you to decide that it is within its constitutional competence to declare that all citizens of the United States who own property above the amount of $80,000 shall pay all the taxes. I do not say they have said that, for this is only a part of the indirect taxing system. But if this be valid, I say it is within their competence; and they ask you to decide that it is within the competence of Congress to declare that only those citizens whose property exceeds $80,000 shall bear any part of the burdens of this government, and that is to be declared by the ninety-five per cent of all the voting population of the United States in their respective states in electing members of Congress, who, with their constituents, by the same Act of Congress, are to pay nothing at all. direct tax is a tax upon every kind of property and upon every kind of person in respect of himself, or in respect of his property, either in existence or acquired, or to he acquired, and not in respect to his voluntary calling, pursuits, or acts, as importing goods which he may import or not import as he pleases, not in respect of his being a trader or manufacturer, etc.. in all of which cases he is taxed as a consequence of his free choice of business and in all of which the burden is to some degree moved on-but in respect of things that belong to the existence of property as an entity-a state of physical being. Duties, imposts, and excises are, in large degree, and almost universally, heavy or light upon each person, depending upon his own And this we call free government, a govern will. If we say, as some writers do, that indiment of equal protection of the laws; we call rect taxes are those upon consumption which it constitutional government. Three fourths, are not taxes which bear unequally upon the nine tenths of the people of this government, so-called poor and the so-called rich, because paying nothing toward carrying it on, shall be we all know-it is an every day experienceat liberty, under a Constitution which has that there are people in this very town and been supposed always to be framed to protect probably in this very room-I know there are the rights of minorities, to impose all the-who live respectably and comfortably upon taxes of government upon those who own half that it costs some who are neighbors. property amounting to more than $80,000, Justice SHIRAS:-Have you any definition of and nothing on those who own less. The the word "excise?" philosophical considerations, the political considerations-not those of party, but the philosophical considerations of men who love liberty and wish it to be perpetuated, are all arrayed against such a scheme of government. What will become of a country, and how long will it last, where taxation and all its burdens and expenses are imposed by those who pay nothing, upon a very small minority of their fellow citizens? This would be followed by further invasions of private and property rights, as one vice follows another, and very soon we should have, possibly, only one per cent of the people payIng the taxes, and finally a provision that only the twenty people who have the greatest estates should bear the whole taxation, and after that communism, anarchy, and then, the ever following despotism. But it may be said that as to the quantum the citizen is to pay, that is a matter that the Constitution of the United States and of the Beveral states cannot deal with; that this falls within the judgment of the legislative department of the government and that the judicial power has nothing to do with it. If this is so, the sooner we find it out the better. If not so, the sooner, for the peace and welfare of these United States, it is adjudged by this tribunal of last resort, the sooner legislative bodies will recognize the fact that they also are bound by the fundamental law. Justice HARLAN:-Have you formulated in your own mind any general rule by which we are to determine whether a tax is direct or indirect? Mr. EDMUNDS:-Yes, sir; and I will read one which I think your honors will not consider impertinent, for I take it out of old Samuel Johnson, with whom you are all acquainted, and then I will read another. This is Samuel Johnson's definition: "A hateful tax levied upon commodities, and adjudged, not by the common judges of property, but wretches, hired by those to whom this excise is paid." Justice HARLAN:-That is evidently your definition of an income tax. Mr. EDMUNDS:-Oh, no. Income is not a commodity. It does define it in some of its administrative characteristics. But to be serious, if your honors will excuse me for that, I will read you the definition from an edition of Jacob's law dictionary which was printed as near the time of the adoption of the Constitution as I could get it from the library; and I have no doubt the word had precisely this definition at the time of the adoption of the Constitution. This edition was printed in 1808: "An inland imposition paid sometimes on the consumption of the commodity, or, frequently, upon the retail sale, which is the last stage before consumption." The following is taken from Johnson's dictionary, as it was customary in that time to thus illustrate the meaning of a word: "The people should pay a ratable tax for their sheep, and an excise for everything they should eat.' " When the word "duty" is used in a class in these definitions, you find there the words merchandise and goods in connection with it, Mr. EDMUNDS:-I have. I am perfectly always bringing in the idea, the ruling idea, ready to state it. But like most general rules, that indirect taxes are levied upon consump it requires exceptions, as all judicial courts tion as it is called, always takes the thing in know and all people acquainted with affairs movement-transactions among men, in reknow. It is almost impossible to state a gen-spect to which they are the masters of their eral rule which will not have its exceptions, and its qualifications, and its variations. But my definition is-and I believe it to be generally found to be universally true-that a own conduct, and, therefore, are not regulated as