Head tax

“ The adoption of the taxing act, as recommended by the commission, may therefore be taken, as appellant contends, to evidence a definite and specific legislative purpose to levy a new type of franchise tax, measured by corporate net income, including the tax exempt income from federal and state bonds. ”

“ But taxation is not so much concerned with the refinements of title as it is with actual command over the property taxed-the actual benefit for which the tax is paid. If a man directed his bank to pay over income as received to a servant or friend, until further orders, no one would doubt that he could be taxed upon the amounts so paid. ”

“ Board of Assessors, 121 La. 116, 46 So. 122, where open accounts arising on the sale of merchandise were the subject of the assessment, the court said: 'There can be no serious question but that the legislature has provided that credits due upon open accounts arising out of business done in this state by nonresidents shall be taxed. . . . The state imposes this tax because of her need of the revenue to be derived from it; she extends to the business the protection of her laws, and seeks to make the business bear its just proportion of the burden of taxation. ”

“ And the amount of the taxation may be determined by the value of the property, or its use, or its capacity, or its productiveness. It may touch business in the almost infinite forms in which it is conducted, in professions, in commerce, in manufactures, and in transportation. Unless restrained by provisions of the Federal Constitution, the power of the State as to the mode, form, and extent of taxation is unlimited, where the subjects to which it applies are within her jurisdiction. ”

“ The equitable distribution of the costs of government through the medium of an income tax is a delicate and difficult task. In its performance experience has shown the importance of reasonable opportunity for the legislative body, in the revision of tax laws, to distribute increased costs of government among its taxpayers in the light of present need for revenue and with knowledge of the sources and amounts of the various classes of taxable income during the taxable period preceding revision. ”

“ The State may impose taxes upon the corporation as an entity existing under its laws, as well as upon the capital stock of the corporation or its separate corporate property. And the manner in which its value shall be assessed and the rate of taxation, however arbitrary or capricious, are mere matters of legislative discretion. It is not for us to suggest in any case that a more equitable mode of assessment or rate of taxation might be adopted than the one prescribed by the legislature of the State; our only concern is with the validity of the tax ”

“ This inherent limitation upon the taxing power forbids the imposition of taxes which are unequal in their operation upon 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. ”

“ In the first place, no attempt has been made by the Treasury to collect further taxes, upon the theory that the payment of the additional taxes creates further income, and the question of a tax upon a tax was not before the Circuit Court of Appeals, and has not been certified to this Court. We can settle questions of that sort when an attempt to impose a tax upon a tax is undertaken, but not now. ”

“ The estimated revenue from these sources was $877,500, affording a small excess over the sum which would be required to pay the interest on the assumed debt. The policy of the measure was discussed in a well-digested and able argument, detailing many motives, in addition to those assigned in his original report, for preferring the system now recommended to accumulated burdens on commerce or to a direct tax on lands.
A new tax is the certain rallying point for all those who are unfriendly to the administration or to the minister by whom it is proposed. ”

“ At the outset appellant contends that the tax, although stated in the Taxing Act to be on corporate franchises, is in reality a tax on income, and as such falls within the class of taxes which concededly may not be directly imposed on federal instrumentalities. ”

“ Thursday.—Chancellor of Exchequer admittedly allured by what he describes as "attractive features" of proposal to raise fresh revenue. It is simply the levying of a special tax on all persons using titles.
Idea not absolutely new. Principle established in case of citizens displaying crest or coat-of-arms. What is novel is suggested method of taxation. Differing from the dog-tax, levied at a common rate, it is proposed that our old nobility shall, in this fresh recognition of their lofty estate, be dealt with on a sliding scale. ”

“ Indirect taxes can be evaded by abstaining from the activity that is taxed. They can usually also be shifted to others, and are generally paid by the consumer, or user of the article that is taxed. In general, direct taxes are levied by the State and municipal governments, while the National government derives its revenue (with the exception of the income tax) mainly from indirect taxes. ”

“ The tax was not eo nomine on the notes, but was expressed to be on 'credits, money loaned, bills receivable,' etc., and its amount was ascertained by computing the sum of the face value of all the notes held by the company at the time of the assessment.
The purpose of the taxing law was said to be to lay the burden of taxation equally upon those who do business within the state. ”

“ But, wholly apart from extrinsic circumstances, the statute itself in terms seems clearly to impose an income tax. The tax is not one upon the privilege of doing business, but it is an annual tax for the privilege of doing business, to be computed upon the basis of the net income for the year next preceding. ”

“ The fact that Congress has already crafted some deductions and exemptions in the Code also is of no consequence, for the guiding principle is that a tax "must be uniformly applicable to all, except as Congress provides explicitly otherwise." ”

“ It was levied only upon that part of their gains, or the interest due from them, which had become payable to, and, therefore, income of their shareholders and bondholders. Those persons have paid taxes upon the full income of six entire years under the act of 1864. The judgments in these cases compel them to pay a tax upon their income for six years and a half, when all other persons whose income was derived from interest or dividends in other companies were relieved at the expiration of six years. In my judgment, the act of Congress warrants no such injustice. ”

