Knowlton v. Moore, 178 U.S. 41 (1900)

Mr. John G. Carlisle and Mr. Henry M. Ward filed an additional brief, and Mr. Wheeler H. Peckham, Mr. Olney and Mr. William Edmond Curtis were on this brief, a p. 43Mr. Thomas B. Reed and Mr. Thomas Thacher for plaintiffs in error filed a brief in response to the suggestion of the court by its order of February 26, 1900, etc. Mr. Solicitor General filed a supplemental brief in response to the suggestion of the court.

“ 1. The provisions of the act of Congress under which it is sought to impose, assess and collect the said tax or duty are in p. 45violation of the provisions of article I, sections 8 and 9, of the Constitution of the United States, and are therefore void.

1 a^S were direct, they were levied on rights created ° ey y state law, depending for their continued existence e consent of the several States, a volition which Congress p. 46has no power to control, and as to which it could not, therefore, exercise its taxing authority; third, if the taxes were not direct, and were not assessed upon objects or rights which were beyond the reach of Congress, nevertheless the taxes were void, because they were not uniform, throughout the United States, as required by article 1, section 9, of the Constitution of the United States; fourth, because, although the taxes be held to have been in all respects constitutional, nevertheless they were illegal, since in their assessment the rate of the tax was determined by the aggregate amount of the personal estate of the deceased, and not by the sum of the legacies or distributive shares, or the right to take the same, which were the objects upon which by law the taxes were placed.

Although it may be, in the abstract, an analysis of these questions, in logical sequence, would require a consideration of the propositions in the order just stated, we shall not do so for the following reasons : The inquiry whether the taxes are direct or indirect must involve the prior determination of the objects or rights upon which by law they are imposed and assessed, since it becomes essential primarily to know what the law assesses and taxes in order to completely learn the nature of the burden. So, also, to solve the contention as to want of uniformity, it is requisite to understand not only the objects or rights which are taxed, but the method ordained by the statute for assessing and collecting. This must be the case, since uniformity, in whatever aspect it be considered, involves knowledge as to the operation of the taxing law, an understanding of which cannot be arrived at without a clear conception of what the law commands to be done. For these reasons we shall first, in a general way, consider upon what rights or objects death duties, as they are termed in England, are imposed. Having, from a review of the history of such taxes, reached a conclusion on this subject, we shall decide whether Congress has power to levy such taxes. This being settled, we shall analyze the particular act under review, for the purpose of ascertaining the precise form of tax for which it provides and the mode of assessment which it directs. These questions being disposed of, we p. 47shall determine whether the taxes which the act imposes are void, because not apportioned or for the want of uniformity.

By the Finance Act of 1894, the probate duty was superseded by what was termed the estate duty. This, like the pro a e p. 49duty, was a tax distinct from those imposed by the Legacy and Succession Duty Acts upon the receipt of real or personal property, or an interest therein, although in some administrative features it modified or regulated the subject of a succession duty. This tax is payable out of the general revenue of the estate. Re Bourne, (1893) 1 Ch. 188, cited by Hanson at p. 354.

VOL. CLXXVIII—4 p. 50extent to which they go) to the evolution of the system in England.

In the statute of August 27, 1894, 28 Stat. 509, c. 349, what was in effect a legacy tax was imposed by the provisions of section 28. Ib. 553. The tax was eo nomine an income tax, but was in one respect the legal equivalent of a legacy tax, since among the items going to make up the annual income which was taxed was “ money and the value of all personal property acquired by gift or inheritance.” This law was not enforced. Its constitutionality was assailed on the ground that the income tax, in so far as it included the income from real estate an personal property, was a direct tax within the meaning of the Constitution, and was void because it had not been apportion . The contention was twice considered by this court. On t e first hearing, in Pollock v. Farmers’ Loan & Trust Company 167 U. S. 429, it was decided that, to the extent that the income taxes included the rentals from real estate, the tax was a direc tax on the real estate, and was therefore uncon stitutiona, because not apportioned. Upon the question of whet er unconstitutionality of the tax on income from real estate ren dered it legally impossible to enforce all the other taxes pr vided by the statute, the court was equally divided in opinio p. 53Ib. 586. On a rehearing (158 U. S. 601) the previous opinion was adhered to, and it was moreover decided that the tax on income from personal property was likewise direct, and that the law imposing such tax was therefore void because not providing for apportionment. The court said (p. 637):

and legaCy ““ imP°sed by one of the States The Xa) W^onsidered “ Mager v. Grima, 8 How. 490. upheld tb C°Urt’dellvered by Mr- Chief Justice Taney, ™ SUch The subject was P on in United States v. Perkins, 163 U. S. 625. The p. 54question was whether property bequeathed to the United States could be lawfully included in a succession tax. It was decided that it could be. In the opinion, delivered by Mr. Justice Brown, it was said (p. 628):

e Oman and ancient law, in that of modern France, Gerany and other continental countries, in England and those of p. 56her colonies where such laws have been enacted, in the legislation of the United States and the several States of the Union, the following appears : Although different modes of assessing such duties prevail, and although they have different accidental names, such as probate duties, stamp duties, taxes on the transaction, or the act of passing of an estate or a succession, legacy taxes, estate taxes or privilege taxes, nevertheless tax laws of this nature in all countries rest in their essence upon the principle that death is the generating source from which the particular taxing power takes its being and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested.

