yet the 646 are exempt and the 378 are taxed. He also showed that
the total deposits in savings banks were $1,748,000,000.

															2d. As to mutual insurance corporations. -- These
companies were taxed under previous income tax laws. They do
business somewhat differently from other companies, but they
conduct a strictly private business in which the public has no
interest, and have been often held not to be benevolent or
charitable organizations. Page 157 U. S. 598 The sole condition for exempting them under the present law is
declared to be that they make loans to or divide their profits
among their members, or depositors or policyholders. Every
corporation is carried on, however, for the benefit of its members,
whether stockholders or depositors or policyholders. If it is
carried on for the benefit of its shareholders, every dollar of
income is taxed; if it is carried on for the benefit of its
policyholders or depositors, who are but another class of
shareholders, it is wholly exempted. In the State of New York, the
act exempts the income from over $1,00,000,000 of property of these
companies. The leading mutual life insurance company has property
exceeding 204,000,000 in value, the income of which is wholly
exempted. The insertion of the exemption is stated by counsel to
have saved that institution fully $200,000 a year over other
insurance companies and associations having similar property and
carrying on the same business, simply because such other companies
or associations divide their profits among their shareholders,
instead of their policyholders.

															3d. As to building an loan, associations. -- The
property of these institutions is exempted from taxation to the
extent of millions. They are in no sense benevolent or charitable
institutions, and are conducted solely for the pecuniary profit of
their members. Their assets exceed the capital stock of the
national banks of the country. One, in Dayton, Ohio, has a capital
of $10,000,000, and Pennsylvania has $65,000,000 invested in these
associations. The census report submitted to Congress by the
President, May 1, 1894, shows that their property in the United
States amounts to over $628,000,000. Why should these institutions
and their immense accumulations of property be singled out for the
special favor of Congress and be freed from their just, equal, and
proportionate share of taxation when others engaged under different
names, in similar business, are subjected to taxation by this law?
The aggregate amount of the saving to these associations, by reason
of their exemption, is over $600,000 a year. If this statement of
the exemptions of corporations under the law of Congress, taken
from the carefully prepared briefs of counsel Page 157 U. S. 599 and from reports to Congress, will not satisfy parties
interested in this case that the act in question disregards, in
almost every line and provision, the rule of uniformity required by
the Constitution, then "neither will they be persuaded, though one
rose from the dead." That there should be any question or any doubt
on the subject surpasses my comprehension. Take the case of mutual
savings banks and stock savings banks. They do the same character
of business, and in the same way use the money of depositors,
loaning it at interest for profit, yet 646 of them, under the law
before us, are exempt from taxation on their income, and 378 are
taxed upon it. How the tax on the income of one kind of these banks
can be said to be laid upon any principle of uniformity, when the
other is exempt from all taxation, I repeat, surpasses my
comprehension.

															But there are other considerations against the law which are
equally decisive. They relate to the uniformity and equality
required in all taxation, national and State; to the invalidity of
taxation by the United States of the income of the bonds and
securities of the States and of their municipal bodies, and the
invalidity of the taxation of the salaries of the judges of the
United States courts.

															As stated by counsel: "There is no such thing in the theory of
our national government as unlimited power of taxation in Congress.
There are limitations," as he justly observes,

															"of its powers arising out of the essential nature of all free
governments; there are reservations of individual rights, without
which society could not exist, and which are respected by every
government. The right of taxation is subject to these
limitations." Loan Association v.
Topeka , 20 Wall. 635, and Parkersburg v.
Brown, 106 U. S. 487 .

															The inherent and fundamental nature and character of a tax is
that of a contribution to the support of the government, levied
upon the principle of equal and uniform apportionment among the
persons taxed, and any other exaction does not come within the
legal definition of a tax.

															This inherent limitation upon the taxing power forbids the
imposition of taxes which are unequal in their operation upon Page 157 U. S. 600 similar kinds of property, and necessarily strikes down the
gross and arbitrary distinctions in the income law as passed by
Congress. The law, as we have seen, distinguishes in the taxation
between corporations by exempting the property of some of them from
taxation and levying the tax on the property of others when the
corporations do not materially differ from one another in the
character of their business or in the protection required by the
government. Trifling differences in their modes of business, but
not in their results, are made the ground and occasion of the
greatest possible differences in the amount of taxes levied upon
their income, showing that the action of the legislative power upon
them has been arbitrary and capricious and sometimes merely
fanciful.

															There was another position taken in this case which is not the
least surprising to me of the many advanced by the upholders of the
law, and that is that, if this court shall declare that the
exemptions and exceptions from taxation extended to the various
corporations mentioned, fire, life, and marine insurance companies,
and to mutual savings banks, building, and loan associations
violate the requirement of uniformity, and are therefore void, the
tax as to such corporations can be enforced, and that the law will
stand as though the exemptions had never been inserted. This
position does not, in my judgment, rest upon any solid foundation
of law or principle. The abrogation or repeal of an
unconstitutional or illegal provision does not operate to create
and give force to any enactment or part of an enactment which
Congress has not sanctioned and promulgated. Seeming support of
this singular position is attributed to the decision of this court
in Huntington v. Worthen, 120 U. S.
97 . But the examination of that case will show that it
does not give the slightest sanction to such a doctrine. There, the
constitution of Arkansas had provided that all property subject to
taxation should be taxed according to its value, to be ascertained
in such manner as the general assembly should direct, making the
same equal and uniform throughout the State, and certain public
property was declared by statute to be exempt from taxation, which
statute was subsequently held to be unconstitutional. The court
decided that the unconstitutional Page 157 U. S. 601 part of the enactment, which was separable from the remainder,
could be omitted and the remainder enforced; a doctrine undoubtedly
sound, and which has never, that I am aware of, been questioned.
But that is entirely different from the position here taken, that
exempted things can be taxed by striking out their exemption.

															The law of 1894 says there shall be assessed, levied, and
collected, "except as hereinafter otherwise provided," two
percentum of the amount, etc. If the exceptions are stricken out,
there is nothing to be assessed and collected except what Congress
has otherwise affirmatively ordered. Nothing less can have the
force of law. This court is impotent to pass any law on the
subject. It has no legislative power. I am unable, therefore, to
see how we can, by declaring an exemption or exception invalid,
thereby give effect to provisions as though they were never
exempted. The court, by declaring the exemptions invalid, cannot,
by any conceivable ingenuity, give operative force as enacting
clauses to the exempting provisions. That result is not within the
power of man.

															The law is also invalid in its provisions authorizing the
taxation of the bonds and securities of the States and of their
municipal bodies. It is objected that the cases pending before us
do not allege any threatened attempt to tax the bonds or securities
of the State, but only of municipal bodies of the States. The law
applies to both kinds of bonds and securities, those of the States
as well as those of municipal bodies, and the law of Congress we
are examining, being of a public nature, affecting the whole
community, having been brought before us and assailed as
unconstitutional in some of its provisions, we are at liberty, and
I think it is our duty, to refer to other unconstitutional features
brought to our notice in examining the law, though the particular
points of their objection may not have been mentioned by counsel.
These bonds and securities are as important to the performance of
the duties of the State as like bonds and securities of the United
States are important to the performance of their duties, and are as
exempt from the taxation of the United States as the former are
exempt from the taxation of the States. As stated by Judge Page 157 U. S. 602 Cooley in his work on the principles of constitutional law:

															"The power to tax, whether by the United States or by the
States, is to be construed in the light of, and limited by, the
fact that the States and the Union are inseparable, and that the
Constitution contemplates the perpetual maintenance of each with
all its constitutional powers, unembarrassed and unimpaired by any
action of the other. The taxing power of the Federal government
does not therefore extend to the means or agencies through or by
the employment of which the States perform their essential
functions, since, if these were within its reach, they might be
embarrassed, and perhaps wholly paralyzed, by the burdens it should
impose."

															"That the power to tax involves the power to destroy; that the
power to destroy may defeat and render useless the power to create;
that there is a plain repugnance in conferring on one government a
power to control the constitutional measures of another, which
other, in respect to those very measures, is declared to be supreme
over that which exerts the control -- are propositions not to be
denied."

															"It is true that taxation does not necessarily and unavoidably
destroy, and that to carry it to the excess of destruction would be
an abuse not to be anticipated, but the very power would take from
the States a portion of their intended liberty of independent
action within the sphere of their powers, and would constitute to
the State a perpetual danger of embarrassment and possible
annihilation. The Constitution contemplates no such shackles upon
state powers, and, by implication, forbids them."

															The Internal Revenue Act of June 30, 1864, in section 122,
provided that railroad and certain other companies specified,
indebted for money for which bonds had been issued upon which
interest was stipulated to be paid, should be subject to pay a tax
of five percent on the amount of all such interest, to be paid by
the corporations and by them deducted from the interest payable to
the holders of such bonds, and the question arose in United States v. Railroad
Co. , 17 Wall. 322, 84 U. S. 327 ,
whether the tax imposed could be thus collected from the revenues
of a city owning such bonds. This court answered the question as
follows:

															"There is no dispute about the general Page 157 U. S. 603 rules of the law applicable to this subject. The power of
taxation by the Federal government upon the subjects and in the
manner prescribed by the act we are considering is undoubted. There
are, however, certain departments which are excepted from the
general power. The right of the States to administer their own
affairs through their legislative, executive, and judicial
departments, in their own manner through their own agencies, is
conceded by the uniform decisions of this court, and by the
practice of the Federal government from its organization. This
carries with it an exemption of those agencies and instruments from
the taxing power of the Federal government. If they may be taxed
lightly, they may be taxed heavily; if justly, oppressively. Their
operation may be impeded and may be destroyed if any interference
is permitted. Hence, the beginning of such taxation is not allowed
on the one side, is not claimed on the other."

															And again:

															"A municipal corporation like the city of Baltimore is a
representative not only of the State, but it is a portion of its
governmental power. It is one of its creatures, made for a specific
purpose, to exercise within a limited sphere the powers of the
State. The State may withdraw these local powers of government at
pleasure, and may, through its legislature or other appointed
channels, govern the local territory as it governs the State at
large. It may enlarge or contract its powers or destroy its
existence. As a portion of the State in the exercise of a limited
portion of the powers of the State, its revenues, like those of the
State, are not subject to taxation."

															In Collector v.
Day , 11 Wall. 113, 78 U. S. 124 ,
the court, speaking by Mr. Justice Nelson, said:

															"The general government and the States, although both exist
within the same territorial limits, are separate and distinct
sovereignties, acting separately and independently of each other
within their respective spheres. The former, in its appropriate
sphere, is supreme, but the States, within the limits of their
powers not granted or, in the language of the tenth amendment,
'reserved,' are as independent of the general government as that
government within its sphere is independent of the States. " Page 157 U. S. 604 According to the census reports, the bonds and securities of the
States amount to the sum of $1,243,268,000, on which the income or
interest exceeds the sum of $65,000,000 per annum, and the annual
tax of two percent upon this income or interest would be
$1,300,000.

															The law of Congress is also invalid in that it authorizes a tax
upon the salaries of the judges of the courts of the United States,
against the declaration of the Constitution that their compensation
shall not be diminished during their continuance in office. The law
declares that a tax of two percent shall be assessed, levied, and
collected and paid annually upon the gains, profits, and income
received in the preceding calendar year by every citizen of the
United States, whether said gains, profits, or income be derived
from any kind of property, rents, interest, dividends, or salaries, or from any profession, trade, employment, or
vocation, carried on within the United States or elsewhere, or from
any source whatever. The annual salary of a justice of the Supreme
Court of the United States is ten thousand dollars, and this act
levies a tax of two percent on six thousand dollars of this amount,
and imposes a penalty upon those who do not make the payment or
return the amount for taxation.

															The same objection, as presented to a consideration of the
objection to the taxation of the bonds and securities of the States
as not being specially taken in the cases before us is urged here
to a consideration of the objection to the taxation by the law of
the salaries of the judges of the courts of the United States. The
answer given to that objection may be also given to the present
one. The law of Congress being of a public nature, affecting the
interests of the whole community, and attacked for its
unconstitutionality in certain particulars, may be considered with
reference to other unconstitutional provisions called to our
attention upon examining the law, though not specifically noticed
in the objections taken in the records or briefs of counsel, that
the Constitution may not be violated from the carelessness or
oversight of counsel in any particular. See O'Neil v.
Vermont, 144 U. S. 323 , 144 U. S.
359 .