to how much tax they all pay, according to the kind of business they choose to carry on, and the amount and value, etc., of the commodities they choose to consume. | While in the case of a direct tax, such as an income tax, and on land and property, as it is in the state I live in, the will of the man or taxpayer has nothing to do with it. I think the distinction is clear and obvious. It existed then and it exists still. Justice BROWN:-Is not the distinction somewhat like this: That direct taxes are paid by the taxpayer both immediately and ultimately; while indirect taxes are paid immediately by the taxpayer and ultimately by somebody else? Mr. EDMUNDS:-Yes, sir; that is a much clearer definition than I have given, though I think the whole burden rarely falls on the last man. It is, I think, borne partly by each agent in the movement. The income of a man is inseparable from him. It is as inseparable from a man as his character is, or his name. It is there. It is personal. It begins and ends with him. It was for that reason that I read the definitions in existence at the time this Constitution was made-as a capitation tax included an income tax. " I come now to the point of uniformity. The dictionary meaning of "uniform is: "Having always the same form, manner, or degree; not varying, or variable; unchanging; consistent; equable; homogeneous. vised it was stricken out, not by the committee that was reforming it, but by the committee on style, as tautology. Thus making of this instrument, as I said before, as perfect a model of symmetrical and concrete English as was ever printed in the world. So I maintain that it is not merely or chiefly a geographical word, but also a word qualifying duties, imposts, exercises, thus made equable and homogeneous in respect to the things and the persons to which they applied, and that the equality shall be everywhere. Justice WHITE:-If your rule applies here, how do you meet the statement made by you a while ago in discussing the question of the exemption of a certain amount of furniture, which was universally not taxed. MR. EDMUNDS:-I meet it upon the principle and practice that existed when the Constitution was formed, and that has existed in every government since, that the lawmaking power does not tax things that are of so small value that the cost of collection of the tax is more than the amount of the tax; and in dealing affirmatively by the implied consent prevailing iu every constitution among civilized men, the principle and practice of leaving to the whole body of the citizens those small personal effects, etc., like furniture, family bibles, etc., I have to submit that the phrase in the Con- free from taxation. And it is upon that prinstitution, "duties, imposts, and excises shall ciple and practice that charities and churches be uniform throughout the United States," is and schools and libraries and public buildings not a merely geographical phrase. I take it have been exempted; and also for these latter that my learned friends on the other side will things that they are things devoted to the pubagree that the word "uniform" is not a geo-lic use in one way and another, and therefore graphical word taken alone. And what the Constitution meant, after it had provided that direct taxes should be apportioned according to population, and so on, by the requirement that duties, excises, and imposts should be uniform throughout the United States, was that they must be assessed and collected upon the principles of fundamental justice and of equality that are implied in the very name of taxes in a constitutional government of free men. And I submit that it would not, in a direct tax case, have been within the competence of Congress, having imposed a direct tax upon lands and apportioned it among the states according to population, to say that in any one state or all states the owners of two hundred acres of land should pay all the tax, and all the owners of less than two hundred acres should pay none, although the Constitution said nothing about it. And so in regard to uniformity under the other class-duties, imposts, and excises. When it speaks of uniformity throughout the United States it means, I submit, literally and grammatically, not merely that it shall be everywhere the same, but, first, that it shall be uniform per se, and after being uniform per se, that the uniformity shall be universal as to places. Justice HARLAN:-You think the word "uniform" necessarily implies equality? Mr. EDMUNDS:-I do. The dictionary says 80. One of its definitions is equable. Justice WHITE:-Then the use of both the words "equal" and "uniform" was mere tautology? MR. EDMUNDS:-Yes. The word "equal" was in the original draft, and when being re taxing them is merely taxing the public for itself, and, consequently, of no advantage. It seems so to me. Justice WHITE:--How do you meet the argument advanced by the other side in regard to the construction of the specific duties levied in all the tariffs during the last thirty years? For instance, take the imposition of two cents per pound on cotton without reference to the value of the cotton. That would strike at the root of legislation which has existed since the foundation of the government. Is not that a necessary consequence of that construction? MR. EDMUNDS:-I think not, sir. Justice WHITE:-I would like to see why. MR. EDMUNDS:-The introduction of commodities from foreign countries in the United States is one that depends upon the free will of the importer. There is no statute of the United States that commands any citizen of Louisiana, of Vermont, of Iowa, or of Texas, or of California to do anything of the kind. Congress having the power to exclude altogether or to admit imports, has the power to say that they shall be admitted upon any qualification it likes. It may say you may bring them into the country upon terms prescribed or not, as you please. It is the granting of a privilege. You may exclude or admit them, just the same as a state grants or refuses corporate rights. There is another thing it seems to me, and that is that in nearly all cases