Having ascertained the nature of death duties, the first question which arises is this : Can the Congress of the United States levy a tax of that character ? The proposition that it cannot rests upon the assumption that, since the transmission of property by death is exclusively subject to the regulating authority of the several States, therefore the levy by Congress of a tax on inheritances or legacies, in any form, is beyond the power of Congress, and is an interference by the National Government with a matter which falls alone within the reach of state legislation. It is to be remarked that this proposition denies to Congress the right to tax a subject-matter which was conceded to be within the scope of its power very early in the history of the government. The act of 1797, which ordained legacy taxes, was adopted at a time when the founders of our government and framers of our Constitution were actively participating in public affairs, thus giving a practical construction to the Constitution which they had helped to establish. Even the then members of the Congress who had not been delegates to the convention, which framed the Constitution, must have had a keen appreciation of the influences which had shaped the Constitution and the restrictions which it embodied, since all questions which relate to the Constitution and its adoption must have been, at that early date, vividly impressed on their minds. It would, un er these conditions, be indeed surprising if a tax should have been levied without question upon objects deemed to be beyond t e grasp of Congress because exclusively within state authority. p. 57It is, moreover, worthy of remark that similar taxes have at other periods and for a considerable time been enforced; and, although their constitutionally was assailed on other grounds held unsound by this court, the question of the want of authority of Congress to levy a tax on inheritances and legacies was never urged against the acts in question. Whilst these considerations are of great weight, let us for the moment put them aside to consider the reasoning upon which the proposition denying the power in Congress to impose death duties must rest.

(wings ank, 170 U. S. 283, 288. An illustration is found in p. 58United States v. Perkins, 163 U. S. 625, where the right of the State of New York to levy a tax on a legacy bequeathed to the Government of the United States was in part rested on the privilege enjoyed by the State of New York to regulate successions. Some state courts, on the other hand, have held that, despite the power of regulation, no greater privilege of taxation exists as to inheritance and legacy taxes than as to other property. Cope's Appeal, 191 Penn. St. 1; State v. Ferris, 53 Ohio St. 314; State v. Gorman, 40 Minn. 232; Curry v. Spencer, 61 N. H. 624. In State n . Switzler, 143 Missouri, 287, the power of the legislature of Missouri to levy a uniform tax upon the succession of estates was conceded, though such tax was declared not to be a tax upon property in the ordinary sense. The court nevertheless held that the particular tax in question, which was progressive in rate, was invalid, because it violated a provision of the state constitution; the decision, in effect, being that because the legislature had the power to regulate successions, it was not thereby justified in levying a tax which was not sanctioned by the state constitution.

It is not denied that, subject to a compliance with the limitations in the Constitution, the taxing power of Congress extends to all usual objects of taxation. Indeed, as said in the License Tax Cases, 5 Wall. 462, 471, after referring to the limitations expressed in the Constitution, “ Thus limited, and thus only, it (the taxing power of Congress) reaches every subject, and may be exercised at discretion.” The limitation which would ex elude from Congress the right to tax inheritances and legacies is made to depend upon the contention that as the power to regulate successions is lodged solely in the several States, there fore Congress is without authority to tax the transmission or p. 59receipt of property by death. This proposition is supported by ■a reference to decisions holding that the several States cannot tax or otherwise impose burdens on the exclusive powers of the National government or the instrumentalities employed to carry such powers into execution, and, conversely, that the same limitation rests upon the National government in relation to the powers of the several States. Weston v. Charleston, 2 Pet. 449; McCulloch v. Maryland, 4 Wheat. 316, 431, 439; Bank of Commerce n . New York City, 2 Black, 620; Collector v. Day, 11 Wall. 113,124^ United States v. Railroad Co., 17 Wall. 322, 327; Railroad Co. v. Peniston, 18 Wall. 5.

’ P e ges, and, indeed, all property and the contracts p. 60which arise from its ownership, are subject more or less to state regulation, exclusive in its nature. If the proposition here contended for be sound, such property or dealings in relation thereto cannot be taxed by Congress, even in the form of a stamp duty. It cannot be doubted that the argument when reduced to its essence demonstrates its own unsoundness, since it leads to the necessary conclusion that both the National and state governments are divested of those powers of taxation which from the foundation of the government admittedly have belonged to them. Certainly, a tax placed upon an inheritance or legacy diminishes, to the extent of the tax, the value of the right to inherit or receive, but this is a burden cast upon the recipient and not upon the power of the State to regulate. This distinction shows the inapplicability to the case in hand of the statement made by Mr. Chief Justice Marshall in McCulloch n . Maryland, 4 Wheat. 316, 431, “that the power to tax involves the power to destroy.” This principle is pertinent only when there is no power to tax a particular subject, and has no relation to a case where such right exists. In other words, the power to destroy which may be the consequence of taxation is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even although it happens that in some particular instance no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope. But this reasoning has no application to a lawful tax, for if it had there would be an end of all taxation; that is to say, if a lawful tax can be defeated because the power which is manifested by its imposition may when further exercised be destructive, it would follow that every lawful tax wrould become unlawful, and therefore no taxation whatever could be levied. Under our constitutional system both the National and the state governments, moving in their respective orbits, have a common authority to tax many and diverse objects, but this does not cause the exercise of its lawful attributes by one to be a curtailment of the powers of government of the other, for if it did there would practically be an end of the dua system of government which the Constitution established. T e contention was adversely decided in the License Tax Cases, p. 61supra, where (p. 470) the court said: “We come now to examine a more serious objection to the legislation of Congress in relation to the dealings in controversy. It was argued, for the defendants in error, that a license to carry on a particular business gives no authority to carry it on ; that the dealings in controversy were parcel of the internal trade of the State in which the defendants resided; that the internal trade of a State is not subject, in any respect, to legislation by Congress, and can neither be licensed nor prohibited by its authority; that licenses for such trade, granted under acts of Congress, must, therefore, be absolutely null and void; and, consequently, that penalties for carrying on such trade without such license could not be constitutionally imposed.” The court, after thus stating the argument, decided that the license was a mere form of excise taxation; that it conferred no right to carry on the business (the selling of lottery tickets and the liquor traffic) if forbidden to be engaged in by the State, but license was applicable whenever under the state law such business was permitted to be done. Many other opinions of this court have pointed out the error in the proposition relied on, and render it unnecessary to do more than refer to them. Lane County v. Oregon, 7 Wall. 71,77; Veazie Bank v. Fenno, 8 Wall. 533,547; National Bank v. Commonwealth, 9 Wall. 353, 362; Collector v. Day, 11 Wall. 113, 127; United States v. Railroad Company, 17 Wall. 322 327; Railroad Co. v. Peniston, 18 Wall. 5, 36; California v. Central Pacific Railroad Co., 127 U. S. 1, 40.