															Besides, there is a duty which this court owes to the one Page 157 U. S. 605 hundred other United States judges who have small salaries and
who, having their compensation reduced by the tax, may be seriously
affected by the law.

															The Constitution of the United States provides in the first
section of article III that:

															"The judicial power of the United States shall be vested in one
Supreme Court, and in such inferior courts as the Congress may from
time to time ordain and establish. The judges, both of the Supreme
and inferior courts, shall hold their offices during good behavior,
and shall, at stated times, receive for their services a
compensation, which shall not be diminished during their
continance in office. "

															The act of Congress under discussion imposes, as said, a tax on
six thousand dollars of this compensation, and therefore
diminishes, each year, the compensation provided for every justice.
How a similar law of Congress was regarded thirty years ago may be
shown by the following incident in which the justices of this court
were assessed at three percent upon their salaries. Against this,
Chief Justice Taney protested in a letter to Mr. Chase, then
Secretary of the Treasury, appealing to the above article in the
Constitution, and adding:

															"If it [his salary] can be diminished to that extent by the
means of a tax, it may in the same way be reduced from time to time
at the pleasure of the legislature."

															He explained in his letter the object of the constitutional
inhibition thus:

															"The judiciary is one of the three great departments of the
government created and established by the Constitution. Its duties
and powers are specifically set forth, and are of a character that
require it to be perfectly independent of the other departments.
And in order to place it beyond the reach, and above even the
suspicion, of any such influence, the power to reduce their
compensation is expressly withheld from Congress and excepted
from their power of legislation. "

															"Language could not be more plain than that used in the
Constitution. It is, moreover, one of its most important and
essential provisions. For the articles which limit the powers of
the legislative and executive branches of the government, and those
which provide safeguards for the protection of the citizen in his
person and property, would be of little value Page 157 U. S. 606 without a judiciary to uphold and maintain them which was free
from every influence, direct or indirect, that might by
possibility, in times of political excitement, warp their
judgment."

															"Upon these grounds, I regard an act of Congress retaining in
the Treasury a portion of the compensation of the judges as
unconstitutional and void."

															This letter of Chief Justice Taney was addressed to Mr. Chase,
then Secretary of the Treasury and afterwards the successor of Mr.
Taney as Chief Justice. It was dated February 16, 1863, but, as no
notice was taken of it, on the 10th of March following, at the
request of the Chief Justice, the Court ordered that his letter to
the Secretary of the Treasury be entered on the records of the
court, and it was so entered. And in the Memoir of the Chief
Justice, it is stated that the letter was, by this order, preserved
"to testify to future ages that, in war, no less than in peace,
Chief Justice Taney strove to protect the Constitution from
violation."

															Subsequently, in 1869 and during the administration of President
Grant, when Mr. Boutwell was Secretary of the Treasury and Mr.
Hoar, of Massachusetts, was Attorney General, there were in several
of the statutes of the United States for the assessment and
collection of internal revenue provisions for taxing the salaries
of all civil officers of the United States, which included, in
their literal application, the salaries of the President and of the
judges of the United States. The question arose whether the law
which imposed such a tax upon them was constitutional. The opinion
of the Attorney General thereon was requested by the Secretary of
the Treasury. The Attorney General, in reply, gave an elaborate
opinion advising the Secretary of the Treasury that no income tax
could be lawfully assessed and collected upon the salaries of those
officers who were in office at the time the statute imposing the
tax was passed, holding on this subject the views expressed by
Chief Justice Taney. His opinion is published in volume XIII of the
Opinions of the Attorneys General, at page 161. I am informed that
it has been followed Page 157 U. S. 607 ever since without question by the department supervising or
directing the collection of the public revenue.

															Here I close my opinion. I could not say less in view of
questions of such gravity that go down to the very foundation of
the government. If the provisions of the Constitution can be set
aside by an act of Congress, where is the course of usurpation to
end? The present assault upon capital is but the beginning. It will
be but the stepping stone to others, larger and more sweeping, till
our political contests will become a war of the poor against the
rich; a war constantly growing in intensity and bitterness.

															"If the court sanctions the power of discriminating taxation,
and nullifies the uniformity mandate of the Constitution," as said
by one who has been all his life a student of our institutions, "it
will mark the hour when the sure decadence of our present
government will commence." If the purely arbitrary limitation of
$4,000 in the present law can be sustained, none having less than
that amount of income being assessed or taxed for the support of
the government, the limitation of future Congresses may be fixed at
a much larger sum, at five or ten or twenty thousand dollars,
parties possessing an income of that amount alone being bound to
bear the burdens of government; or the limitation may be designated
at such an amount as a board of "walking delegates" may deem
necessary. There is no safety in allowing the limitation to be
adjusted except in strict compliance with the mandates of the
Constitution which require its taxation, if imposed by direct
taxes, to be apportioned among the States according to their
representation, and if imposed by indirect taxes, to be uniform in
operation and, so far as practicable, in proportion to their
property, equal upon all citizens. Unless the rule of the
Constitution governs, a majority may fix the limitation at such
rate as will not include any of their own number.

															I am of opinion that the whole law of 1894 should be declared
void and without any binding force -- that part which relates to
the tax on the rents, profits or income from real estate, that is,
so much as constitutes part of the direct tax, because not imposed
by the rule of apportionment according Page 157 U. S. 608 to the representation of the States, as prescribed by the
Constitution -- and that part which imposes a tax upon the bonds
and securities of the several States, and upon the bonds and
securities of their municipal bodies, and upon the salaries of
judges of the courts of the United States as being beyond the power
of Congress, and that part which lays duties, imposts and excises
as void in not providing for the uniformity required by the
Constitution in such cases.

															MR. JUSTICE WHITE with whom concurred MR. JUSTICE HARLAN,
dissenting.

															My brief judicial experience has convinced me that the custom of
filing long dissenting opinions is one "more honored in the breach
than in the observance." The only purpose which an elaborate
dissent can accomplish, if any, is to weaken the effect of the
opinion of the majority, and thus engender want of confidence in
the conclusions of courts of last resort. This consideration would
impel me to content myself with simply recording my dissent in the
present case were it not for the fact that I consider that the
result of the opinion of the court just announced is to overthrow a
long and consistent line of decisions, and to deny to the
legislative department of the government the possession of a power
conceded to it by universal consensus for one hundred years, and
which has been recognized by repeated adjudications of this court.
The issues presented are as follows:

															Complainant, as a stockholder in a corporation, avers that the
latter will voluntarily pay the income tax levied under the recent
act of Congress; that such tax is unconstitutional, and that its
voluntary payment will seriously affect his interest by defeating
his right to test the validity of the exaction, and also lead to a
multiplicity of suits against the corporation. The prayer of the
bill is as follows: First. That it may be decreed that the
provisions known as "The Income Tax Law," incorporated in the act
of Congress, passed August 15, 1894, are unconstitutional, null,
and void. Second. That the defendant be restrained from voluntarily
complying with the provisions of that act by making its returns and
statements, Page 157 U. S. 609 and paying the tax. The bill, therefore, presents two
substantial questions for decision: the right of the plaintiff to
relief in the form in which he claims it, and his right to relief
on the merits.

															The decisions of this Court hold that the collection of a tax
levied by the government of the United States will not be
restrained by its courts. Cheatham v. United States, 92 U. S. 85 ; Snyder v. Marks, 109 U. S. 189 . See also Elliott v.
Swartwout , 10 Pet. 137; City of
Philadelphia v. The Collector , 5 Wall. 720; Hornthall v. The
Collector , 9 Wall. 560. The same authorities have
established the rule that the proper course, in a case of illegal
taxation, is to pay the tax under protest or with notice of suit,
and then bring an action against the officer who collected it. The
statute law of the United States, in express terms, gives a party
who has paid a tax under protest the right to sue for its recovery.
Rev.Stat. § 3226.

															The act of 1867 forbids the maintenance of any suit "for the
purpose of restraining the assessment or collection of any tax."
The provisions of this act are now found in Rev.Stat. § 3224.

															The complainant is seeking to do the very thing which, according
to the statute and the decisions above referred to, may not be
done. If the corporator cannot have the collection of the tax
enjoined, it seems obvious that he cannot have the corporation
enjoined from paying it, and thus do by indirection what he cannot
do directly.

															It is said that such relief as is here sought has been
frequently allowed. The cases relied on are Dodge v.
Woolsey , 18 How. 331, and Hawes v.
Oakland, 104 U. S. 450 .
Neither of these authorities, I submit, is in point. In Dodge
v. Woolsey, the main question at issue was the validity of a
state tax, and that case did not involve the act of Congress to
which I have referred. Hawes v. Oakland was a controversy
between a stockholder and a corporation, and had no reference
whatever to taxation.

															The complainant's attempt to establish a right to relief upon
the ground that this is not a suit to enjoin the tax, but Page 157 U. S. 610 one to enjoin the corporation from paying it, involves the
fallacy already pointed out -- that is, that a party can exercise a
right indirectly which he cannot assert directly -- that he can
compel his agent, through process of this court, to violate an act
of Congress.

															The rule which forbids the granting of an injunction to restrain
the collection of a tax is founded on broad reasons of public
policy, and should not be ignored. In Cheatham v. United
States, 92 U. S. 85 , 92 U. S. 89 ,
which involved the validity of an income tax levied under an act of
Congress prior to the one here in issue, this court, through Mr.
Justice Miller, said:

															"If there existed in the courts, state or National, any general
power of impeding or controlling the collection of taxes or
relieving the hardship incident to taxation, the very existence of
the government might be placed in the power of a hostile judiciary. Dows v.
The City of Chicago , 11 Wall. 108. While a free
course of remonstrance and appeal is allowed within the departments
before the money is finally exacted, the general government has
wisely made the payment of the tax claimed, whether of customs or
of internal revenue, a condition precedent to a resort to the
courts by the party against whom the tax is assessed. In the
internal revenue branch, it has further prescribed that no such
suit shall be brought until the remedy by appeal has been tried;
and, if brought after this, it must be within six months after the
decision on the appeal. We regard this as a condition on which
alone the government consents to litigate the lawfulness of the
original tax. It is not a hard condition. Few governments have
conceded such a right on any condition. If the compliance with this
condition requires the party aggrieved to pay the money, he must do
it." 92 U.S.
85 , 92 U. S. 89 .

															Again, in Railroad Tax Cases, 92 U. S.
575 , 92 U. S. 613 ,
the court said:

															"That there might be no misunderstanding of the universality of
this principle, it was expressly enacted, in 1867, that 'no suit
for the purpose of restraining the assessment or collection of any
tax shall be maintained in any court.' Rev.Stat. sect. 3224. And
though this was intended to apply alone to taxes levied by the
United States, it shows the sense Page 157 U. S. 611 of Congress of the evils to be feared if courts of justice
could, in any case, interfere with the process of
collecting the taxes on which the government depends for its
continued existence. It is a wise policy. It is founded in the
simple philosophy, derived from the experience of ages, that the
payment of taxes has to be enforced by summary and stringent means
against a reluctant and often adverse sentiment, and, to do this
successfully, other instrumentalities and other modes of procedure
are necessary than those which belong to courts of justice. See
Cheatham v. Norvell, decided at this term; Nicoll v. United
States , 7 Wall. 122; Dows v.
Chicago , 11 Wall. 108."

															The contention that a right to equitable relief arises from the
fact that the corporator is without remedy unless such relief be
granted him is, I think, without foundation. This court has
repeatedly said that the illegality of a tax is not ground for the
issuance of an injunction against its collection if there be an
adequate remedy at law open to the payer. Dows v.
City of Chicago , 11 Wall. 108; Hannewinkle v.
Georgetown , 15 Wall. 547; Board of Liquidation
v. McComb, 92 U. S. 531 ; State Railroad Tax Cases, 92 U. S.
575 ; Union Pacific Railway v. Cheyenne, 113 U. S. 516 ; Milwaukee v. Koeffler, 116 U. S. 219 ; Pacific Express Co. v. Seibert, 142 U.
S. 339 -- as in the case where the state statute by
which the tax is imposed allows a suit for its recovery after
payment under protest. Shelton v. Platt, 139 U.
S. 591 ; Allen v. Pullman's Palace Car Co., 139 U. S. 658 .

															The decision here is that this court will allow, on the theory
of equitable right, a remedy expressly forbidden by the statutes of
the United States, though it has denied the existence of such a
remedy in the case of a tax levied by a State.

