George Sutherland

“ Far less could it be thought that a tax on property, or income from it, is an interference with commerce because the property had at some time been, or might some time become, the subject of such commerce. ”

“ If the exemption does not merit condemnation as a denial of the equal protection which the Fourteenth Amendment extends to every person, nothing can be added to the vehemence or effectiveness of the denunciation by invoking the command of the privileges and immunities clause. ”

“ A tax immunity created avowedly for the protection of the citizen's privilege of movement from state to state is thus pressed far beyond the requirements of the interest put forward to justify it, and to a point which has never been thought needful or even desirable for the protection of the commerce of the nation. ”

“ The general classification, namely, that the right to a partial exemption from a tax upon one class of income will depend upon whether the taxpayer is in receipt of income of another class with respect to which a different exemption applies, does not seem to us to be open to the objection that it is arbitrary or capricious, simply because, like any other general rule of taxation, its administration may involve incidental instances of inequality. ”

“ If, in the face of so much which is persuasive of the legistimate purpose and effect of this legislation, we are to declare that we cannot say whether the benefits intended either will or will not result, it does not follow that the Vermont Legislature is similarly uninformed. We must assume that it is not, unless we are to discard the salutary principle of decision, that, out of a decent respect to an independent branch of the government, legislative acts must be taken to be based on facts which support their constitutional validity unless the contrary reasonably appears. ”

“ If Vermont chooses to encourage, by tax exemption, loans at favorable rates of interest within the state, because it believes that local interests will be benefited, it can hardly be said for that reason to be contravening a Constitution that has known a protective tariff for more than 100 years. ”

“ Even if we are to assume, in the absence of any actual knowledge, that money loaned in the state at favorable rates would not benefit it if used elsewhere, and, further, that in fact some money is so loaned and used, there is no discernible reason why those circumstances should be deemed to invalidate the tax, and none is stated by the Court. It is irrelevant that the state, which has selected domestic loans for exemption in furtherance of a state policy, has not excluded from the exemption every transaction which conceivably might not advance its purpose. ”

“ Purpose or motive of the selection of the objects of taxation and exemption is material only so far as it is needful to ascertain whether the discrimination is invidious. If the choice is not condemned for that reason, it has never been held that an exemption must fail because it may benefit some who do not advance the legislative purpose. A classification for a permissible end is not to be condemned because it operates to prohibit transactions in themselves harmless, or fails to reach others which are harmful. ”

“ Unless the constitutional validity of the exemptions is to turn upon the ground that we approve laws enacted to avoid taxing the same economic interest twice, but disapprove those to encourage residents to invest their funds at home, it would seem that the considerations which have led to upholding the one exemption would not admit of condemning the other. ”

“ The tax on dividends, already discussed and upheld, rests in a different situation. Although dividends from outside investments are taxed, and those from state investments in terms are exempt, they are, as already appears, in substance and effect treated alike; the one by a tax falling directly upon the income of the individual stockholders, and the other falling indirectly but no less definitely upon that income, in the form of a tax which is first inposed upon the corporation as a franchise tax measured by income, but the burden of which ultimately is borne by the stockholders. ”

“ I think that the exemption, from the tax, of net income from money loaned within the state at not more than 5 per cent., like the exemption of income from dividends of corporations earned within the state, does not deny equal protection or infringe any privilege or immunity of citizens of the United States, and that the judgment should be affirmed in its entirety. ”

“ The theory upon which the tax is laid upon dividends realized from out-of-state business while leaving dividends realized from domestic business untaxed, is that the 2 per cent. franchise tax, especially with the property tax added, has the effect of indirectly imposing a tax burden upon the latter measurably equivalent to that imposed directly upon the former. ”

“ In the great variety of cases which have arisen, decisions may seem to be difficult of reconcilement; but investigation will generally cause apparent conflicts to disappear when due weight is given to material circumstances which distinguish the cases. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied. We think the provision now under consideration meets this test. ”

“ As this Court has repeatedly held, inequalities resulting from the singling out of one particular class for taxation or exemption, regardless of the reason for the choice, or even if there is no discernible reason, are not to be pronounced invalid where there is no clear indication that the purpose or effect is a hostile or oppressive discrimination against particular persons or classes. ”

“ If the accidents of trade lead to inequality or hardship, the consequences must be accepted as inherent in government by law instead of government by edict.' Fox v. Standard Oil Co., 294 U.S. 87, 102, 55 S.Ct. ”

“ A state law prohibiting the exercise of any of these rights in another state would, therefore, be invalid under the Fourteenth Amendment. The imposition by one state of a discriminating tax upon a citizen resident in another state for trading in the territory of the former has been held invalid. ”

“ This Court has many times pointed out that movements of persons across state boundaries are a part of interestate commerce, subject to the regulation and entitled to the protection of the national government under the commerce clause. ”