the persons entitled to beneficial interest therein untruly, or shall not truly and correctly set forth and state therein the clear value of such beneficial interest, or where no administration upon such property or personal estate shall have been granted or allowed under existing laws, the collector or deputy collector shall make out such lists and valuation as in other cases of neglect or refusal, and shall assess the duty thereon; and the collector shall commence appropriate proceedings before any court of the United States, in the name of the United States, against such person or persons as may have the actual or constructive custody or possession of such property or personal estate, or any part thereof, and shall subject such property or personal estate, or any portion of the same, to be sold upon the judgment or’ decree of such court, and from the proceeds of such sale the amount of such tax or duty, together with all costs and expenses of every description to be allowed by such court, shall be first paid, and the balance, if any, deposited according to the order of such court, to be paid under its direction to such person or persons as shall establish title to the same. The deed or deeds, or any proper conveyance of such property or personal estate, or any portion thereof, so sold under such judgment or decree, executed by the officer lawfully charged with carrying the same into effect, shall vest in the purchaser thereof all the title of the delinquent to the property or persona estate sold under and by virtue of such judgment or decree, and shal ielease every other portion of such property or personal estate from the ien or charge thereon created by this act. And every person or persons who shall have in his possession, charge or custody any record, file or paper containing, or supposed to contain, any information concerning such prop- p. 65of personalty, with a progressive rate on each, separately determined by the sum of each of such legacies or distributive shares.

aft & lntended to take effect in possession or enjoyment nerT ” ^ran^or or bargainor, to any person or anv etC ^bat is to say, whilst the law places the duty on egacy or distributive share passing by death, it puts a like vol . clxxv iii —5 p. 66burden, on gifts which may have been made in contemplation of death and otherwise than by last will and testament.

Following the paragraph from which the foregoing has been quoted, the statute makes five distinct classes or enumerations, whereby the rate of the tax is varied, that is, it is made more or less, depending upon the relationship, or want of relationship, of the legatee or distributee to the deceased. But this enumeration can only be explained upon the hypothesis that the law intended to impose a greater or less tax upon a legatee or distributee, arising from his degree of relationship or his being a stranger in blood to the deceased. Thus it cannot be doubted that, in assessing the tax, the position of each separate legatee or distributee must be taken into view in order to ascertain the primary rate which the statute establishes. One of two things must arise. When the rate of tax is thus calculated upon the particular attitude to the deceased of each of the legatees or distributees, the sum of the tax must be deducted either from each particular legacy or from the mass of the whole personal estate. If it is deducted from each particular legacy, then it is manifest that the tax imposed will have been levied, not upon the mass of the estate, but upon each particular legatee or beneficiary, since the share of such person will have paid a rate of taxation predicated upon the amount of the legacy and the relationship, or want of relationship, of the particular recipient thereof to the deceased. This being the case, no room would be left for the contention that the tax was imposed on the whole estate. On the other hand, if the whole sum of the taxation on all the shares, calculated on the basis of the relationship of each beneficiary and the amount received, be deducted from the mass of the estate, then, each recipient would pay only a proportion o the amount without reference to his relationship to the decease ■ This would result in imposing the tax on the whole persona estate, and ratably distribute the burden among all the bene ciaries. But to reach this the entire classification, grading t e rate of the tax by the degrees of relationship, would have o be disregarded. The dilemma, therefore, which is involve in the contention that the statute imposes the tax, not on eac legacy or distributive share, but on the whole persona ty, is p. 67this: If the tax is levied and collected according to the classifications in the statute, it is clearly on the legacy or distributive share. If, on the contrary, it is levied on the entire personal estate, then the classifications of the statute must be ignored and the construction be upheld which maintains that the act has classified the rate of tax by the relationship of the beneficiaries to the deceased, and has then disregarded the classification by collecting the tax wholly without reference to such relationship. This construction, besides eliminating a large portion of the text of the act, would do violence to its plain import, which is to make the rate of the tax depend upon the character of the links connecting those taking with the deceased. This is greatly fortified by other portions of the act. At the close of the fifth subdivision of section 29, one of the clauses creating a classification with respect to remote relationship, or want of relationship, to the deceased, it is provided as follows:

e ot a deceased person, forms the subject of the tax. Thus, tor°^ P^.1^611^ and distribution to the legatees, etc., an executhednt?lniS+tratOr °P trUStee is re(luired to Pay “ the amount of y or ax assessed upon such legacy or distributive share,” p. 68and to “make and render a schedule,” etc., in duplicate, “of the amount of such legacy or distributive share, together with the amount of duty which has accrued, or shall accrue thereon,” and the schedule is required to “ contain the names of each and every person entitled to any beneficial interest therein.”