															Will it be said that, although a stockholder cannot have a
corporation enjoined from paying a state tax where the state
statute gives him the right to sue for its recovery, yet, when the
United States not only gives him such right, but, in addition,
forbids the issue of an injunction to prevent the payment of
Federal taxes, the court will allow to the stockholder Page 157 U. S. 612 a remedy against the United States tax which it refuses against
the state tax?

															The assertion that this is only a suit to prevent the voluntary
payment of the tax suggests that the court may, by an order
operating directly upon the defendant corporation, accomplish a
result which the statute manifestly intended should not be
accomplished by suit in any court. A final judgment forbidding the
corporation from paying the tax will have the effect to prevent its
collection, for it could not be that the court would permit a tax
to be collected from a corporation which it had enjoined from
paying. I take it to be beyond dispute that the collection of the
tax in question cannot be restrained by any proceeding or suit,
whatever its form, directly against the officer charged with the
duty of collecting such tax. Can the statute be evaded, in a suit
between a corporation and a stockholder, by a judgment forbidding
the former from paying the tax, the collection of which cannot be
restrained by suit in any court? Suppose, notwithstanding the final
judgment just rendered, the collector proceeds to collect from the
defendant corporation the taxes which the court declares, in this
suit, cannot be legally assessed upon it. If that final judgment is
sufficient in law to justify resistance against such collection,
then we have a case in which a suit has been maintained to restrain
the collection of taxes. If such judgment does not
conclude the collector, who was not a party to the suit in which it
was rendered, then it is of no value to the plaintiff. In other
words, no form of expression can conceal the fact that the real
object of this suit is to prevent the collection of taxes imposed
by Congress, notwithstanding the express statutory requirement that
"no suit for the purpose of restraining the assessment or
collection of any tax shall be maintained in any court." Either the
decision of the constitutional question is necessary or it is not.
If it is necessary, then the court, by way of granting equitable
relief, does the very thing which the act of Congress forbids. If
it is unnecessary, then the court decides the act of Congress here
asserted unconstitutional, without being obliged to do so by the
requirements of the case before it. Page 157 U. S. 613 This brings me to the consideration of the merits of the
cause.

															The constitutional provisions respecting Federal taxation are
four in number, and are as follows:

															1. "Representatives and direct taxes shall be apportioned among
the several States, which may be included within this Union,
according to their respective numbers, which shall be determined by
adding to the whole number of free persons, including those bound
to service for a term of years and excluding Indians not taxed,
three-fifths of all other persons." Art. I, sec. 2, clause 3. (The
Fourteenth Amendment modified this provision, so that the whole
number of persons in each State should be counted, "Indians not
taxed" excluded.)

															2. "The Congress shall have power to lay and collect taxes,
duties, imposts, and excises, to pay the debts and provide for the
common defence and general welfare of the United States; but all
duties, imposts, and excises shall be uniform throughout the United
States." Art. I, sec. 8, clause 1.

															3. "No capitation or other direct tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken." Art. I, sec. 9, clause 4.

															4. "No tax or duty shall be laid on articles exported from any
State." Art. I, sec. 9, clause 5.

															It has been suggested that, as the above provisions ordain the
apportionment of direct taxes, and authorize Congress to "lay and
collect taxes, duties, imposts, and excises," therefore there is a
class of taxes which are neither direct, and are not duties,
imposts, and excises, and are exempt from the rule of apportionment
on the one hand or of uniformity on the other. The soundness of
this suggestion need not be discussed, as the words, "duties,
imposts, and excises," in conjunction with the reference to direct
taxes, adequately convey all power of taxation to the Federal
government.

															It is not necessary to pursue this branch of the argument, since
it is unquestioned that the provisions of the Constitution vest in
the United States plenary powers of taxation, that is, all the
powers which belong to a government as such, except Page 157 U. S. 614 that of taxing exports. The court in this case so says, and
quotes approvingly the language of this court, speaking through Mr.
Chief Justice Chase, in License Tax
Cases , 5 Wall. 462, 72 U. S. 471 ,
as follows:

															"It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited and thus
only, it reaches every subject, and may be exercised at
discretion."

															In deciding, then, the question of whether the income tax
violates the Constitution, we have to determine not the existence
of a power in Congress, but whether an admittedly unlimited power
to tax (the income tax not being a tax on exports) has been used
according to the restrictions as to methods for its exercise, found
in the Constitution. Not power, it must be borne in mind, but the
manner of its use is the only issue presented in this case. The
limitations in regard to the mode of direct taxation imposed by the
Constitution are that capitation and other direct taxes shall be
apportioned among the States according to their respective numbers,
while duties, imposts, and excises must be uniform throughout the
United States. The meaning of the word "uniform" in the
Constitution need not be examined, as the court is divided upon
that subject, and no expression of opinion thereon is conveyed or
intended to be conveyed in this dissent.

															In considering whether we are to regard an income tax as
"direct" or otherwise, it will, in my opinion, serve no useful
purpose, at this late period of our political history, to seek to
ascertain the meaning of the word "direct" in the Constitution by
resorting to the theoretical opinions on taxation found in the
writings of some economists prior to the adoption of the
Constitution or since. These economists teach that the question of
whether a tax is direct or indirect depends not upon whether it is
directly levied upon a person, but upon whether, when so levied, it
may be ultimately shifted from the person Page 157 U. S. 615 in question to the consumer, thus becoming, while direct in the
method of its application, indirect in its final results because it
reaches the person who really pays it only indirectly. I say it
will serve no useful purpose to examine these writers because
whatever may have been the value of their opinions as to the
economic sense of the word "direct," they cannot now afford any
criterion for determining its meaning in the Constitution, inasmuch
as an authoritative and conclusive construction has been given to
that term, as there used, by an interpretation adopted shortly
after the formation of the Constitution by the legislative
department of the government and approved by the Executive, by the
adoption of that interpretation from that time to the present
without question, and its exemplification and enforcement in many
legislative enactments, and its acceptance by the authoritative
text writers on the Constitution, by the sanction of that
interpretation, in a decision of this court rendered shortly after
the Constitution was adopted, and finally by the repeated
reiteration and affirmance of that interpretation, so that it has
become imbedded in our jurisprudence, and therefore may be
considered almost a part of the written Constitution itself.

															Instead, therefore, of following counsel in their references to
economic writers and their discussion of the motives and thoughts
which may or may not have been present in the minds of some of the
framers of the Constitution, as if the question before us were one
of first impression, I shall confine myself to a demonstration of
the truth of the propositions just laid down.

															By the act of June 5, 1794, c. 45, 1 Stat. 373, Congress levied,
without reference to apportionment, a tax on carriages "for the
conveyance of persons." The act provided

															"that there shall be levied, collected, and paid upon all
carriages for the conveyance of persons which shall be kept by, or
for any person for his or her own use, or to be let out to hire, or
for the conveying of passengers, the several duties and rates
following;"

															and then came a yearly tax on every

															"coach, chariot, phaeton, and coachee, every four-wheeled and
every Page 157 U. S. 616 two-wheeled top carriage, and upon every other two-wheeled
carriage,"

															varying in amount according to the vehicle.

															The debates which took place at the passage of that act are
meagerly preserved. It may, however, be inferred from them that
some considered that whether a tax was "direct" or not in the sense
of the Constitution depended upon whether it was levied on the
object or on its use. The carriage tax was defended by a few on the
ground that it was a tax on consumption. Mr. Madison opposed it as
unconstitutional, evidently upon the conception that the word
"direct" in the Constitution was to be considered as having the
same meaning as that which had been attached to it by some economic
writers. His view was not sustained, and the act passed by a large
majority -- forty-nine to twenty-two. It received the approval of
Washington. The Congress which passed this law numbered among its
members many who sat in the convention which framed the
Constitution. It is moreover safe to say that each member of that
Congress, even although he had not been in the convention, had, in
some way, either directly or indirectly, been an influential actor
in the events which led up to the birth of that instrument. It is
impossible to make an analysis of this act which will not show that
its provisions constitute a rejection of the economic construction
of the word "direct," and this result equally follows whether the
tax be treated as laid on the carriage itself or on its use by the
owner. If viewed in one light, then the imposition of the tax on
the owner of the carriage, because of his ownership, necessarily
constituted a direct tax under the rule as laid down by economists.
So, also, the imposition of a burden of taxation on the owner for
the use by him of his own carriage made the tax direct according to
the same rule. The tax having been imposed without apportionment,
it follows that those who voted for its enactment must have given
to the word "direct" in the Constitution a different significance
from that which is affixed to it by the economists referred to.

															The validity of this carriage tax was considered by this court
in Hylton v. United
States , 3 Dall. 171. Chief Justice Ellsworth and
Mr. Justice Cushing took no part in Page 157 U. S. 617 the decision. Mr. Justice Wilson stated that he had, in the
Circuit Court of Virginia, expressed his opinion in favor of the
constitutionality of the tax. Mr. Justice Chase, Mr. Justice
Paterson, and Mr. Justice Iredell each expressed the reasons for
his conclusions. The tax, though laid, as I have said, on the
carriage, was held not to be a direct tax under the Constitution.
Two of the judges who sat in that case (Mr. Justice Paterson and
Mr. Justice Wilson) had been distinguished members of the
constitutional convention. Excerpts from the observations of the
justices are given in the opinion of the Court. Mr. Justice
Paterson, in addition to the language there quoted, spoke as
follows, p. 3 U. S. 177 (the
italics being mine):

															" I never entertained a doubt that the principal, I will not
say the only, objects that the framers of the Constitution
contemplated as falling within the rule of apportionment were a
capitation tax and a tax on land. Local considerations, and
the particular circumstances and relative situation of the States,
naturally lead to this view of the subject. The provision was made
in favor of the Southern States. They possessed a large number of
slaves; they had extensive tracts of territory, thinly settled and
not very productive. A majority of the States had but few slaves,
and several of them a limited territory, well settled, and in a
high state of cultivation. The Southern States, if no provision had
been introduced in the Constitution, would have been wholly at the
mercy of the other States. Congress, in such case, might tax slaves
at discretion or arbitrarily, and land in every part of the Union
after the same rate or measure -- so much a head in the first
instance and so much an acre in the second. To guard them against
imposition in these particulars was the reason of introducing the
clause in the Constitution which directs that representatives and
direct taxes shall be apportioned among the States according to
their respective numbers."

															It is evident that Mr. Justice Chase coincided with these views
of Mr. Justice Paterson, though he was perhaps not quite so firmly
settled in his convictions, for he said, p. 3 U. S. 176 :

															"I am inclined to think, but of this I do not give a
judicial Page 157 U. S. 618 opinion, that the direct taxes contemplated by the Constitution
are only two, to-wit, a capitation or poll tax simply, without
regard to property, profession, or any other circumstances, and the
tax on land. I doubt whether a tax by a general assessment of
personal property within the United States is included within the
term 'direct tax.'"

															Mr. Justice Iredell certainly entertained similar views, since
he said, p. 3 U. S. 183 :

															"Some difficulties may occur which we do not at present foresee.
Perhaps a direct tax in the sense of the Constitution can mean
nothing but a tax on something inseparably annexed to the soil;
something capable of apportionment under all such circumstances. A
land or poll tax may be considered of this description. . . . In
regard to other articles, there may possibly be considerable
doubt."

															These opinions strongly indicate that the real convictions of
the justices were that only capitation taxes and taxes on land were
direct within the meaning of the Constitution, but they doubted
whether some other objects of a kindred nature might not be
embraced in that word. Mr. Justice Paterson had no doubt whatever
of the limitation, and Justice Iredell's doubt seems to refer only
to things which were inseparably connected with the soil, and which
might therefore be considered, in a certain sense, as real
estate.

															That case, however, established that a tax levied without
apportionment on an object of personal property was not a "direct
tax" within the meaning of the Constitution. There can be no doubt
that the enactment of this tax and its interpretation by the court,
as well as the suggestion in the opinions delivered, that nothing
was a direct tax within the meaning of the Constitution but a
capitation tax and a tax on land, was all directly in conflict with
the views of those who claimed at the time that the word "direct"
in the Constitution was to be interpreted according to the views of
economists. This is conclusively shown by Mr. Madison's language.
He asserts not only that the act had been passed contrary to the
Constitution, but that the decision of the court was likewise in
violation of that instrument. Ever since the announcement Page 157 U. S. 619 of the decision in that case, the legislative department of the
government has accepted the opinions of the justices as well as the
decision itself as conclusive in regard to the meaning of the word
"direct," and it has acted upon that assumption in many instances,
and always with Executive endorsement. All the acts passed levying
direct taxes confined them practically to a direct levy on land.
True, in some of these acts, a tax on slaves was included, but this
inclusion, as has been said by this court, was probably based upon
the theory that these were, in some respects, taxable along with
the land, and therefore their inclusion indicated no departure by
Congress from the meaning of the word "direct," necessarily
resulting from the decision in the Hylton case, and which,
moreover, had been expressly elucidated and suggested as being
practically limited to capitation taxes and taxes on real estate by
the justices who expressed opinions in that case.