where specific duties have been assessed, and probably in all cases, those specific duties are based on the value of the article. Then again, the language of this Constitution as applied to one set of subjects may have one meaning, and when applied to another | lowing large latitude as to where we draw the set the meaning varies, as we all know it may, lines, still the taxes must be laid as nearly and it has been decided by this court it may equal as fair human exertion can make them. sometimes. Again, if all of a whole body of And when you find a case where Congress or men or things are embraced in a tax or other a state legislature has undertaken deliberately burden the imposition would be uniform, to make a discrimination which throws all the without regard to any particular difference burden upon a very small minority of the peoin the circumstantial characteristics or quali- ple, and on purpose to do it, and not from any ties of the men or things. A tax on polls does necessity of the situation, and a tax which renot distinguish between tall and short men, or lieves the vast majority, which is just as able their wealth or health. A tax on all horses, to bear it as the minority, you must decide per head, would be uniform. A tax on all that the Congress has gone beyond the boundcotton at so much per pound would be uniform. ary of its powers, and that the judicial power But in every such case the tax would be direct. which Hamilton so prophetically said emSome allusion has been made to the Edye v. braced the majesty and the justice of the gov. Robertson (Head Money Cases") 112 U. S. 580 ernment, is bound to see it and to hold the (28: 798). I will only say a word about this. calm and regnant shield of the Constitution The taxes, so called, could not be geogra- between the citizen and despotism. phically uniform, because it is perfectly clear that in a state like Montana, and many others which are not on the water, where no ship could possibly get in, such a tax could not apply. But they could be and were intrinsically uniform as to men and things. Congress had passed a law that people coming by a vessel should pay a tax; but suppose Congress had said that in the port of New York the people coming by line A, the Cunard Line, we will call it, should pay ten dollars; and the people coming by the International Line (the Paris and New York) into the same port, should pay fifteen dollars a head. What do you think would have been the decision in that case? Would my learned brother Carter say that was uniform? I take it not. You would say that Congress had no power to do anything of the kind. I shall ask your honor's attention for only a few moments more with respect to the general aspects of this case. I insist that the inherent quality of taxation in a government professed to be founded on democratic principles (as in England it exists on an unwritten con-titution -for the government of England is founded on democratic principles-it is in some respects more democratic than ours-administrations come and go by the mere will of one branch of that government), with written constitu tions, with equal rights, equal responsibilities, equal duties, is that the name and idea of taxation is the imposition of burdens upon its people for their common benefit which burdens, in order to be just, must be equal as far as human exertion can make it so. It must not be, as it is in this case, intentionally and tyrannically and monstrously unequal. It it were a state tax in the state of Vermont which provided that all persons owning property worth more than $80,000 should pay all the taxes of the state, and those having less shall pay none, propably not exceeding one hundred persons in that rural and modest state to which I belong-certainly less than two hundred-would bear the whole expenses of the state. So I maintain that it is a fundamental prin cipal, written or unwritten, that the burdens of taxation should bear equally. But the 5th and 14th Amendments of the Constitution certainly would relieve us of all difficulty, if any exists, in the fundamental principles I have stated. Take the 14th Amendment. In terms it does not say that Congress shall not deny to all the people the equal protection of the laws. Suppose it had said that Congress may deny, although the state may not, to all the people the equal protection of the laws? Everybody would have said that it was a monstrous proposition, and if this court had the power of the highest courts in Great Britain, you would have said such a provision in the Constitution was void as against natural law. But I believe it is now understood by this court, and everybody in this land, that the principle and the substantial application of the provisions of the 14th Amendment are just as binding upon Congress as they are upon the states, and as Congress was and is a body of delegated pow ers, that it was not necessary to say that Congress is not to deny to anybody the equal protection of the laws, because no power was delegated to them to do such monstrous things. It is true that the attainment of perfect equality in taxation is a baseless dream, as has been said. But it does not follow that the legisla. tive power can lawfully and purposely go to the other extreme and impose taxes broadly designed to be unequal, and by false and arbitrary classification set one great body of citizens in conflict with another. It appears to me, that it is the grand mission of this court of last resort, independent and supreme, to bring the Congress back to a true sense of the limitations of its powers. Hamilton, in one of his letters, stated the great truth, that "in framing a government which is to be administered by men over men, the great difficulty lies in this-you must first enable the government to control the governed; and, in the next place, oblige it to control itself. A dependence on the people is, no doubt, a primary control on the government; but expe rience has taught mankind to insist on auxil iary precautions." Argument of Mr. Richard Olney, Atty. Gen., by leave of the court, for the United States: I