Whatever be the obscurity it is illumined when the light of the previous legislation, which we have already reviewed, is thrown on it. The passing of legacies and distributive shares were the objects taxed under the English legacy act. They were the subjects taxed under the act of Congress of 1797. By the act of 1862, as we have seen, the whole estate was reached by a probate duty, whilst a distinct duty was charged upon legacies and distributive shares in personal property. When the act of 1864 was enacted there was added a succession tax on real estate, modeled, as said by this court and as shown by the act itself, upon the English Succession Duty Act, which treated each particular gift of real estate as a distinct succession, separately liable for the duty laid by the act. The legacy tax and the succession tax were thus co-related and rested upon the same theory; that is, both considered, they created a tax on the passing of each particular gift or distributive share of both the personal and real estate, treated as separate, one from the other, and each as forming a distinct estate subject to taxation. To assume that, when the succession duty was adopted in 1864, the legacy tax, which was also reenacted in that act, lost its character and became a tax levied, not on the passing of the legacies and distributive shares, but upon the whole amount of the estate before passing, would destroy the entire harmony o the system, and lead to a confession that a confusion of thought existed which cannot in reason be admitted. Indeed, it is di ficult to conceive that the act of 1864 contemplated that either the legacy duty or the succession duty which it imposed shou be upon the whole estate, since the tax to be paid by the who e estate was therein distinctly and separately provided for y means of the probate duty. If the tax on the whole estate can be, by implication, inserted, the same reasoning would also im ply that the succession duty must be likewise treated. It wou thus be that the entire act of 1864 would be in force despite i s p. 69repeal and the failure to reenact in the present law either the whole estate or succession duty.

a sue a result, we proceed now to demonstrate. We reuce such portions of section 29 as are essential, putting in p. 70brackets the words found in the act of 1898 under review, which were not contained in the corresponding provisions existing in the act of Î864 :

Observing closely the text, it is apparent that the clause p. 71therein which points out what is taxed is an exact copy of the act of 1864, except the substitution of the “ ten ” for the word “ one.” The subject taxed, therefore, under the present act is the same which was taxed under the act of 1864. This is the equivalent of a mathematical certainty. Coming, then, to the added provision at the end of the first paragraph, it says : “ Where the whole amount of said personal property shall exceed in value,” etc. This, however, creates no new object of taxation, but simply provides that where said personal property, that is, the property previously specified, exceeds a certain amount, a given rate shall be imposed. So, in the further addition, pointing out the progressive feature, the law says, “ Where the amount or value of said property shall exceed the sum of,” etc., thus clearly again referring to the objects of taxation, the property described in the first part of the act, which was identically the same thing described in the act of 1864. The demonstration, therefore, is conclusive that the progressive feature clause added in the present act creates no new subject of taxation ; it simply provides for the progressive rates on the said property mentioned in the opening sentences, which is described exactly as it was in the act of 1864. Now, as the act of 1864 taxed, not the whole estate, but each particular legacy or distributive share, the conclusion cannot be escaped that the present law does the same thing, except that there is added thereto a progressive rate.

The unsoundness of the •construction, that the act measures e ra e o tax by the whole estate, is fully shown by what we e a rea y said, for, as under the act of 1864 the legacies and p. 72distributive shares alone were taxed, and as in reenacting it the exact language was retained, (omitting the separate provisions in the act of 1864, taxing the whole estate by a probate duty and taxing successions,) and as the progressive rates only refer to the object taxed, as provided in the act of 1864, it results that under no reasonable construction can the present act be held to provide for a rate of tax computed on the whole estate. Even, however, if all the previous history be shut out of view, and even if the omission from this act of the whole estate duty which obtained under the act of 1864 be for the moment forgotten, the text of the law, considered alone, would not support the construction that it provides for a tax upon each legacy and distributive share by a rate of tax measured by the whole estate. In order to make this clear we will briefly analyze the text. In doing so, however, we eliminate the attempt made by counsel in argument to show the significance thereof by expressions used in the course of the debate by certain members of the Senate. Maxwell v. Dow, 176 U. 8. 581, and cases there cited.

ae o such items, therefore, separately considered, becomes e purpose of the tax, the whole amount of such personal statute Nearly recognizing that there may be par-an. lstmct interests in each item of personal property, such m, an ei>life * °ne Person will1 a remainder in another, word “it 6 tW° C^auses’ which are linked together by the velon8 th ? whole amount of such personal property,” it dea t e amount referred to is the separate and distinct p. 74sums or items of personal property passing, and not the whole amount of the entire estate, which, as has been shown in considering the previous proposition, the act did not purport to tax as such.