															These acts imposing direct taxes having been confined in their
operation exclusively to real estate and slaves, the subject
matters indicated as the proper object of direct taxation in the Hylton case, are the strongest possible evidence that this
suggestion was accepted as conclusive, and had become a settled
rule of law. Some of these acts were passed at times of great
public necessity, when revenue was urgently required. The fact that
no other subjects were selected for the purposes of direct taxation
except those which the judges in the Hylton case had
suggested as appropriate therefor seems to me to lead to a
conclusion which is absolutely irresistible -- that the meaning
thus affixed to the word "direct" at the very formation of the
government was considered as having been as irrevocably determined
as if it had been written in the Constitution in express terms. As
I have already observed, every authoritative writer who has
discussed the Constitution from that date down to this has treated
this judicial and legislative ascertainment of the meaning of the
word "direct" in the Constitution as giving it a constitutional
significance without reference to the theoretical distinction
between "direct" and "indirect" made by some economists prior to
the Constitution or since. This doctrine Page 157 U. S. 620 has become a part of the hornbook of American constitutional
interpretation, has been taught as elementary in all the law
schools, and has never since then been anywhere authoritatively
questioned. Of course, the textbooks may conflict in some
particulars, or indulge in reasoning not always consistent, but, as
to the effect of the decision in the Hylton case and the
meaning of the word "direct" in the Constitution resulting
therefrom, they are a unit. I quote briefly from them.

															Chancellor Kent, in his Commentaries thus states the
principle:

															"The construction of the powers of Congress relative to taxation
was brought before the Supreme Court in 1796 in the case of Hylton v. The United States. By the act of 5th June, 1794,
Congress laid a duty upon carriages for the conveyance of persons,
and the question was whether this was a direct tax within
the meaning of the Constitution. If it was not a direct tax, it was
admitted to be rightly laid under that part of the Constitution
which declares that all duties, imposts, and excises shall be
uniform throughout the United States; but if it was a direct tax,
it was not constitutionally laid, for it must then be laid
according to the census under that part of the Constitution which
declares that direct taxes shall be apportioned among the several
States according to numbers. The Circuit Court in Virginia was
divided in opinion on the question, but, on appeal to the Supreme
Court, it was decided that the tax on carriages was not a direct
tax within the letter or meaning of the Constitution, and was
therefore constitutionally laid."

															"The question was deemed of very great importance, and was
elaborately argued. It was held that a general power was given to
Congress to lay and collect taxes of every kind or nature, without
any restraint. They had plenary power over every species of taxable
property except exports. But there were two rules prescribed for
their government: the rule of uniformity and the rule of
apportionment. Three kinds of taxes, viz., duties,
imposts, and excises, were to be laid by the first rule, and
capitation and other direct taxes by the second rule. If there were
any other species of taxes, as the Page 157 U. S. 621 court seemed to suppose there might be, that were not direct and
not included within the words duties, imposts, or excises, they
were to be laid by the rule of uniformity or not as Congress should
think proper and reasonable."

															"The Constitution contemplated no taxes as direct taxes but such
as Congress could lay in proportion to the census, and the rule of
apportionment could not reasonably apply to a tax on carriages, nor
could the tax on carriages be laid by that rule without very great
inequality and injustice. If two states, equal in census, were each
to pay 8,000 dollars by a tax on carriages, and in one state there
were 100 carriages and in another 1,000, the tax on each carriage
would be ten times as much in one state as in the other. While A,
in the one state, would pay for his carriage eight dollars, B, in
the other state, would pay for his carriage eighty dollars. In this
way, it was shown by the court that the notion that a tax on
carriages was a direct tax within the purview of the Constitution,
and to be apportioned according to the census would lead to the
grossest abuse and oppression. This argument was conclusive against
the construction set up, and the tax on carriages was considered as
included within the power to lay duties, and the better opinion
seemed to be that the direct taxes contemplated by the Constitution
were only two, viz., a capitation or poll tax and a tax on
land."

															1 Kent Com. 254, 256.

															Story, speaking on the same subject, 1 Story Const. § 955,
says:

															"Taxes on lands, houses, and other permanent real estate, or on
parts or appurtenances thereof, have always been deemed of the same
character, that is, direct taxes. It has been seriously doubted if,
in the sense of the Constitution, any taxes are direct taxes except
those on polls or on lands. Mr. Justice Chase, in Hylton v. United
States , 3 Dall. 171, said:"

															"I am inclined to think that the direct taxes contemplated by
the Constitution are only two, viz: a capitation or poll
tax simply, without regard to property, profession, or other
circumstances, and a tax on land. I doubt whether a tax by a
general assessment of personal property within the United States is
included within the term 'direct tax.'"

															"Mr. Justice Paterson, in the same case, said:"

															"It is not necessary to determine Page 157 U. S. 622 whether a tax on the produce of land be a direct or an indirect
tax. Perhaps the immediate product of land, in its original and
crude state, ought to be considered as a part of the land itself.
When the produce is converted into a manufacture, it assumes a new
shape, etc. Whether 'direct taxes,' in the sense of the
Constitution, comprehend any other tax than a capitation tax or a
tax on land is a questionable point, etc. I never entertained a
doubt that the principal, I will not say the only, objects that the
framers of the Constitution contemplated, as falling within the
rule of apportionment, were a capitation tax and a tax on
land."

															"And he proceeded to state that the rule of apportionment, both
as regards representatives and as regards direct taxes, was adopted
to guard the Southern States against undue impositions and
oppressions in the taxing of slaves. Mr. Justice Iredell, in the
same case, said:"

															"Perhaps a direct tax, in the sense of the Constitution, can
mean nothing but a tax on something inseparably annexed to the
soil; something capable of apportionment under all such
circumstances. A land or poll tax may be considered of this
description. The latter is to be considered so, particularly under
the present Constitution, on account of the slaves in the Southern
States, who give a ratio in the representation in the proportion of
three to five. Either of these is capable of an apportionment. In
regard to other articles, there may possibly be considerable
doubt."

															"The reasoning of the Federalist seems to lead to the same
result."

															Cooley, in his work on Constitutional Limitations 595, 5th ed.,
marginal paging *480, thus tersely states the rule:

															"Direct taxes, when laid by Congress, must be apportioned among
the several States according to the representative population. The
term 'direct taxes,' as employed in the Constitution, has a
technical meaning, and embraces capitation and land taxes
only."

															Miller on the Constitution 37 thus puts it:

															"Under the provisions already quoted, the question came up as to
what is a 'direct tax,' and also upon what property it is to be
levied, as distinguished from any other tax. In regard to this, it
is sufficient to say that it is believed that no other than a
capitation tax of so much per head and a land tax is a direct
tax Page 157 U. S. 623 within the meaning of the Constitution of the United States. All
other taxes, except imposts are properly called excise taxes.
Direct taxes, within the meaning of the Constitution, are only
capitation taxes, as expressed in that instrument, and taxes on
real estate."

															In Pomeroy's Constitutional Law (§ 281), we read as follows:

															"It becomes necessary, therefore, to inquire a little more
particularly: what are direct and what indirect taxes? Few cases on
the general question of taxation have arisen and been decided by
the Supreme Court for the simple reason that, until the past few
years, the United States has generally been able to obtain all
needful revenue from the single source of duties upon imports.
There can be no doubt, however, that all the taxes provided for in
the internal revenue acts now in operation are indirect."

															"This subject came before the Supreme Court of the United States
in a very early case, Hylton v. The United States. In the
year 1794, Congress laid a tax of ten dollars on all carriages, and
the rate was thus made uniform. The validity of the statute was
disputed; it was claimed that the tax was direct, and should have
been apportioned among the states. The court decided that this tax
was not direct. The reasons given for the decision are
unanswerable, and would seem to cover all the provisions of the
present internal revenue laws."

															Hare, in his treatise on American Constitutional Law (vol. 1,
pp. 249, 250), is to the like effect:

															"Agreeably to section 9 of article I, paragraph 4, 'no
capitation or other direct tax shall be laid except in proportion
to the census or enumeration hereinbefore directed to be taken,'
while section 3 of the same article requires that 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."

															Burroughs on Taxation (p. 502) takes the same view:

															" Direct taxes -- The kinds of taxation authorized are
both direct and indirect. The construction given to the expression
'direct taxes' is that it includes only a tax on land and a
poll Page 157 U. S. 624 tax, and this is in accord with the views of writers upon
political economy."

															Ordronaux, in his Constitutional Legislation (p. 225), says:

															"Congress having been given the power 'to lay and collect taxes,
duties, imposts, and excises,' the above three provisions are
limitations upon the exercise of this authority:"

															"1st. By distinguishing between direct and indirect taxes as to
their mode of assessment;"

															"2d. By establishing a permanent freedom of trade between the
States; and"

															"3d. By prohibiting any discrimination in favor of particular
States through revenue laws establishing a preference between their
ports and those of the others."

															"These provisions should be read together, because they are at
the foundation of our system of national taxation."

															"The two rules prescribed for the government of Congress in
laying taxes are those of apportionment for direct taxes and
uniformity for indirect. In the first class are to be found
capitation or poll taxes and taxes on land; in the second, duties,
imposts, and excises."

															"The provision relating to capitation taxes was made in favor of
the Southern States, and for the protection of slave property.
While they possessed a large number of persons of this class, they
also had extensive tracts of sparsely settled and unproductive
lands. At the same time, an opposite condition, both as to land
territory and population, existed in a majority of the other
States. Were Congress permitted to tax slaves and land in all parts
of the country at a uniform rate, the Southern Slave States must
have been placed at a great disadvantage. Hence, and to guard
against this inequality of circumstances, there was introduced into
the Constitution the further provision that 'representatives and
direct taxes shall be apportioned among the States according to
their respective numbers.' This changed the basis of direct
taxation from a strictly monetary standard, which could not
equitably be made uniform throughout the country, to one resting
upon population as the measure of representation. But for this,
Congress might have taxed slaves arbitrarily and Page 157 U. S. 625 at its pleasure as so much property, and land uniformly
throughout the Union regardless of differences in productiveness.
It is not strange, therefore, that, in Hylton v. United
States, the court said that"

															"the rule of apportionment is radically wrong, and cannot be
supported by any solid reasoning. It ought not, therefore, to be
extended by construction. Apportionment is an operation on States
and involves valuations and assessments which are arbitrary, and
should not be resorted to but in case of necessity."

															"Direct taxes being now well settled in their meaning, a tax on
carriages left for the use of the owner is not a capitation tax,
nor a tax on the business of an insurance company, nor a tax on a
bank's circulation, nor a tax on income, nor a succession tax. The
foregoing are not, properly speaking, direct taxes within the
meaning of the Constitution, but excise taxes or duties."

															Black, writing on Constitutional Law, says:

															"But the chief difficulty has arisen in determining what is the
difference between direct taxes and such as are indirect. In
general usage, and according to the terminology of political
economy, a direct tax is one which is levied upon the person who is
to pay it, or upon his land or personalty, or his business or
income, as the case may be. An indirect tax is one assessed upon
the manufacturer or dealer in the particular commodity, and paid by
him, but which really falls upon the consumer, since it is added to
the market price of the commodity which he must pay. But the course
of judicial decision has determined that the term 'direct,' as here
applied to taxes, is to be taken in a more restricted sense. The
Supreme Court has ruled that only land taxes and capitation taxes
are 'direct,' and no others. In 1794, Congress levied a tax of ten
dollars on all carriages kept for use, and it was held that this
was not a direct tax. And so also an income tax is not to be
considered direct. Neither is a tax on the circulation of state
banks, nor a succession tax, imposed upon every 'devolution of
title to real estate.'"

															Opinions cited on page 162.

