William Howard Taft

“ Even though it is only equal to the tax upon normal premiums paid in the Philippine Islands, it is imposed for the purpose of discouraging insurance in companies that do not pay tribute to the state because out of its taxing or penalizing jurisdiction. As the language above quoted from the opinion in the Compress Case shows, the action of Arkansas was invalid, because of its attempt 'to regulate' the conduct of the Compress Company in respect to a matter not within its local jurisdiction. Taxation is regulation just as prohibition is. ”

“ Louisiana to earn one's livelihood by any lawful calling certainly is consistent, as we all know, with the calling being taxed.
Sometimes there may be a difficulty in deciding whether an imposition is a tax or a penalty, but generally the intent to prohibit when it exists is plainly expressed. Sometimes even when it is called a tax the requirement is shown to be a penalty by its excess in amount over the tax in similar cases, as in St. Louis Cotton Compress Co. v. Arkansas. ”

“ This court said that the Equitable Society was doing business in Pennsylvania when it was annually paying dividends in Pennsylvania or sending an adjuster into the state in case of dispute or making proof of death, and therefore that it was not improper to measure the tax for doing business in the state by the number of individuals whose lives had been insured and with respect to whom and the execution of whose contracts the company was necessarily doing business in the state, even if the premiums paid by some of them had not been paid in the state. ”

“ It is true, as indicated in the last cited case, that every exaction of money for an act is a discouragement to the extent of the payment required, but that which in its immediacy is a discouragement may be part of an encouragement when seen in its organic connection with the whole. ”

“ A legal restriction upon the taxing power of the Philippine government over citizens and residents of the Islands is found in the liberty secured by the Organic Act which embraces the right to make contracts and accumulate property and do business outside of the Philippine Islands and beyond its jurisdiction without prohibition, regulation, or governmental exaction. ”