At the risk of repetition, we recur again to a particular feature in the prior legislation, because it very pertinently points out the error which has given rise to the assumption that the “ whole personal estate as aforesaid ” meant in the act of 1864, or means in this act, the whole amount of the personal estate left by the deceased, and not the whole amount of each legacy considered as a separate estate for the purpose of taxation. Attention has been called to the fact that, in accordance with the English system, the act of 1864 engrafted on the provisions of the act of 1862 a succession or real estate inheritance tax. In doing so, it was unequivocally declared in the law that each separate gift of real property was a distinct succession or estate. In other words, the statute itself announced the rule that the whole amount of each estate subject to taxation, under the succession tax, was the whole amount of each separate item of gift treated as an estate for the purpose of the levy and collection of the taxes thereon. How, then, can it be supposed that the act of 1864 contemplated that the section relating to t e legacy should have one meaning, whilst the whole amount o the estate in the sections relating to succession or real estate taxes should have another ? Must it not be considered that t e statute provided for no such discordant and unjust discrimina tion, but that, on the contrary, it harmoniously expressed t e rule obtaining from the beginning, that is, the levy of a legacy tax on personal estate passing by death to each particular ene ficiary treated separately as the amount subject to taxation an the same rule applied to the succession tax by treating ea p. 75item of real estate as the whole amount of an estate passing separately for the purpose of taxation ?

Granting, however, that there is doubt as to the construction, in view of the consequences which must result from adopting the theory that the act taxes each separate legacy by a rate determined, not by the amount of the legacy, but by the amount of the whole personal estate left by the deceased, we should be compelled to solve the doubt against the interpretation relied on. The principle on which such construction rests was thus defended in argument. The tax is on each separate legacy or distributive share, but the rate is measured by the whole estate. In other words, the construction proceeds upon the assumption that Congress intended to tax the separate legacies, not by their own value, but by that of a wholly distinct and separate thing. But this is equivalent to saying that the principle underlying the asserted interpretation is that the house of A, which is only worth one thousand dollars, may be taxed, but that the rate o the tax is to be determined by attributing to A’s house the value of B’s house, which may be worth a hundredfold the amount. The gross inequalities which must inevitably result from t e admission of this theory are readily illustrated. Thus, a person dying, and leaving an estate of $10,500, bequeaths to a hospita ten thousand dollars. The rate of tax would be five per cent, and the amount of tax five hundred dollars. Another person dies at the same time, leaves an estate of one million do ars, and bequeaths ten thousand dollars to the same institution. The rate of tax would be 12^ per cent, and the amount o t tax $1250. It would thus come to pass that the same person, occupying the same relation, and taking in the same charac er, two equal sums from two different persons, would pay in e one case more than twice the tax that he would in the 0 In the arguments of counsel tables are found which show inevitable and profound are the inequalities which the cons ru p. 77tion must produce. Clear as is the demonstration which they make, they only serve to multiply instances afforded by the one example which we have just given.

y e imination, the process of reasoning which we have resor e to m order to demonstrate the unsoundness of the two contentions as to the meaning of the statute renders it unthp^T^ Say anything *n elaboration of the significance of the t a $ a$ emk°died in the third proposition, which is, that nrima^*i1S toe M>acies and distributive shares, the rate being i y etermined by the classifications and being p. 78progressively increased according to the amount of the legacies or shares. Its correctness is at once apparent when the other views are disposed of. As the “ whole amount of such personal property as aforesaid ” relates to the sum of each legacy or distributive share considered separately, it follows that all legacies not exceeding ten thousand dollars are not taxed, and that those above that amount are taxed primarily by the degree of relationship or absence thereof, specified in the five classifications contained in the statute, and that the rate of tax is progressively increased by the amount of each separate legacy or distributive share. This being the correct interpretation of the statute, it follows that the court below erroneously maintained a contrary construction, and, therefore, the tax assessed and collected was for a larger amount than the sum actually due by law.

“ But it is clear that the tax or duty levied by the ac un consideration is not a direct tax within the meaning of ei p. 79these provisions. Instead of that it is plainly an excise tax or duty, authorized by section eight of article one, which vests the power in Congress to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defence and general welfare.

6 e i ustration which was used in Scholey v. Rew as to p. 80an income tax was held not to have been a decision on the question of whether or not an income tax was direct.

The argument now made, therefore, comes to this: Although in the Pollock case the doctrine which the court considered as having been actually decided in Scholey v. Rew was not overruled, nevertheless, because an example which was made use of in the course of the opinion in Scholey v Rew was disregarded, the Pollock case therefore overruled Scholey v. Rew. The issue presented in the Pollock case was whether an income tax was direct within the meaning of the Constitution. The contentions which the case involved were thus presented. On the one han , it was argued that only capitation taxes and taxes on land as such were direct, within the meaning of the Constitution, con sidered as a matter of first impression, and that previous a ju dications had construed the Constitution as having that impor . On the other hand, it was asserted that, in principle, direct taxes, in the constitutional sense, embraced not only taxes on an and capitation taxes, but all burdens laid on real or persona^ property because of its ownership, which were equivalent o a direct tax on such property, and it was affirmed that the pre p. 81vious adjudications of this court had settled nothing to the contrary. The issues which were thus presented in the Pollock case, it will be observed, had been expressly reserved in Scholey n . Pew, where it was said (23 Wall. 346):

that i assert°(i that it was decided in the income tax cases aieanin °Pf t0 ^eym^ne whether a tax be direct within the g o t e Constitution, it must be ascertained whether the vol . cl xxv iii —6 p. 82one upon whom by law the burden of paying it is first cast, can thereafter shift it to another person. If he cannot, the tax would then be direct in the constitutional sense, and, hence, however obvious in other respects it might be a duty, impost or excise, it cannot be levied by the rule of uniformity and must be apportioned. From this assumed premise it is argued that death duties cannot be shifted from the one on whom they are first cast by law, and therefore they are direct taxes requiring apportionment.