															Not only have the other departments of the government accepted
the significance attached to the word "direct" in the Page 157 U. S. 626 Hylton case by their actions as to direct taxes, but
they have also relied on it as conclusive in their dealings with
indirect taxes by levying them solely upon objects which the judges
in that case declared were not objects of direct taxation. Thus,
the affirmance by the Federal legislature and executive of the
doctrine established as a result of the Hylton case has
been two-fold.

															From 1861 to 1870. many laws levying taxes on income were
enacted, as follows: Act of August 5, 1861, c. 45, 12 Stat. 292,
309, 311; Act of July 1, 1862, c. 119, 12 Stat. 432, 473, 47; Act
of March 3, 1863, c. 74, 12 Stat. 713, 718, 723 Act of June 30,
1864, c. 173, 13 Stat. 223, 281, 285; Act of March 3, 1865, c. 78,
18 Stat. 469, 479, 481; Act of March 10, 1866, c. 15, 14 Stat. 4,
5; Act of July 13, 1866, c. 184, 14 Stat. 98, 137, 140; Act of
March 2, 1867, c. 169, 14 Stat. 471, 477, 480; Act of July 14,
1870, c. 255, 16 Stat. 256, 261.

															The statutes above referred to all cover income and every
conceivable source of revenue from which it could result -- rentals
from real estate, products of personal property, the profits of
business or professions.

															The validity of these laws has been tested before this court.
The first case on the subject was that of the Pacific Insurance
Company v. Soule, 7 Wall. 433, 74 U. S. 443 .
The controversy in that case arose under the ninth section of the
act of July 13, 1866, 14 Stat. 137, 140, which imposed a tax on

															"all dividends in scrip and money, thereafter declared due,
wherever and whenever the same shall be payable, to stockholders,
policyholders, or depositors or parties whatsoever, including
nonresidents, whether citizens or aliens, as part of the earnings,
incomes, or gains of any bank, trust company, savings institution,
and of any fire, marine, life, or inland insurance company, either
stock or mutual, under whatever name or style known or called in
the United States or Territories, whether specially incorporated or
existing under general laws, and on all undistributed sum or sums
made or added during the year to their surplus or contingent
funds."

															It will be seen that the tax imposed was levied on the income of
insurance companies as a unit, including every possible Page 157 U. S. 627 source of revenue, whether from personal or real property, from
business gains or otherwise. The case was presented here on a
certificate of division of opinion below. One of the questions
propounded was

															"whether the taxes paid by the plaintiff and sought to be
recovered in this action are not direct taxes within the meaning of
the Constitution of the United States?"

															The issue, therefore, necessarily brought before this court was
whether an act imposing an income tax on every possible source of
revenue was valid or invalid. The case was carefully, ably,
elaborately, and learnedly argued. The brief on behalf of the
company, filed by Mr. Wills, was supported by another signed by Mr.
W. O. Bartlett, which covered every aspect of the contention. It
rested the weight of its argument against the statute on the fact
that it included the rents of real estate among the sources of
income taxed, and therefore put a direct tax upon the land. Able as
have been the arguments at bar in the present case, an examination
of those then presented will disclose the fact that every view here
urged was there pressed upon the court with the greatest ability,
and after exhaustive research, equalled but not surpassed by the
eloquence and learning which has accompanied the presentation of
this case. Indeed, it may be said that the principal authorities
cited and relied on now can be found in the arguments which were
then submitted. It may be added that the case on behalf of the
government was presented by Attorney General Evarts.

															The court answered all the contentions by deciding the generic
question of the validity of the tax, thus passing necessarily upon
every issue raised, as the whole necessarily includes every one of
its parts. I quote the reasoning applicable to the matter now in
hand:

															"The sixth question is:"

															"Whether the taxes paid by the plaintiff and sought to be
recovered back in this action are not direct taxes within
the meaning of the Constitution of the United States."

															"In considering this subject, it is proper to advert to the
several provisions of the Constitution relating to taxation by
Congress."

															"Representatives and direct taxes shall be apportioned among the
several States which shall be included Page 157 U. S. 628 in this Union according to their respective numbers,"

															"etc."

															"Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debt and provide for the common
defence and general welfare of the United States; but all duties,
imposts, and excises shall be uniform throughout the United
States."

															" No capitation or other direct tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken."

															" No tax or duty shall be laid on articles exported from any
State."

															"These clauses contain the entire grant of the taxing power by
the organic law, with the limitations which that instrument
imposes."

															"The national government, though supreme within its own sphere,
is one of limited jurisdiction and specific functions. It has no
faculties but such as the Constitution has given it either
expressly or incidentally by necessary intendment. Whenever any act
done under its authority is challenged, the proper sanction must be
found in its charter or the act is ultra vires and void.
This test must be applied in the examination of the question before
us. If the tax to which it refers is a 'direct tax,' it is clear
that it has not been laid in conformity to the requirements of the
Constitution. It is therefore necessary to ascertain to which of
the categories named in the eighth section of the first article it
belongs."

															"What are direct taxes was elaborately argued and
considered by this court in Hylton v. United States, decided in the year 1796. One of the members of the court, Justice
Wilson, had been a distinguished member of the convention which
framed the Constitution. It was unanimously held by the four
justices who heard the argument that a tax upon carriages kept by
the owner for his own use was not a direct tax. Justice
Chase said:"

															"I am inclined to think, but of this I do not give a judicial
opinion, that the direct taxes contemplated by the Constitution are
only two, to-wit, a capitation or poll tax simply, without regard
to property, profession, or any other circumstances, and a tax on
land."

															"Paterson, Justice, followed in the same line of remark. He
said:"

															"I never entertained a doubt that the principal -- I will not
say Page 157 U. S. 629 the only -- object the framers of the Constitution contemplated
as falling within the rule of apportionment was a capitation tax or
a tax on land. . . . The Constitution declares that a capitation
tax is a direct tax, and, both in theory and practice, a tax on
land is deemed to be a direct tax. In this way, the terms 'direct
taxes' and 'capitation and other direct taxes' are satisfied."

															"The views expressed in this case are adopted by Chancellor Kent
and Justice Story in their examination of the subject. Duties are
defined by Tomlin to be things due and recoverable by law. The
term, in its widest signification, is hardly less comprehensive
than 'taxes.' It is applied in its most restricted meaning meaning
to customs, and in that sense is nearly the synonym of
'imposts.'"

															"Impost is a duty on imported goods and merchandise. In a larger
sense, it is any tax or imposition. Cowell says it is distinguished
from custom "because custom is rather the profit which the prince
makes on goods shipped out." Mr. Madison considered the terms
"duties" and "imposts" in these clauses as synonymous. Judge Tucker
thought "they were probably intended to comprehend every species of
tax or contribution not included under the ordinary terms, taxes and excises.'"" "Excise is defined to be an inland imposition, sometimes upon
the consumption of the commodity and sometimes upon the retail
sale; sometimes upon the manufacturer and sometimes upon the
vendor."

															"The taxing power is given in the most comprehensive terms. The
only limitations imposed are that direct taxes, including
the capitation tax, shall be apportioned, that duties, imposts, and
excises shall be uniform, and that no duties shall be imposed upon
articles exported from any State. With these exceptions, the
exercise of the power is, in all respects, unfettered."

															"If a tax upon carriages kept for his own use by the owner is
not a direct tax, we can see no ground upon which a tax upon the
business of an insurance company can be held to belong to that
class of revenue charges."

															"It has been held that Congress may require direct taxes to Page 157 U. S. 630 be laid and collected in the Territories as well as in the
States."

															"The consequences which would follow the apportionment of the
tax in question among the States and Territories of the Union in
the manner prescribed by the Constitution must not be overlooked.
They are very obvious. Where such corporations are numerous and
rich, it might be light; where none exist, it could not be
collected; where they are few and poor, it would fall upon them
with such weight as to involve annihilation. It cannot be supposed
that the framers of the Constitution intended that any tax should
be apportioned the collection of which, on that principle, would be
attended with such results. The consequences are fatal to the
proposition."

															"To the question under consideration it must be answered that
the tax to which it relates is not a direct tax, but a duty or
excise; that it was obligatory on the plaintiff to pay it."

															"The other questions certified up are deemed to be sufficiently
answered by the answers given to the first and sixth
questions."

															This opinion, it seems to me, closes the door to discussion in
regard to the meaning of the word "direct" in the Constitution, and
renders unnecessary a resort to the conflicting opinions of the
framers or to the theories of the economists. It adopts that
construction of the word which confines it to capitation taxes and
a tax on land, and necessarily rejects the contention that that
word was to be construed in accordance with the economic theory of
shifting a tax from the shoulders of the person upon whom it was
immediately levied to those of some other person. This decision,
moreover, is of great importance because it is an authoritative
reaffirmance of the Hylton case and an approval of the
suggestions there made by the justices, and constitutes another
sanction given by this court to the interpretation of the
Constitution adopted by the legislative, executive, and judicial
departments of the government, and thereafter continuously acted
upon.

															Not long thereafter, in Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 541 , 75 U. S. 546 ,
the question of the application of the word "direct" was again
submitted to this court. The issue there was whether a tax on the
circulation of state banks was "direct" within Page 157 U. S. 631 the meaning of the Constitution. It was ably argued by the most
distinguished counsel; Reverdy Johnson and Caleb Cushing
representing the bank, and Attorney General Hoar the United States.
The brief of Mr. Cushing again presented nearly every point now
urged upon our consideration. It cited copiously from the opinions
of Adam Smith and others. The constitutionality of the tax was
maintained by the government on the ground that the meaning of the
word "direct" in the Constitution, as interpreted by the Hylton case, as enforced by the continuous legislative
construction, and as sanctioned by the consensus of opinion already
referred to, was finally settled. Those who assailed the tax there
urged, as is done here, that the Hylton case was not
conclusive because the only question decided was the particular
matter at issue, and insisted that the suggestions of the judges
were mere dicta, and not to be followed. They said that Hylton
v. United States adjudged one point alone, which was that a
tax on a carriage was not a direct tax, and that. from the
utterances of the judges in the case. it was obvious that the
general question of what was a direct tax was but crudely
considered. Thus, the argument there presented to this court the
very view of the Hylton case which has been reiterated in
the argument here, and which is sustained now. What did this court
say then, speaking through Chief Justice Chase, as to these
arguments? I take very fully from its opinion:

															"Much diversity of opinion has always prevailed upon the
question, what are direct taxes? Attempts to answer it by reference
to the definitions of political economists have been frequently
made, but without satisfactory results. The enumeration of the
different kinds of taxes which Congress was authorized to impose
was probably made with very little reference to their speculations.
The great work of Adam Smith, the first comprehensive treatise on
political economy in the English language, had then been recently
published; but in this work, though there are passages which refer
to the characteristic difference between direct and indirect
taxation, there is nothing which affords any valuable light on the
use of the words 'direct taxes' in the Constitution. " Page 157 U. S. 632 "We are obliged, therefore, to resort to historical evidence,
and to seek the meaning of the words in the use and in the opinion
of those whose relations to the government and means of knowledge
warranted them in speaking with authority."

															"And, considered in this light, the meaning and application of
the rule as to direct taxes appears to us quite clear."

															"It is, as we think, distinctly shown in every act of Congress
on the subject."

															"In each of these acts, a gross sum was laid upon the United
States, and the total amount was apportioned to the several States
according to their respective numbers of inhabitants, as
ascertained by the last preceding census. Having been apportioned,
provision was made for the imposition of the tax upon the subjects
specified in the act, fixing its total sum."

															"In 1798, when the first direct tax was imposed, the total
amount was fixed at two millions of dollars; in 1813, the amount of
the second direct tax was fixed at three millions; in 1815, the
amount of the third at six millions, and it made an annual tax; in
1816, the provision making the tax annual was repealed by the
repeal of the first section of the act of 1815, and the total
amount was fixed for that year at three millions of dollars. No
other direct tax was imposed until 1861, when a direct tax of
twenty millions of dollars was laid and made annual; but the
provision making it annual was suspended, and no tax, except that
first laid, was ever apportioned. In each instance, the total sum
was apportioned among the States by the constitutional rule, and
was assessed at prescribed rates on the subjects of the tax. These
subjects, in 1798, 1813, 1815, 1816, were lands, improvements,
dwelling houses, and slaves, and, in 1861, lands, improvements, and
dwelling houses only. Under the act of 1798, slaves were assessed
at fifty cents on each; under the other acts, according to
valuation by assessors."