maintain, therefore, that pervading every line of the instrument providing for the distribution and exercise of the powers of this government, the power to impose taxes, direct and indirect, must, to greatest degree possible, be so exercised that the taxes bear upon its The chief interest of the government in the people equally in respect of the subjects, per present litigations relates to the constitutional sons, and rates to which they can apply. Al-questions which the several plaintiffs allege to be involved. I am willing to assume that the | or even highly improbable that Congress could constitutional issues the plaintiff's desire to mean to tax income at all unless this $65,000, have settled are so presented by these litiga-000 were included as part of it. tions that the court either must, or properly may, consider and determine them. If I am right in these observations, the constitutional contention of the plaintiffs simmers down to two points, one is that an income tax is a direct tax and must be imposed according to the rule of apportionment. I do not stop to discuss the question what the constitutional rule of apportionment is. I do not think I ought to delay the court for any considerable time with the question whether an income tax is direct or indirect. Scientifically, economically, practically, it may be either the oue or the other without the result of the present case being in the slightest degree affected. In them, the only material point is, is an income tax "direct" or otherwise, in the sense in which the term "direct" is used in the Constitution? The answer is that it is not a "di The plaintiff's bill and briefs and arguments show that many of the alleged objections to the validity of the income tax law are simply perfunctory in character. They are taken pro forma, by way of precaution, because of the possibility of a point developing in some unexpected connection. That makes it proper to sift out at the outset the exact propositions upon which alone the plaintiffs can and do place any real reliance. I think no time need be spent in discussing the averments that the income tax law is an invasion of vested rights, or takes property without the due process of law. These propositions are pure generalities, and if there is anything in them it is because they comprehend others which are more spe-rect" tax within the meaning of the Constitucific and which are the only real subjects of profitable discussion. Again, suppose it to be true that the income tax law undertakes to ascertain the income of citizens by methods which are not only disagreeable, but are infringements of personal rights. The consequence is, not that the law is void, but that the hotly denounced inquisitorial methods which are merely ancillary to its operation cannot be resorted to. The like considerations apply to the objection that the law is to be pronounced void because taxing the agencies and instrumentalities of the governments of the several states. tion unless at least five concurring judicial There seems to be no good reason why the income of state and municipal securities should not be taxable by the United States when it is assessed as part of the total income of the respective owners under a law assessing income generally and not discriminating between those securities and others of like character. In making that suggestion I do not overlook the able and elaborate opinion of the supreme court of the district holding, largely on the ground of want of power in the United States, that this income tax law properly construed has no application to the income from state and municipal securities. But suppose that In this connection, therefore, there is but the statute must be interpreted as taxing and one suggestion which I desire to very briefly unlawfully taxing state agencies and instru- notice. A part of the income taxable under mentalities. The result is, not that the law the law is rents of land, and a tax upon rents is bad in toto, but that it is bad only as to the is claimed to be a tax upon the land, and so income of state and municipal securities. The to be a "direct" tax within the meaning of the plaintiffs seek to meet this view by alleging in Constitution. But the suggestion is by no their bill that the income from state and mu- means novel, and certainly is not to be acnicipal securities throughout the country cepted as sound. There is a practical comamounts to $65,000,000. Having made that mercial sense in which a tax upon rents, is allegation, they then declare that it was the always a tax upon land. It affects the value intent of Congress and is necessary to accom- of land; land, the income from which is subplish the general purpose of the law, that this ject to a tax, must sell for less in the market $65,000,000 should be taxed. But the declara-than land, the income of which is not so subtion is mere assertion without evidence in its support. The plaintiffs do not even attempt to give the assertion an air of probability by comparing this $65,000,000 of income which the law cannot reach with the other and remaining income which the law does reach. Yet they certainly would have made the attempt if the comparison would show that this $65,000,000 of nontaxable income is so large a proportion of the entire income of all the peo ple of the country as to make it inconceivable ject. But, except in that view, a tax upon rents is not necessarily a tax upon land, but may be a tax upon a wholly distinct subjectmatter. Instead of being upon realty, it may be upon so much personalty wholly dissociated from the land. It is, of course, competent for the government to tax upon either plan-to tax rents under a scheme of taxation of personalty as personal property, or to tax them under a scheme of taxation as realty and as representing and measuring the value of real I then beg leave to submit that the plaintiffs gain nothing by the concession, and that, so far as the validity of this income tax law or any other tax law is concerned, the word "uniform" might as well be out of the Constitution as in it. The word is surplusage. It simply