0 the first clause of section 8 of article 1 of the p. 84Constitution, which provides “ the duties, imposts and excises shall be uniform throughout the United States.”

On the one side, the proposition is that the command that duties, imposts and excises shall be uniform throughout the United States relates to the inherent and intrinsic character of the tax ; that it contemplates the operation of the tax upon the property of the individual taxpayer, and exacts that when an impost, duty or excise is levied, it shall operate precisely in the same manner upon all individuals ; that is to say, the proposition is that “ uniform throughout the United States ” commands that excises, duties and imposts, when levied, shall be equal and uniform in their operation upon persons and property in the sense of the meaning of the words equal and uniform, as now found jn the constitutions of most of the States of the Union. The contrary construction is this : That the words “uniform throughout the United States” do not relate to the inherent character of the tax as respects its operation on in . viduals, but simply requires that whatever plan or method Con gress adopts for laying the tax in question, the same plan an the same method must be made operative throughout 0 United States ; that is to say, that wherever a subject is taxe anywhere, the same must be taxed everywhere throug ou the United States, and at the same rate. The two contentions then may be summarized by saying that the one asserts a^ the Constitution prohibits the levy of any duty, impos excise which is not intrinsically equal and uniform in its ope p. 85tion upon individuals, and the other that the power of Congress in levying the taxes in question is by the terms of the Constitution restrained only by the requirement that such taxes be geographically uniform.

the question arose whether in its imposition upon erent distillers the uniformity of the tax was preserved, and the court said: r , obie pe ^aWt ^n.0Ur Judgment subject to any constitutional of a 10n • The ^ax ^mPosed upon the distiller is in the nature ereR»1 -^i86’ .and the only limitation upon the power of Conm e imposition of taxes of this character is that they p. 86shall be uniform throughout the United States. The tax here is uniform in its operation ; that is, it is assessed equally upon all manufacturers of spirits, wherever they are. The law does not establish one rule for one distiller and a different rule for another, but the same rule for all alike.”

It is conceded that if the preference clause just re erre p. 87and. the uniform clause have the same meaning, that of course merely a geographical operation was intended. But it is insisted that the two clauses are distinct in import, and that the difference in language of the two manifests the distinct meanings which should be affixed to them. It is apparent that the controversy cannot be disposed of by a mere reference to prior adjudications, since reliance is, by both sides, in effect, placed upon the same decisions. But to determine which view of the cited authorities is the correct one, it will become necessary not only to analyze the facts, which were at issue in the decided cases, but also to elucidate the language of the opinions which have given rise to the conflicting constructions now placed upon such language, by an examination of the subjects to which the language related. As to do this calls for a critical consideration of the provisions of the Constitution referred to in the opinions relied on, we shall, for the moment, put the cases referred to out of mind, and consider the controversy presented as one of original impression. We are, moreover, impelled to this course from the fact that as the word “ uniform,” or the words “ equal and uniform,” are now generally found in state constitutions, and as there contained have been with practical unanimity interpreted by state courts as applying to the intrinsic nature of the tax and its operation upon individuals, if it be that the words uniform throughout the United States,” as contained le Constitution of the United States, have a different significance, the reason for such conclusion should be carefully and accurately stated.

° consfructi°n which requires that effect be given to each word of the Constitution. to t a y^er view, it is to be remembered that the power “tar* c^n^ne<^ section 8 of article 1 is to lay and collect imno«^ UjleS’ ^mPosfs and excises. . . . But all duties, s an excises shall be uniform throughout the United p. 88States.” Thus, the qualification of uniformity is imposed, not upon all taxes which the Constitution authorizes, but only on duties, imposts and excises. The conclusion that inherent equality and uniformity is contemplated involves, therefore, the proposition that the rule of intrinsic uniformity is applied by the Constitution to taxation by means of duties, imposts and excises, and it is not applicable to any other form of taxes. It cannot be doubted that in levying direct taxes, after apportioning the amount among the several States, as provided in clause 4 of section 9 of article 1 of the Constitution, Congress has the power to choose the objects of direct taxation, and to levy the quota as apportioned directly upon the objects so selected. Even then, if the view of inherent uniformity be the true one, none of the taxes so levied would be subjected to such rule, as the requirement only relates to duties, imposts and excises.

rise to the inference that the contrary view by which uny of the provisions of the Constitution is maintained, must e correct one. In fact, it is apparent that if imposts, duties a excises are controlled by the rule of intrinsic uniformi y, methods usually employed at the time of the adoption o p. 89Constitution in all countries in the levy of such taxes would have to be abandoned in this country, and, therefore, whilst nominally having the authority to impose taxes of this character, the power to do so would be virtually denied to Congress.