															"This review shows that personal property, contracts,
occupations, and the like have never been regarded by Congress as
proper subjects of direct tax. It has been supposed that slaves
must be considered as an exception to this observation. But the
exception is rather apparent than real. As persons, slaves Page 157 U. S. 633 were proper subjects of a capitation tax, which is described in
the Constitution as a direct tax; as property, they were, by the
laws of some, if not most, of the States classed as real property,
descendible to heirs. Under the first view, they would be subject
to the tax of 1798, as a capitation tax; under the latter, they
would be subject to the taxation of the other years as realty. That
the latter view was that taken by the framers of the acts, after
1798, becomes highly probable when it is considered that, in the
States where slaves were held, much of the value which would
otherwise have attached to land passed into the slaves. If, indeed,
the land only had been valued without the slaves, the land would
have been subject to much heavier proportional imposition in those
States than in States where there were no slaves, for the
proportion of tax imposed on each State was determined by
population, without reference to the subjects on which it was to be
assessed."

															"The fact, then, that slaves were valued under the acts referred
to, far from showing, as some have supposed, that Congress regarded
personal property as a proper object of direct taxation under the
Constitution, shows only that Congress, after 1798, regarded
slaves, for the purposes of taxation, as realty."

															"It may be rightly affirmed, therefore, that, in the practical
construction of the Constitution by Congress, direct taxes have
been limited to taxes on land and appurtenances and taxes on polls
or capitation taxes."

															"And this construction is entitled to great consideration,
especially in the absence of anything adverse to it in the
discussions of the convention which framed and of the conventions
which ratified the Constitution."

															"This view received the sanction of this court two years before
the enactment of the first law imposing direct taxes eo
nomine. "

															The court then reviews the Hylton case, repudiates the
attack made upon it, reaffirms the construction placed on it by the
legislative, executive, and judicial departments, and expressly
adheres to the ruling in the insurance company case to which I have
referred. Summing up, it said: Page 118 U. S. 634 "It follows necessarily that the power to tax without
apportionment extends to all other objects. Taxes on other objects
are included under the heads of taxes not direct, duties, imposts,
and excises, and must be laid and collected by the rule of
uniformity. The tax under consideration is a tax on bank
circulation, and may very well be classed under the head of duties.
Certainly it is not, in the sense of the Constitution, a direct
tax. It may be said to come within the same category of taxation as
the tax on incomes of insurance companies which this court, at the
last term, in the case of Pacific Insurance Company v.
Soule, held not to be a direct tax."

															This case was, so far as the question of direct taxation is
concerned, decided by an undivided court, for, although Mr. Justice
Nelson dissented from the opinion, it was not on the ground that
the tax was a direct tax, but on another question.

															Some years after this decision, the matter again came here for
adjudication in the case of Scholey v.
Rew , 23 Wall. 331, 90 U. S. 346 .
The issue there involved was the validity of a tax placed by a
United States statute on the right to take real estate by
inheritance. The collection of the tax was resisted on the ground
that it was direct. The brief expressly urged this contention, and
said the tax in question was a tax on land if ever there was one.
It discussed the Hylton case, referred to the language
used by the various judges, and sought to place upon it the
construction which we are now urged to give it, and which has been
so often rejected by this court.

															This court again, by its unanimous judgment, answered all these
contentions. I quote its language:

															"Support to the first objection is attempted to be drawn from
that clause of the Constitution which provides that direct taxes
shall be apportioned among the several States which may be included
within the Union according to their respective numbers, and also
from the clause which provides that no capitation or other direct
tax shall be laid unless in proportion to the census or amended
enumeration; but it is clear that the tax or duty levied by the act
under consideration is not a direct tax within the meaning of
either of those Page 157 U. S. 635 provisions. Instead of that, it is plainly an excise tax or
duty, authorized by section eight of article one, which vests the
power in Congress to lay and collect taxes, duties, imposts, and
excises, to pay the debts, and provide for the common defence and
general welfare."

															"Indirect taxes, such as duties of impost and excises and every
other description of the same, must be uniform, and direct taxes
must be laid in proportion to the census or enumeration as
remodelled in the Fourteenth Amendment. Taxes on lands, houses, and
other permanent real estate have always been deemed to be direct
taxes, and capitation taxes, by the express words of the
Constitution, are within the same category, but it never has been
decided that any other legal exactions for the support of the
Federal government fall within the condition that, unless laid in
proportion to numbers, the assessment is invalid."

															"Whether direct taxes, in the sense of the Constitution,
comprehend any other tax than a capitation tax and a tax on land is
a question not absolutely decided, nor is it necessary to determine
it in the present case, as it is expressly decided that the term
does not include the tax on income, which cannot be distinguished
in principle from a succession tax such as the one involved in the
present controversy."

															What language could more clearly and forcibly reaffirm the
previous rulings of the court upon this subject? What stronger
endorsement could be given to the construction of the Constitution,
which had been given in the Hylton case, and which had
been adopted and adhered to by all branches of the government
almost from the hour of its establishment? It is worthy of note
that the court here treated the decision in the Hylton case as conveying the view that the only direct taxes were "taxes
on land and appurtenance." In so doing, it necessarily again
adopted the suggestion of the justices there made, thus making them
the adjudged conclusions of this court. It is too late now to
destroy the force of the opinions in that case by qualifying them
as mere dicta when they have again and again been expressly
approved by this court.

															If there were left a doubt as to what this established
construction Page 157 U. S. 636 is, it seems to be entirely removed by the case of Springer
v. United States, 102 U. S. 86 , 102 U. S. 602 .
Springer was assessed for an income tax on his professional
earnings and on the interest on United States bonds. He declined to
pay. His real estate was sold in consequence. The suit involved the
validity of the tax as a basis for the sale. Again every question
now presented was urged upon this court. The brief of the plaintiff
in error, Springer, made the most copious references to the
economic writers, Continental and English. It cited the opinions of
the framers of the Constitution. It contained extracts from the
journals of the convention, and marshalled the authorities in
extensive and impressive array. It reiterated the argument against
the validity of an income tax which included rentals. It is also
asserted that the Hylton case was not authority, because
the expressions of the judges in regard to anything except the
carriage tax were mere dicta.

															The court adhered to the ruling announced in the previous cases
and held that the tax was not direct within the meaning of the
Constitution. It reexamined and answered everything advanced here,
and said, in summing up the case:

															"Our conclusions are that direct taxes, within the meaning of
the Constitution, are only capitation taxes, as expressed in that
instrument, and taxes on real estate, and that the tax of which the
plaintiff in error complained is within the category of an excise
or duty."

															The facts, then, are briefly these: at the very birth of the
government, a contention arose as to the meaning of the word
"direct." The controversy was determined by the legislative and
executive departments of the government. Their action came to this
court for review, and it was approved. Every judge of this court
who expressed an opinion made use of language which clearly showed
that he thought the word "direct" in the Constitution applied only
to capitation taxes and taxes directly on land. Thereafter, the
construction thus given was accepted everywhere as definitive. The
matter came again and again to this court, and, in every case, the
original ruling was adhered to. The suggestions made in the Hylton case were adopted here, and, Page 157 U. S. 637 in the last case here decided, reviewing all the others, this
court said that direct taxes within the meaning of the Constitution
were only taxes on land and capitation taxes. And now, after a
hundred years, after long-continued action by other departments of
the government, and after repeated adjudications of this court,
this interpretation is overthrown and the Congress is declared not
to have a power of taxation which may at some time, as it has in
the past, prove necessary to the very existence of the government.
By what process of reasoning is this to be done? By resort to
theories in order to construe the word "direct" in its economic
sense, instead of in accordance with its meaning in the
Constitution, when the very result of the history which I have thus
briefly recounted is to show that the economic construction of the
word was repudiated by the framers themselves, and has been time
and time again rejected by this court; by a resort to the language
of the framers and a review of their opinions, although the facts
plainly show that they themselves settled the question which the
court now virtually unsettles. In view of all that has taken place
and of the many decisions of this court, the matter at issue here
ought to be regarded as closed forever.

															The injustice and harm which must always result from
overthrowing a long and settled practice sanctioned by the
decisions of this court could not be better illustrated than by the
example which this case affords. Under the income tax laws which
prevailed in the past for many years, and which covered every
conceivable source of income, rentals from real estate, and
everything else, vast sums were collected from the people of the
United States. The decision here rendered announces that those sums
were wrongfully taken, and thereby, it seems to me, creates a claim
in equity and good conscience against the government for an
enormous amount of money. Thus, from the change of view by this
court, it happens that an act of Congress, passed for the purpose
of raising revenue in strict conformity with the practice of the
government from the earliest time and in accordance with the
oft-repeated decisions of this court, furnishes the Page 157 U. S. 638 occasion for creating a claim against the government for
hundreds of millions of dollars; I say creating a claim because, if
the government be in good conscience bound to refund that which has
been taken from the citizen in violation of the Constitution,
although the technical right may have disappeared by lapse of time,
or because the decisions of this court have misled the citizen to
his grievous injury, the equity endures, and will present itself to
the conscience of the government. This consequence shows how
necessary it is that the court should not overthrow its past
decisions. A distinguished writer aptly points out the wrong which
must result to society from a shifting judicial interpretation. He
says:

															"If rules and maxims of law were to ebb and flow with the taste
of the judge, or to assume that shape which in his fancy best
becomes the times; if the decisions of one case were not to be
ruled by, or depend at all upon, former determinations in other
cases of a like nature, I should be glad to know what person would
venture to purchase an estate without first having the judgment of
a court of justice respecting the identical title which he means to
purchase? No reliance could be had upon precedents; former
resolutions upon titles of the same kind could afford him no
assurance at all. Nay, even a decision of a court of justice upon
the very identical title would be nothing more than a precarious
temporary security; the principle upon which it was founded might,
in the course of a few years, become antiquated; the same title
might be again drawn into dispute; the taste and fashion of the
times might be improved, and, on that ground, a future judge might
hold himself at liberty (if not consider it his duty) to pay as
little regard to the maxims and decisions of his predecessor as
that predecessor did to the maxims and decisions of those who went
before him."

															Fearne on Contingent Remainders, London ed. 1801, p. 264.

															The disastrous consequences to flow from disregarding settled
decisions thus cogently described must evidently become greatly
magnified in a case like the present, when the opinion of the court
affects fundamental principles of the government by denying an
essential power of taxation Page 157 U. S. 639 long conceded to exist and often exerted by Congress. If it was
necessary that the previous decisions of this court should be
repudiated, the power to amend the Constitution existed, and should
have been availed of. Since the Hylton case was decided,
the Constitution has been repeatedly amended. The construction
which confined the word "direct" to capitation and land taxes was
not changed by these amendments, and it should not now be reversed
by what seems to me to be a judicial amendment of the
Constitution.

															The finding of the court in this case, that the inclusion of
rentals from real estate in an income tax makes it direct to that
extent is, in my judgment, conclusively denied by the authorities
to which I have referred and which establish the validity of an
income tax in itself. Hence, I submit, the decision necessarily
reverses the settled rule which it seemingly adopts in part. Can
there be serious doubt that the question of the validity of an
income tax in which the rentals of real estate are included is
covered by the decisions which say that an income tax is
generically indirect, and that, therefore, it is valid without
apportionment? I mean, of course, could there be any such doubt
were it not for the present opinion of the court? Before
undertaking to answer this question, I deem it necessary to
consider some arguments advanced or suggestions made.

															1st. The opinions of Turgot and Smith and other economists are
cited, and it is said their views were known to the framers of the
Constitution, and we are then referred to the opinions of the
framers themselves. The object of the collocation of these two
sources of authority is to show that there was a concurrence
between them as to the meaning of the word "direct." But in order
to reach this conclusion, we are compelled to overlook the fact
that this court has always held, as appears from the preceding
cases, that the opinions of the economists threw little or no light
on the interpretation of the word "direct" as found in the
Constitution. And the whole effect of the decisions of this court
is to establish the proposition that the word has a different
significance in the Constitution from that which Smith and Turgot
have given to it when used in a general economic sense. Indeed, it
seems to me Page 157 U. S. 640 that the conclusion deduced from this line of thought itself
demonstrates its own unsoundness. What is that conclusion? That the
framers well understood the meaning of "direct."

