Taxable year

“ Circumstances wholly fortuitous may determine the year in which income, whenever earned, is taxable, and may thus affect the amount of tax. Receipt of income or accrual of the right to receive it within the tax year is the test of taxability, not the time it has taken the taxpayer to earn it nor the duration of his investments which have finally resulted in profit. ”

“ The statute does not require that the services should be actually rendered during the taxable year, but that the payments therefor shall be proper expenses paid or incurred during the taxable year.
It is urged that under section 212 (b) of the Revenue Act of 1918 (40 Stat. 1064, 1065) the Commissioner was entitled to disallow the deduction in the return for 1920, upon the ground that if it were allowed the return would not clearly reflect the income for that year. It is said that the basic principle to be applied is that the true net income is to be taxed. ”

“ If, for any taxable year, it appears upon the production of evidence satisfactory to the commissioner that any taxpayer has sustained a net loss, the amount thereof shall be allowed as a deduction in computing the net income of the taxpayer for the succeding taxable year (hereinafter in this section called 'second year') and if such net loss is in excess of such net income (computed without such deduction) , the amount of such excess shall be allowed as a deduction in computing the net income for the next succeeding taxable year hereinafter in this section called 'third year') ”

“ The power to tax income like that of the new corporation is plain and extends to the gross income. Whether and to what extent deductions shall be allowed depends upon legislative grace; and only as there is clear provision therefor can any particular deduction be allowed.
The statutes pertaining to the determination of taxable income have proceeded generally on the principle that there shall be a computation of gains and losses on the basis of a distinct accounting for each taxable year ”

“ The tax being upon realized gain, it may constitutionally be imposed upon the entire amount of the gain realized within the taxable period, even though some of it represents enhanced value in an earlier period before the adoption of the taxing act. ”

“ Taxation is but the means by which government distributes the burdens of its cost among those who enjoy its benefits. And the distribution of a tax burden by placing it in part on a special class which by reason of the taxing policy of the State has escaped all tax during the taxable period is not a denial of equal protection. ”

“ Can any man believe sir, that if $23,000,000 per annum were now levied by direct taxation, or by an apportionment of the same among the states, instead of being raised by an indirect tax, of the severe effect of which few are aware, that the waste and extravagance, of the unauthorized imposition of duties, and appropriations of money for unconstitutional objects, would have been tolerated for a single year? ”

“ But of this total gain received by the insured a part is attributable to and accrued during the period before the effective date of the Sixteenth Amendment (February 25, 1913) , and of the first law taxing the income of individuals (March 1, 1913) , and hence, for income tax purposes, must be deemed an accretion to capital not taxable by the income tax act enacted under the Sixteenth Amendment. ”

“ Each of the fifteen income tax acts adopted from time to time during that last 67 years has been retroactive, in that it applied to income earned, prior to the passage of the act, during the calendar year. ”

“ It is said that the gift became a capital asset of the donee to the extent of its value when received and, therefore, when disposed of by her no part of that value could be treated as taxable income in her hands.
'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.'
Income is the thing which may be taxed-income from any source. The amendment does not attempt to define income or to designate how taxes may be laid thereon, or how they may be enforced. ”

“ Power to lay and collect taxes for Federal purposes, being vested exclusively in Congress, it becomes necessary, whenever the validity of such a tax is drawn in question, to examine the act imposing the tax, as the question in every case must necessarily depend upon its true construction, unless it appears that the tax is not apportioned as required, or not uniform, or the object taxed is one not taxable for such a purpose. ”

“ The revenue acts since the Sixteenth Amendment have consistently assessed income taxes on the basis of annual accounting periods, either the calendar year or the different fiscal year which the taxpayer may adopt. ”

“ The tax on movables was framed in a more systematic way. Instead of distinct charges on different classes, or variations in proportion of levy from one-fourth to one-fortieth, the policy of imposing a tax of one-tenth on the towns and one-fifteenth on the counties was adopted. Greater strictness in assessment was sought by the appointment of commissioners for each county, supplied with special instructions as to taxable goods and exemptions. ”

“ 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 duty of this court to examine taxing acts to see that the use of federal tax exempt subjects as a measure for taxes imposed in terms upon taxable subjects is not a cloak, under which the former in substance and effect are taxes, was never more imperative than now, when, by reason of increased and increasing public expenditures, states and municipalies are driven to search in every direction for additional sources of revenue. ”

“ However, growth in certified tax revenues, which is the result of either increases in tax rates on income or retail sales or the repeal of exemptions therefrom, may be excluded, in whole or in part, from the computation immediately preceding for a period of time not to exceed six calendar years from the calendar year in which such tax rate increase or exemption repeal was effective. Additional appropriations may be made at any time so long as the ten percent limitation established herein is not exceeded. ”