“ It is the foundation of its credit in the business community. The legislature well knew the peculiar system under which these institutions were incorporated, and the working of it; and, when providing for a tax on their capital at a valuation, they could not but have intended a tax upon the property in which the capital had been invested. We have seen that such is the practical effect of the tax, and we think it would be doing injustice to the intelligence of the legislature to hold that such was not their intent in the enactment of the law. ”

“ The law declares that a tax of 2 per cent. 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 $10,000, and this act levies a tax of 2 per cent. ”

“ Congress did not intend, however, when it refused to tax the newly acquired shares as income in praesenti to exclude them from taxation in futuro if disposed of at a profit. A tax upon a gainful use either of capital or of income, when the gain is fully realized, is a true tax upon income and not a capital levy. ”

“ When a tax is levied, the need by the State levying it of a certain sum of money must first be ascertained by competent authority, legislative or executive, as the case may be, and the law-making power must then, according to a prescribed form, enact that to raise such a sum a certain tax shall be levied on designated property or occupations. ”

“ Subsequently to this act being passed-within the fifteen years, and the annual profits not yet exceeding eight per cent-the legislature of the State passed an act taxing the franchise of the road.
'The only way in which the property of this company could be reached for taxation at all, was after the limitation of the fifteen years had expired. The legislature was then at liberty to tax the individual shares of the stockholders, whenever their annual profits exceeded eight per cent. When a statute limits a thing to be done in a particular mode, it includes a negative of any other mode. ”

“ That history leads us to conclude that the test proposed by the Government is consistent with the intent of Congress and is necessary to effectuate the purpose of the accumulated earnings tax.
The accumulated earnings tax is one congressional attempt to deter use of a corporate entity to avoid personal income taxes. The purpose of the tax 'is to compel the company to distribute any profits not needed for the conduct o its business so that, when so distributed, individual stockholders will become liable' for taxes on the dividends received, Helvering v. ”

“ But we think the tax assailed here finds support in reason, and in the practical needs of a taxing system which, under constitutional limitations, must accommodate itself to the double demand that interstate business shall pay its way, and that at the same time it shall not be burdened with cumulative exactions which are not similarly laid on local business. ”

“ It has long been settled that an Act of Congress which on its face purports to be an exercise of the taxing power, is not any the less so because the tax is burdensome or tends to restrict or suppress the thing taxed. ”

“ People are accustomed to it and accept it without doubt. The present requirement is not different in fundamental principle, although the tax is paid in kind and falls only on the class capable of paying that kind of tax,-a class of quasi public corporations specially subject to legislative control. ”

“ If, as claimed. they are able to procure better management, a tax upon gains will uniformly reflect the effects of such management. And the same principle holds true of every advantage said to adhere in the magnitude of a business.
As we have said, the statute does not purport to levy a tax on incomes. ”

“ If requisitions were to be made on the several states, proportionate to their abilities, the several state legislatures, knowing the circumstances of their constituents, and that they would ultimately be compelled to pay, would lay the tax in a convenient manner, and would be able to pay their quotas at the end of the year. They are better acquainted with the mode in which taxes can be raised, than the general government can possibly be. ”

“ The principle of imposing taxation not for revenue, but for some ulterior or ethical purpose, such as the destruction of swollen fortunes, is liable to constitutional objection in this country, though the courts may not look behind the tax to the motive, unless the latter is expressed upon the face. For this reason, the present corporation tax, on its surface, is imposed solely for the purpose of raising revenue, though in debate in Congress it was advocated mainly for the object of bringing large corporations under Federal examination and control. ”

“ It is not and cannot be denied that, under the broad and comprehensive taxing power conferred by the constitution on the national government, congress has the authority to tax incomes from whatsoever source arising, whether from real estate or personal property or otherwise. It is equally clear that congress, in the exercise of this authority, has the discretion to impose the tax upon incomes above a designated amount. The underlying and controlling question now presented is whether a tax on incomes received from land and personalty is a 'direct tax,' and subject to the rule of apportionment. ”

“ Net earnings of $100,000 may represent for one man a return on a capital of $2,000,000 and for another a return on a capital of double that amount, yet the tax will be the same for each. So also it is no answer to say that in the administration of this statute two merchants whose sales are very large are subject to as heavy a tax as many thousands of merchants whose sales are in the lowest brackets. One might as well compare the federal income tax of a banker whose net earnings are in the millions with that of a thousand clerks who by reason of exemptions are to pay no tax whatever. ”

“ For example, when a railroad charter, subject to repeal, exempted the company from all taxation except a certain percentage on the cost of its works, it was held that this exemption was not repealed by a subsequent general tax law, enacting that all corporations should be taxed for the full amount of their property as other persons are taxed, and repealing all laws inconsistent therewith. ”