															Now it seems evident that the framers, who well understood the
meaning of this word, have themselves declared in the most positive
way that it shall not be here construed in the sense of Smith and
Turgot. The Congress which passed the carriage tax act was composed
largely of men who had participated in framing the Constitution.
That act was approved by Washington, who had presided over the
deliberations of the convention. Certainly Washington himself, and
the majority of the framers, if they well understood the sense in
which the word "direct" was used, would hare declined to adopt and
approve a taxing act which clearly violated the provisions of the
Constitution if the w ord "direct," as therein used, had the
meaning which must be attached to it if read by the light of the
theories of Turgot and Adam Smith. As has already been noted, all
the judges who expressed opinions in the Hylton case
suggested that "direct," in the constitutional sense, referred only
to taxes on land and capitation taxes. Could they have possibly
made this suggestion if the word had been used as Smith and Turgot
used it? It is immaterial whether the suggestions of the judges
were dicta or not. They could not certainly have made this
intimation, if they understood the meaning of the word "direct" as
being that which it must have imported if construed according to
the writers mentioned. Take the language of Mr. Justice
Paterson:

															"I never entertained a doubt that the principal, I will not say
the only, objects that the framers of the Constitution contemplated
a falling within the rule of apportionment were a capitation tax
and a tax on land."

															He had borne a conspicuous part in the convention. Can we say
that he understood the meaning of the framers, and yet, after the
lapse of a hundred years, fritter away that language, uttered by
him from this bench in the first great case in which this court was
called upon to interpret the meaning of the word "direct?" It
cannot be said that his language was used carelessly or without a
knowledge of its great import. The debate upon the passage Page 157 U. S. 641 of the carriage tax act had manifested divergence of opinion as
to the meaning of the word "direct." The magnitude of the issue is
shown by all contemporaneous authority to have been deeply felt,
and its far-reaching consequence was appreciated. Those
controversies came here for settlement and were then determined
with a full knowledge of the importance of the issues. They should
not be now reopened.

															The argument, then, it seems to me, reduces itself to this: that
the framers well knew the meaning of the word "direct;" that so
well understanding it, they practically interpreted it in such a
way as to plainly indicate that it had a sense contrary to that now
given to it in the view adopted by the court. Although they thus
comprehended the meaning of the word and interpreted it at an early
day, their interpretation is now to be overthrown by resorting to
the economists whose construction was repudiated by them. It is
thus demonstrable that the conclusion deduced from the premise that
the framers well understood the meaning of the word "direct,"
involves a fallacy. In other words, that it draws a faulty
conclusion, even if the predicate upon which the conclusion is
rested be fully admitted. But I do not admit the premise. The views
of the framers cited in the argument conclusively show that they
did not well understand, but were in great doubt as to, the meaning
of the word "direct." The use of the word was the result of a
compromise. It was accepted as the solution of a difficulty which
threatened to frustrate the hopes of those who looked upon the
formation of a new government as absolutely necessary to escape the
condition of weakness which the Articles of Confederation had
shown. Those who accepted the compromise viewed the word in
different lights, and expected different results to flow from its
adoption. This was the natural result of the struggle which was
terminated by the adoption of the provision as to representation
and direct taxes. That warfare of opinion had been engendered by
the existence of slavery in some of the States, and was the
consequence of the conflict of interest thus brought about. In
reaching a settlement, the minds of those who acted on it were
naturally concerned in the main with the cause of the Page 157 U. S. 642 contention, and not with the other things which had been
previously settled by the convention. Thus, whilst there was in all
probability clearness of vision as to the meaning of the word
"direct" in relation to its bearing on slave property, there was
inattention in regard to other things, and there were, therefore,
diverse opinions as to its proper signification. That such was the
case in regard to many other clauses of the Constitution has been
shown to be the case by those great controversies of the past which
have been peacefully settled by the adjudications of this court.
Whilst this difference undoubtedly existed, as to the effect to be
given the word "direct," the consensus of the majority of the
framers as to its meaning was shown by the passage of the carriage
tax act. That consensus found adequate expression in the opinions
of the justices in the Hylton case, and in the decree of
this court there rendered. The passage of that act, those opinions,
and that decree, settled the proposition that the word applied only
to capitation taxes and taxes on land.

															Nor does the fact that there was difference in the minds of the
framers as to the meaning of the word "direct" weaken the binding
force of the interpretation placed upon that word from the
beginning. For, if such difference existed, it is certainly sound
to hold that a contemporaneous solution of a doubtful question,
which has been often confirmed by this court, should not now be
reversed. The framers of the Constitution, the members of the
earliest Congress, the illustrious man first called to the office
of Chief Executive, the jurists who first sat in this court, two of
whom had borne a great part in the labors of the convention, all of
whom dealt with this doubtful question, surely occupied a higher
vantage ground for its correct solution than do those of our day.
Here, then, is the dilemma: if the framers understood the meaning
of the word "direct" in the Constitution, the practical effect
which they gave to it should remain undisturbed; if they were in
doubt as to the meaning, the interpretation long since
authoritatively affixed to it should be upheld.

															2d. Nor do I think any light is thrown upon the question of
whether the tax here under consideration is direct or indirect Page 157 U. S. 643 by referring to the principle of "taxation without
representation" and the great struggle of our forefathers for its
enforcement. It cannot be said that the Congress which passed this
act was not the representative body fixed by the Constitution. Nor
can it be contended that the struggle for the enforcement of the
principle involved the contention that representation should be in
exact proportion to the wealth taxed. If the argument be used in
order to draw the inference that, because in this instance, the
indirect tax imposed will operate differently through various
sections of the country, therefore that tax should be treated as
direct, it seems to me it is unsound. The right to tax, and not the
effects which may follow from its lawful exercise, is the only
judicial question which this court is called upon to consider. If
an indirect tax, which the Constitution has not subjected to the
rule of apportionment, is to be held to be a direct tax because it
will bear upon aggregations of property in different sections of
the country, according to the extent of such aggregations, then the
power is denied to Congress to do that which the Constitution
authorizes, because the exercise of a lawful power is supposed to
work out a result which, in the opinion of the court, was not
contemplated by the fathers. If this be sound, then every question
which has been determined in our past history is now still open for
judicial reconstruction. The justness of tariff legislation has
turned upon the assertion, on the one hand, denied on the other,
that it operated unequally on the inhabitants of different sections
of the country. Those who opposed such legislation have always
contended that its necessary effect was not only to put the whole
burden upon one section, but also to directly enrich certain of our
citizens at the expense of the rest, and thus build up great
fortunes to the benefit of the few and the detriment of the many.
Whether this economic contention be true or untrue is not the
question. Of course, I intimate no view on the subject. Will it be
said that, if tomorrow the personnel of this court should be
changed, it could deny the power to enact tariff legislation which
has been admitted to exist in Congress from the beginning, upon the
ground that such legislation beneficially affects one section or
set of people Page 157 U. S. 644 to the detriment of others within the spirit of the
Constitution, and therefore constitutes a direct tax?

															3d. Nor, in my judgment, does any force result from the argument
that the framers expected direct taxes to be rarely resorted to,
and, as the present tax was imposed without public necessity, it
should be declared void.

															It seems to me that this statement begs the whole question, for
it assumes that the act now before us levies a direct tax, whereas
the question whether the tax is direct or not is the very issue
involved in this case. If Congress now deems it advisable to resort
to certain forms of indirect taxation which have been frequently,
though not continuously, availed of in the past, I cannot see that
its so doing affords any reason for converting an indirect into a
direct tax in order to nullify the legislative will. The policy of
any particular method of taxation, or the presence of an exigency
which requires its adoption, is a purely legislative question. It
seems to me that it violates the elementary distinction between the
two departments of the government to allow an opinion of this court
upon the necessity or expediency of a tax to affect or control our
determination of the existence of the power to impose it.

															But I pass from these considerations to approach the question
whether the inclusion of rentals from real estate in an income tax
renders such a tax to that extent "direct" under the Constitution,
because it constitutes the imposition of a direct tax on the land
itself. Does the inclusion of the rentals from real estate in the
sum going to make up the aggregate income from which (in order to
arrive at taxable income) is to be deducted insurance, repairs,
losses in business, and four thousand dollars exemption, make the
tax on income so ascertained a direct tax on such real
estate? In answering this question, we must necessarily accept the
interpretation of the word "direct" authoritatively given by the
history of the government and the decisions of this court just
cited. To adopt that interpretation for the general purposes of an
income tax, and then repudiate it because of one of the elements of
which it is composed, would violate every Page 157 U. S. 645 elementary rule of construction. So also, to seemingly accept
that interpretation and then resort to the framers and the
economists in order to limit its application and give it a
different significance is equivalent to its destruction, and
amounts to repudiating it without directly doing so. Under the
settled interpretation of the word, we ascertain whether a tax be
direct or not by considering whether it is a tax on land or a
capitation tax. And the tax on land, to be within the provision for
apportionment, must be direct. Therefore we have two things to take
into account: is it a tax on land, and is it direct thereon or so
immediately on the land as to be equivalent to a direct levy upon
it? To say that any burden on land, even though indirect, must be
apportioned is not only to incorporate a new provision in the
Constitution, but is also to obliterate all the decisions to which
I have referred by construing them as holding that, although the
Constitution forbids only a direct tax on land without
apportionment, it must be so interpreted as to bring an indirect
tax on land within its inhibition.

															It is said that a tax on the rentals is a tax on the land, as if
the act here under consideration imposed an immediate tax on the
rentals. This statement, I submit, is a misconception of the issue.
The point involved is whether a tax on net income, when such income
is made up by aggregating all sources of revenue and deducting
repairs, insurance, losses in business, exemptions, etc., becomes,
to the extent to which real estate revenues may have entered into
the gross income, a direct tax on the land itself. In other words,
does that which reaches an income, and thereby reaches rentals
indirectly, and reaches the land by a double indirection, amount to
direct levy on the land itself? It seems to me the question, when
thus accurately stated, furnishes its own negative response.
Indeed, I do not see how the issue can be stated precisely and
logically without making it apparent on its face that the inclusion
of rental from real property in income is nothing more than an
indirect tax upon the land.

															It must be borne in mind that we are dealing not with the want
of power in Congress to assess real estate at all; on Page 157 U. S. 646 the contrary, as I have shown at the outset, Congress has
plenary power to reach real estate both directly and indirectly. If
it taxes real estate directly, the Constitution commands that such
direct imposition shall be apportioned. But because an excise or
other indirect tax, imposed without apportionment, has an indirect
effect upon real estate, no violation of the Constitution is
committed, because the Constitution has left Congress untrammeled
by any rule of apportionment as to indirect taxes -- imposts,
duties, and excises. The opinions in the Hylton case, so
often approved and reiterated, the unanimous views of the text
writers, all show that a tax on land, to be direct, must be an
assessment of the land itself, either by quantity or valuation.
Here there is no such assessment. It is well also to bear in mind,
in considering whether the tax is direct on the land, the fact
that, if land yields no rental, it contributes nothing to the
income. If it is vacant, the law does not force the owner to add
the rental value to his taxable income. And so it is if he occupies
it himself.

															The citation made by counsel from Coke on Littleton, upon which
so much stress is laid, seems to me to have no relevancy. The fact
that, where one delivers or agrees to give or transfer land with
all the fruits and revenues, it will be presumed to be a conveyance
of the land in no way supports the proposition that an indirect tax on the rental of land is a direct burden on the land itself.

															Nor can I see the application of Brown v.
Maryland , 1 Wheat. 419; Weston v.
Charleston , 2 Pet. 449; Dobbins v.
Erie County Commissioners , 16 Pet. 435; Almy v.
California , 24 How. 169; Cook v.
Pennsylvania, 97 U. S. 566 ; Railroad Co. v.
Jackson , 7 Wall. 262; Philadelphia &c.
Steamship Co. v. Pennsylvania, 122 U.
S. 326 ; Leloup v. Mobile, 127 U.
S. 640 ; Postal Telegraph Co. v. Adams, 155 U. S. 688 . All
these cases involve the question whether, under the Constitution,
if no power existed to tax at all, either directly or indirectly,
an indirect tax would be unconstitutional. These cases would be
apposite to this if Congress had no power to tax real estate. Were
such the case, it might be that the imposition of an excise by
Congress which reached real estate indirectly would Page 157 U. S. 647 necessarily violate the Constitution, because as it had no power
in the premises, every attempt to tax directly or indirectly would
be null. Here, on the contrary, it is not denied that the power to
tax exists in Congress, but the question is, is the tax direct or
indirect in the constitutional sense?