designates and describes an essential element of every tax-an element which is inherent in every valid tax and the absence of which would be sufficient to annul attempted exercise of the taxing power. estate. The only question is of the intent, a bankruptcy law or a naturalization law. It an intent to be looked for and found only in must have the same operation everywhere, the statute imposing the tax. That test being wholly irrespective of state lines. applied, What is the purpose of Congress in It is manifestly impossible for the plaintiffs the present income tax law? Is it to tax land to assent to this settled construction of the -rents being used as a ready mode of valua- word "uniform," and they do not assent to it. tion or is it to tax rents as so much personal They are compelled to insist that a tax, to be property irrespective of its origin? It is diffi "uniform" within the meaning of the Consti cult to see how that question can be answered tution, must be uniform, not only geographiexcept in one way. No land is aimed at or cally but as between taxpayers. In other attempted by the statute-there is no lien on words, they make it prescribe the nature and land for its payment-and the whole scope quality of a tax as well as its local application. and tenor of the statute show the subject of I submit that their contention is hopeless and the contemplated tax to be personal property may fairly be regarded as already decided and nothing else. It is well nigh conclusive against them. Let it be, however, for present on this point that there is no provision for the purposes that the adjective "uniform" devaluation and taxation of unproductive land-scribes and regulates the properties of a tax. a provision that would almost certainly have been found if the object had been to make a real estate tax. It may be suggested, how ever, that it may be the purpose to tax land but only such land as yields rent. But there is no sign or symptom of such an intent in any specific provision of the statute, while its general provisions, as already observed, con template nothing but a tax on personal estate. It may also be suggested that if a tax reaches rents in point of fact, it is a tax upon land, no matter what the intent of the taxing statute For the basis and the truth of this position may be. But that position is wholly unten it is only necessary to refer for a moment to able, because rents in the pocket of the owner the nature of the taxing power. The power to are not intrinsically and of themselves land. tax is wholly legislative, and in its essence is They are money, like any other. If for the the power to raise money from the public for purpose of a tax they are to have any artificial the public. That the object of a tax must be character as the representative of land, it is a public is undeniable. To force money from character impressed upon them from some the pockets of the people at large to enrich a source and can come from no other source private individual is so clear an abuse of the than the taxing statute itself. I submit, there- taxing power that every court would so defore, with great confidence, that while a tax clare on general principles without the aid of upon rents may under some circumstances be any express constitutional prohibition. Conheld to be in truth and in fact a tax upon land, versely, to take the property of a single indiit cannot be held to be such under a statute vidual for public uses is not to exercise the like the present which taxes rents without re- power to tax but the power of eminent dogard to land and merely as one of the constit-main, and can be done only on the condition uents of income. of rendering the individual full indemnity. This brings me to the only remaining point These inherent limitations of the taxing -to the constitutional objection which, not-power necessarily enter into and control every withstanding all that has been so earnestly and scheme of taxation and determine the mode forcibly said on the direct tax part of this con- and extent of its operation upon private pertroversy, is, I am satisfied, the plaintiffs' main sons and estates. Theoretically, a tax for the reliance. The point is that the income tax benefit of the public should fall equally upon imposed by the statute under consideration is all persons composing the public; should, as not "uniform." But what does the Constitu-text-writers and judges often express it, be tion mean by "uniform" as applied to a tax? But for the strong pressure upon the plaintiffs' counsel to find objections to this statute there would be no controversy as to the meaning. It is clearly shown by the debates in the constitutional convention and by the repeated and unequivocal utterances of the framers of the Constitution themselves. It is set forth by the writers on constitutional law, who are unanimous in their interpretation. It is judicially expounded by this court in the wellknown judgments in the so-called "Head Money cases. The uniformity of tax prescribed by the Constitution is a territorial uniformity. A Federal tax, which is not a poll tax nor a tax on land, must be the same in all parts of the country. It cannot be one thing in Maine and another thing in Florida. The law providing for such a tax must be like " ratable and proportional, and be so adjusted that every member of the community shall contribute his just and equal share toward the common defense and the general welfare. Moreover, under theoretical and ideal conditions such as can be conceived of, these general maxims would be actually and exactly applicable. If, for example, every individual in a community were like every other in respect of property, of the ability to bear taxation, and of the benefit to accrue from taxation, the question how he should be taxed could receive but one answer. Nothing would have to be done but to apply the rule of three and any other rule would be inadmissible for obvious reasons. To make one man pay a higher rate of tax than another when all the conditions in both cases are exactly alike, would, to the extent of the excess, be a taking |