7 a Parliamentary resolution passed on March 28, 2 1)0«° n caSried iato effect by an ordinance of the same date. Were ' ° of Taxation, 9. Many of these excises pose with reference to the supposed ability of the p. 90party whose property, office, etc., was assessed to pay the same. Thus, in 1747, a duty of excise was imposed upon coaches and other carriages kept for personal use. 20 Geo. II, ch. 10; 7 Stat. 15. In 1756 a duty of excise was imposed upon the possessor of plate over a certain weight. 29 Geo. II, ch. 14; 7 Stat. 661. In 1758 all offices of profit, other than naval and military, were subjected to the payment of duty when the salary exceeded one hundred pounds. 31 Geo. II 1257, 8 Stat. 212, ch. 22. In 1777 a duty was imposed upon employers of coachmen and other men servants. 17 Geo. Ill, ch. 39 ; 13 Stat. 103. In 1779 a duty was imposed, not upon all forms of locomotion, but upon traveling by post, the usual method of locomotion among the wealthier classes. 19 Geo. Ill, ch. 51; 13 Stat. 414. In 1784 a duty was laid, not uniformly with respect to all horses kept by a person, but in respect to horses kept for the saddle or driving in carriages. 24 Geo. Ill, ch. 31; 14 Stat. 496.

The Massachusetts constitution of 1780 and that o 0 New Hampshire merely required that the assessments o ra & and taxes should be proportional and reasonable an wi view to equality, but there was no such qualification expres as to the authority conferred “to impose and levy reason duties and excises upon any produce, goods, wares, mere p. 91and commodities whatsoever, brought into, produced, manufactured or being within the same.”

four pence was laid upon free negroes and mulattoes from 16 to 50 years o age, while the tax upon free white men was upon those neither lame or abled, and who were between 21 to 50 years of age, while the tax was o e ten shillings per head. And a tax of one per cent was laid on the pro faculties and professions, clergymen, schoolmasters and schoo mis r p. 93specific import duties, by which particular specific rates are imposed on enumerated articles, without reference to their value. It is manifest that all such duties are void, if intrinsic equality and uniformity be the rule, and yet in all the great controversies which have arisen over the policy of impost duties generally, and particularly as to the economic wisdom of specific duties, never has it been contended that the power to impose them did not exist because of the uniformity clause of the Constitution. So, also, mention may be made of the common form of the excises on distilled spirits with the tax per gallon without reference to the value thereof.

§ a ter the adoption of the Constitution, when by p. 94lapse of time an erroneous conception as to the meaning of the Constitution had arisen, for the examples to which we have just referred are but types of many forms of taxation by way of duties, imposts and excises which were enacted without question from the very beginning, and have continued in an unbroken line to the present time, sanctioned by the founders of our institutions and approved in practical execution by all the illustrious men who have directed the public destinies of the nation. Excise taxes were largely used during the administration of President Washington, and again during and after the war of 1812. It may properly be said of these excises that none of them were uniform according to the principles now contended for, yet no constitutional question in this regard was ever raised about them. A partial list of some of the earlier acts is inserted in the margin.1 We do not cite from the later revenue acts, p. 95because of the numerous and familiar instances of such legislation which abound therein.

Though this resolution failed of passage, a repor o mittee of the whole was agreed to on the same day, in p. 97of a resolution recommended to the several States to levy for the use of the United States a duty of 5 per cent upon imports, with certain exceptions, and a duty of 5 per cent upon all prizes and prize goods. As late as December, 1782, however, some of the States had failed to comply with this resolution. 5 Ell. Deb. 13.

The reasons advanced by those who opposed the various re lutions to which we have referred are, if anything, more p. 99give than are the matters to which we have called attention. Those reasons were predicated upon the inequality among the States which might arise from the granting to Congress the power to lay duties, imposts and excises. That is, if a particular article was levied on generally throughout the various States by an excise or duty, as a greater quantity of that article might be found in one State than in other States, it was asserted the burden would be unequal because the former State would pay a greater proportion of the tax. This form of objection is well illustrated by what was said by Mr. Rutledge and Mr. Lee against the grant of power to Congress to lay duties or excises, to operate generally throughout the United States. We quote from 5 Ell. Deb. p. 34, as follows:

’ earing hardest upon the most commercial States, p. 100and so would pr^ss petwiarly hard upon that State which draws its chief supppft frpm commerce.” 1 El. Deb. 101. And the nature of this ob j^tio^caused it to come to pass that in the subsequei^fcaisq^ion^ln Congress, the claim that it was essential to (^©ferA^onZlongross the authority to lay duties, imposts and ex^ise^to beXjniform throughout the United States, became association tire discussion with the asserted necessity that Congress^ sMhld have the power to establish uniform regulations oi commerce to prevent the discrimination resulting from the laying of duties, imposts and excises by the respective States. 1 lb. 112. The association of the two subjects evolved by their natural relation is well shown by a resolution of Mr. Madison, introduced in the Virginia house of delegates in 1784, (lb. Ill,) “ wherein it was proposed that the delegates from the State of Virginia should be instructed to propose in Congress a recommendation to the States in Union, to authorize that assembly to regulate their trade,” on principles and under qualifications stated in the following paragraphs:

By another section of the Paterson plan, it was provi e a ■whenever requisitions upon the States should be necessary, should be made by the rule of numbers and not by va ue land, as under the Confederation; and the Congress was o authorized “ to devise and pass acts ” directing and aut onz^ the collection of requisitions when not complied wit . thus seen that both of the plans referred to made no provi for uniformity of taxation in the sense contended or opponents of the tax now under consideration. The of detail, in the first section of article VII of their ra proposed constitution, reported the two clauses o ( Mr. Pinckney first quoted, substituting the wo 0 ° p. 103for the word “all” before the word “nations.” 5 Ell. Deb. 378.