“ There is little or no uniformity among the taxation schemes of the one hundred comparatively free and sovereign states as economic and other conditions vary greatly in different sections of the continent. Every state has ten basic constitutional provisions which cannot be modified except by consent of the federal supreme court, and one of these articles prevents levying a tax of more than one per cent on the value of any property in any one year, homesites, whether in city or country, being exempted. ”

“ A good system of taxation ought to provide for a self-acting increase in the revenue in proportion as the population and the consequent demands for governmental expenditure increase. It has been found by experience that an old tax causes less inconvenience than a new tax of smaller amount, a fact which is so striking in some cases as to have given rise to the saying that an old tax is no tax. ”

“ For example, a person whose tax payment, the tax he owes, is $1,000, will pay, under this proposal, an extra $60 over the 12-month period, or $5 a month. The overwhelming majority of Americans who pay taxes today are below that figure and they will pay substantially less than $5 a month. Married couples with two children, with incomes up to $5,000 per year, will be exempt from this tax--as will single people with an income of up to $1,900 a year. ”

“ I recommend that the normal income tax rates applicable to the incomes of individuals for the calendar year 1929 be reduced from 5, 3, and 1 1⁄2 per cent, to 4, 2, and 1⁄2 per cent, and that the tax on the income of corporations for the calendar year 1929 be reduced from 12 to 11 per cent. ”

“ Now if Americans today still paid the income and excise tax rates in effect when I came into the Presidency, in the year 1964, their annual taxes would have been over $20 billion more than at present tax rates. ”

“ With the great reduction of taxation by the acts of Congress at its last session, the expenditure of the Government in collecting the revenue will be much reduced for the next fiscal year. It is very doubtful, however, whether any further reduction of so vexatious a burden upon any people will be practicable for the present. ”

“ That there shall be levied, assessed, collected and paid annually upon the entire net income arising or accruing from all sources in the preceding calendar year to every citizen of the United States, whether residing at home or abroad, and to every person residing in the United States, though not a citizen thereof, a tax of 1 per centum per annum upon such income, except as hereinafter provided. ”

“ 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. ”

“ On top of this condition the legislature last year laid a direct tax of eighteen millions of dollars upon our people, and there is every indication that it will be several years before it becomes unnecessary to lay a direct tax either larger or smaller than that put upon us last year. ”

“ If the personal tax were deducted from the amount of personal and house tax combined we would find that the assessment of the state in the product of the house tax, that is to say the product of the tax on rentals, amounts to 41 or 42 millions, and that the share of localities in the product of this tax surpasses that of the state by 8 or 9 millions (Year 1877.) ”

“ Article II The income (other than wages) and corporation taxes, shall be increased by 6% on the assessment for the whole of the present year. The whole increase so affected, will be collected before 31 December 1945. ”

“ We should be following an almost universal example of modern governments if we were to draw the greater part or even the whole of the revenues we need from the income taxes. By somewhat lowering the present limits of exemption and the figure at which the surtax shall begin to be imposed, and by increasing, step by step throughout the present graduation, the surtax itself, the income taxes as at present apportioned would yield sums sufficient to balance the books of the Treasury at the end of the fiscal year 1917 without anywhere making the burden unreasonably or oppressively heavy. ”

“ In other words, the actual tax to be paid does not increase simply as the legacy increases, which would be the rule of equality, but the rate of taxation is also increased as the amount of the legacy passes from one sum to another. ”

“ A tax measured by the net income of residents is an equitable method of distributing the burdens of government among those who are privileged to enjoy its benefits. The tax, which is apportioned to the ability of the taxpayer to pay it, is founded upon the protection afforded by the state to the recipient of the income in his person, in his right to receive the income and in his enjoyment of it when received. ”

“ We shall then have that mode of taxation which is the most easy, and least oppressive to the people, because it will be exercised by those who are acquainted with their condition and circumstances. This, sir, is the great object we wish to secure—that our people should be taxed by those who have a fellow-feeling for them. I think I can venture to assert that the general government will lay such taxes as are the easiest and the most productive in the collection. ”

“ The money which is needed to pay the expenses of administering the government, if the state has no permanent source of revenue, or income, must be raised by taxation. A tax is a rate or sum of money assessed upon the person or property of a citizen for the use of the state. When assessed upon the person, it is called a poll-tax, or capitation tax, being a certain sum on every poll, or head. But as persons ought generally to contribute to the public expenses according to their ability, taxes are more just and equal when laid upon the property of the citizens. ”

“ A tax is an enforced contribution for the payment of public expenses. It is laid by some rule of apportionment according to which the persons or property taxed share the public burden, and whether taxation operates upon all within the state, or upon those of a given class or locality, its essential nature is the same. ”

“ If the assumption I have made that the framers of the constitution in providing for the apportionment of a direct tax had in mine a subject-matter or subjects-matter which had some general distribution among the states is correct, it is clear that a tax on incomes-as ubject not of general distribution at that time or since-is not a 'direct tax,' in the sense of the constitution. ”

“ 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. ”