															But it is unnecessary to follow the argument further, for, if I
understand the opinions of this court already referred to, they
absolutely settle the proposition that an inclusion of the rentals
of real estate in an income tax does not violate the Constitution.
At the risk of repetition, I propose to go over he cases again for
the purpose of demonstrating this. In doing so, let it be
understood at the outset that I do not question the authority of Cohens v. Virginia or Carroll v. Lessee of
Carroll, or any other of the cases referred to in argument of
counsel. These great opinions hold that an adjudication need not be
extended beyond the principles which it decides. Whilst conceding
this, it is submitted that, if decided cases do directly,
affirmatively, and necessarily, in principle, adjudicate the very
question here involved, then, under the very text of the opinions
referred to by the court, they should conclude this question. In
the first case, that of Hylton, is there any possibility
by the subtlest ingenuity to reconcile the decision here announced
with what was there established?

															In the second case, Insurance Company v. Soule, the
levy was upon the company, its premiums, its dividends, and net
gains from all sources. The case was certified to this court, and
the statement made by the judges in explanation of the question
which they propounded says: "The amount of said premiums,
dividends, and net gains were truly stated in said lists or
returns." Original Record, p. 27.

															It will thus be seen that the issue there presented was not
whether an income tax on business gains was valid, but whether an
income tax on gains from business and all other net gains was
constitutional. Under this state of facts, the question put to the
court was:

															"Whether the taxes paid by the plaintiff, and sought to be
recovered back in this action, are not direct taxes within the
meaning of the Constitution of the United States. " Page 157 U. S. 648 This tax covered revenue of every possible nature, and it
therefore appears self-evident that the court could not have upheld
the statute without deciding that the income derived from realty,
as well as that derived from every other source, might be taxed
without apportionment. It is obvious that, if the court had
considered that any particular subject matter which the statute
reached was not constitutionally included, it would have been
obliged by every rule of safe judicial conduct to qualify its
answer as to this particular subject.

															It is impossible for me to conceive that the court did not
embrace in its ruling the constitutionality of an income tax which
included rentals from real estate, since, without passing upon that
question, it could not have decided the issue presented. And
another reason why it is logically impossible that this question of
the validity of the inclusion of the rental of real estate in an
income tax could have been overlooked by the court is found in the
fact to which I could have already adverted, that this was one of
the principal points urged upon its attention, and the argument
covered all the ground which has been occupied here -- indeed, the
very citation from Coke upon Littleton now urged as conclusive was
there made also in the brief of counsel. And although the return of
income involved in that case was made "in block," the very fact
that the burden of the argument was that to include rentals from
real estate in income subject to taxation made such tax pro
tanto direct seems to me to indicate that such rentals had
entered into the return made by the corporation.

															Again, in the case of Scholey v. Rew, the tax in
question was laid directly on the right to take real estate by
inheritance, a right which the United States had no power to
control. The case could not have been decided, in any point of
view, without holding a tax upon that right was not direct, and
that, therefore, it could be levied without apportionment. It is
manifest that the court could not have overlooked the question
whether this was a direct tax on the land or not, because, in the
argument of counsel, it was said, if there was any tax in the world
that was a tax on real estate which was Page 157 U. S. 649 direct, that was the one. The court said it was not, and
sustained the law. I repeat that the tax there was put directly
upon the right to inherit, which Congress had no power to regulate
or control. The case was therefore greatly stronger than that here
presented, for Congress has a right to tax real estate directly
with apportionment. That decision cannot be explained away by
saying that the court overlooked the fact that Congress had no
power to tax the devolution of real estate, and treated it as a tax
on such devolution. Will it be said of the distinguished men who
then adorned this bench that, although the argument was pressed
upon them that this tax was levied directly on the real estate,
they ignored the elementary principle that the control of the
inheritance of realty is a state, and not a Federal, function? But
even if the case proceeded upon the theory that the tax was on the
devolution of the real estate, and was therefore not direct, is it
not absolutely decisive of this controversy? If to put a burden of
taxation on the right to take real estate by inheritance reaches
realty only by indirection, how can it be said that a tax on the
income, the result of all sources of revenue, including rentals,
after deducting losses and expenses, which thus reaches the rentals
indirectly, and the real estate indirectly through the rentals, is
a direct tax on the real estate itself?

															So it is manifest in the Springer case that the same
question was necessarily decided. It seems obvious that the court
intended in that case to decide the whole question, including the
right to tax rental from real estate without apportionment. It was
elaborately and carefully argued there that, as the law included
the rentals of land in the income taxed, and such inclusion was
unconstitutional, this, therefore, destroyed that part of the law
which imposed the tax on the revenues of personal property. Will it
be said, in view of the fact that, in this very case, four of the
judges of this court think that the inclusion of the rentals from
real estate in an income tax renders the whole law invalid, that
the question of the inclusion of rentals was of no moment there,
because the return there did not contain a mention of such rentals?
Were Page 157 U. S. 650 the great judges who then composed this court so neglectful that
they did not see the importance of a question which is now
considered by some of its members so vital that the result in their
opinion is to annul the whole law, more especially when that
question was pressed upon the court in argument with all possible
vigor and earnestness? But I think that the opinion in the Springer case clearly shows that the court did consider
this question of importance, that it did intend to pass upon it,
and that it deemed that it had decided all the questions affecting
the validity of an income tax in passing upon the main issue, which
included the others as the greater includes the less.

															I can discover no principle upon which these cases can be
considered as any less conclusive of the right to include rentals
of land in the concrete result, income, than they are as to the
right to levy a general income tax. Certainly the decisions which
hold that an income tax, as such, is not direct decide on principle
that to include the rentals of real estate in an income tax does
not make it direct. If embracing rentals in income makes a tax on
income to that extent a direct tax on the land, then the same word
in the same sentence of the Constitution has two wholly distinct
constitutional meanings, and signifies one thing when applied to an
income tax generally and a different thing when applied to the
portion of such a tax made up in part of rentals. That is to say,
the word means one thing when applied to the greater and another
when applied to the lesser tax.

															My inability to agree with the court in the conclusions which it
has just expressed causes me much regret. Great as is my respect
for any view by it announced, I cannot resist the conviction that
its opinion and decree in this case virtually annuls its previous
decisions in regard to the powers of Congress on the subject of
taxation, and is therefore fraught with danger to the court, to
each and every citizen, and to the republic. The conservation and
orderly development of our institutions rests on our acceptance of
the results of the past and their use as lights to guide our steps
in the future. Teach the lesson that settled principles may be
overthrown Page 157 U. S. 651 at any time, and confusion and turmoil must ultimately result.
In the discharge of its function of interpreting the Constitution,
this court exercises an august power. It sits removed from the
contentions of political parties and the animosities of factions.
It seems to me that the accomplishment of its lofty mission can
only be secured by the stability of its teachings and the sanctity
which surrounds them. If the permanency of its conclusions is to
depend upon the personal opinions of those who, from time to time,
may make up its membership, it will inevitably become a theatre of
political strife, and its action will be without coherence or
consistency. There is no great principle of our constitutional law,
such as the nature and extent of the commerce power, or the
currency power, or other powers of the Federal government, which
has not been ultimately defined by the adjudications of this court
after long and earnest struggle. If we are to go back to the
original sources of our political system, or are to appeal to the
writings of the economists in order to unsettle all these great
principles, everything is lost and nothing saved to the people. The
rights of every individual are guaranteed by the safeguards which
have been thrown around them by our adjudications. If these are to
be assailed and overthrown, as is the settled law of income
taxation by this opinion, as I understand it, the rights of
property, so far as the Federal Constitution is concerned, are of
little worth. My strong convictions forbid that I take part in a
conclusion which seems to me so full of peril to the country. I am
unwilling to do so without reference to the question of what my
personal opinion upon the subject might be if the question were a
new one, and was thus unaffected by the action of the framers, the
history of the government, and the long line of decisions by this
court. The wisdom of our forefathers in adopting a written
Constitution has often been impeached upon the theory that the
interpretation of a written instrument did not afford as complete
protection to liberty as would be enjoyed under a Constitution made
up of the traditions of a free people. Writing, it has been said,
does not insure greater stability than tradition does, while it Page 157 U. S. 652 destroys flexibility. The answer has always been that, by the
foresight of the fathers, the construction of our written
Constitution was ultimately confided to this body, which, from the
nature of its judicial structure, could always be relied upon to
act with perfect freedom from the influence of faction and to
preserve the benefits of consistent interpretation. The fundamental
conception of a judicial body is that of one hedged about by
precedents which are binding on the court without regard to the
personality of its members. Break down this belief in judicial
continuity, and let it be felt that, on great constitutional
questions, this court is to depart from the settled conclusions of
its predecessors and to determine them all according to the mere
opinion of those who temporarily fill its bench, and our
Constitution will, in my judgment, be bereft of value, and become a
most dangerous instrument to the rights and liberties of the
people.

															In regard to the right to include in an income tax the interest
upon the bonds of municipal corporations, I think the decisions of
this court holding that the Federal government is without power to
tax the agencies of the state government embrace such bonds, and
that this settled line of authority is conclusive upon my judgment
here. It determines the question that, where there is no power to
tax for any purpose whatever, no direct or indirect tax can be
imposed. The authorities cited in the opinion are decisive of this
question. They are relevant to one case and not to the other
because, in the one case, there is full power in the Federal
government to tax, the only controversy being whether the tax
imposed is direct or indirect, while, in the other, there is no
power whatever in the Federal government, and therefore the levy,
whether direct or indirect, is beyond the taxing power.

															Mr. Justice Harlan authorizes me to say that he concurs in the
views herein expressed.

															MR. JUSTICE HARLAN, further dissenting.

															I concur so entirely in the general views expressed by Mr.
Justice White in reference to the questions disposed of by the Page 157 U. S. 653 opinion and judgment of the majority that I will do no more than
indicate, without argument, the conclusions reached by me after
much consideration. Those conclusions are:

															1. Giving due effect to the statutory provision that "no suit
for the purpose of restraining the assessment or collection of any
tax shall be maintained in any court," Rev.Stat. § 324, the decree
below dismissing the bill should be affirmed. As the Farmers' Loan
and Trust Company could not itself maintain a suit to restrain
either the assessment or collection of the tax imposed by the act
of Congress, the maintenance of a suit by a stockholder to restrain
that corporation and its directors from voluntarily paying such tax
would tend to defeat the manifest object of the statute, and be an
evasion of its provisions. Congress intended to forbid the issuing
of any process that would interfere in anywise with the prompt
collection of the taxes imposed. The present suits are mere devices
to strike down a general revenue law by decrees, to which neither
the government nor any officer of the United States could be
rightfully made parties of record.

															2. Upon principle and under the doctrines announced by this
court in numerous cases, a duty upon the gains, profits, and income
derived from the rents of land is not a "direct" tax on such land
within the meaning of the constitutional provisions requiring
capitation or other direct taxes to be apportioned among the
several States according to their respective numbers determined in
the mode prescribed by that instrument. Such a duty may be imposed
by Congress without apportioning the same among the States
according to population.

															3. While property, and the gains, profits, and income derived
from property, belonging to private corporations and individuals
are subjects of taxation for the purpose of paying the debts and
providing for the common defence and the general welfare of the
United States, the instrumentalities employed by the States in
execution of their powers are not subjects of taxation by the
general government any more than the instrumentalities of the
United States are the subjects of taxation by the States, and any
tax imposed directly upon interest derived from bonds issued by a
municipal corporation Page 157 U. S. 654 for public purposes, under the authority of the State whose
instrumentality it is, is a burden upon the exercise of the powers
of that corporation which only the State creating it may impose. In
such a case it is immaterial to inquire whether the tax is, in its
nature or by its operation, a direct or an indirect tax, for the
instrumentalities of the States -- among which, as is well settled,
are municipal corporations, exercising powers and holding property
for the benefit of the public -- are not subjects of national
taxation, in any form or for any purpose, while the property of
private corporations and of individuals is subject to taxation by
the general government for national purposes. So it has been
frequently adjudged, and the question is no longer an open one in
this court.

															Upon the several questions about which the members of this court
are equally divided in opinion, I deem it appropriate to withhold
any expression of my views, because the opinion of the Chief
Justice is silent in regard to those questions.

Summary: In the case of Pollock v. Farmers' Loan & Trust Co. (1895), the US Supreme Court ruled that taxes on income derived from land and municipal bonds are considered direct taxes and must be apportioned among the states based on population. The Court found that a tax on rents or income from real estate is a direct tax and that a tax on interest from municipal bonds is an unconstitutional burden on state power. This decision had significant implications for federal taxation and revenue laws.