at there be inserted, after the fourth clause of the seventh p. 104section, ‘ nor shall any regulation of commerce or revenue giu preference to the ports of one State over those ofanother, or oblige vessels bound to or from any State to enter, clear or pay duties, in another; and all tonnage duties, imposts and excises, laid by the legislature, shall be uniform throughout the United States'”

On August 31, 1797, the report of the committee was ac upon as follows (5 Ell. Deb. 502): The provision, or s any regulation of commerce or revenue give preference o ports of one State over those of another,” was adopte nem’ After discussion the clause, “ or oblige vessels boun to or p. 105any State to enter, clear or pay duties in another,” was agreed to. Quoting from the debates at page 503:

0 t e sixth clause of section 7 of article 1, and the p. 106other is a part of the first clause of section 8 of article 1. By the result then of an analysis of the history of the adoption of the Constitution it becomes plain that the words “uniform throughout the United States” do not signify an intrinsic but simply a geographical uniformity. And it also results that the assertion to which we at the outset referred, that the decision in the Head Money cases, holding that the word uniform must be interpreted in a geographical sense, was not authoritative, because that case in reality solely involved the clause of the Constitution forbidding preferences between ports, is shown to be unsound, since the preference clause of the Constitution and the uniformity clause were, in effect, in framing the Constitution, treated, as respected their operation, as one and the same thing, and embodied the same conception.

Having disposed of the question of uniformity, we are nex. brought to consider certain contentions which relate to subject. It is argued that even although it be conce e p. 107the uniformity required by the Constitution is only a geographical one, the particular law in question does not fulfill the requirements of even geographical uniformity, since it does not apply to the District of Columbia. We think this contention is without merit.

is yet further asserted that the tax does not fulfill the requirements of geographical uniformity, for the following reaof11 i. $ th6 Pr^mary rafe of taxation depends upon the degree is at10nsbip or want of relationship to a deceased person, it argue^ cannot Opera^e geographical uniformity, asmuc as testamentary and intestacy laws may differ in every p. 108State. It is certain that the same degree of relationship or want of relationship to the deceased, wherever existing, is levied on at the same rate throughout the United States. The tax is hence uniform throughout the United States, despite the fact that different conditions among the States may obtain as to the objects upon which the tax is levied. The proposition in substance assumes that the objects taxed by duties, imposts and excises must be found in uniform quantities and conditions in the respective States, otherwise the tax levied on them will not be uniform throughout the United States. But what the Constitution commands is the imposition of a tax by the rule of geographical uniformity, not that in order to levy such a tax objects must be selected which exist uniformly in the several States. Indeed, the contention was substantially disposed of in the License Tax cases, 5 Wall. 472, previously referred to. It was there urged that, as the several States had the right to forbid the carrying on of the liquor traffic, therefore Congress had no power to license such traffic, because it would interfere with the authority of the State. It was held that the license was validly imposed, that it did not interfere with the power of the States to prevent the liquor traffic, because in a State where such traffic was forbidden the license would be inoperative; but in the States where such traffic was allowed, the license would be effective. The argument, however, is additionally fully answered by the review which we have made of the origin and meaning of the expression “ uniform throughout the United States.” From that review it appears that the very objection upon which the proposition now advanced must rest was urged in the Continental Congress as the reason why the levy of uniform duties, imposts and excises throughout the United States should not be authorized. T is is shown by the objection of Mr. Rutledge and the suggestion of Mr. Lee. It is further shown by the protest of Rhode s land, and the reasons advanced why a duty on salt shoul no be levied. But it was seen that if it were required, not on y that the duties, imposts and excises should be uniform t out the United States, but that in imposing them objects s o be selected existing in equal quantity in the several States, p. 109grant of power to levy duties, imposts and excises would be a failure. In the convention which framed the Constitution the same argument was used without success, and, as we have seen, the only ground upon which the striking out of the words “ and equal ” after the word “ uniform,” in the adoption of the clause as now found in the Constitution, can be reasonably explained, is that it was done to prevent the implication that the duties, imposts and excises which were to be uniform throughout the United States were to be placed upon rights equally existing in the several States. To now adopt the proposition relied on would be virtually, then, to nullify the action of the convention, and would relegate the taxing power of Congress to the impotent condition in which it was during the Confederation.

The complainants, who are appellants here, filed their bill to enjoin the executrix of their father’s estate from paying the leg-levied by sections 29 and 30 of the War Revenue Act dpf d * 4 ^^tor °f internal revenue was also made a en an , and an injunction was asked against him to prevent wbrh °r a^emPfinS to collect the taxes in question, ec 5. ’1 asserked, be was about to enforce against the exinb J’ W WaS averred, would pay unless by the writ of and a« b°n a $ WaS forbidden to do so. As heirs of their father werp pn+'+i6 bis estate, the complainants asserted they taxpq wh' l ° Prevent the executrix from making payment of relied o T 7ere ^c^^^utional and hence void. The reasons stitution nf taxing law was repugnant to the Conand not a 5 ®^ates were that the taxes were direct ppor toned, were not uniform and were levied on p. 112objects beyond the scope of the authority of Congress. The bill was demurred to as not stating ground for relief. The demurrers were sustained, and from a decree dismissing the suit this appeal is prosecuted.