*1 present we do feel it in the case than the facts necessary at bat In the case discuss them. any agreement part present fails to intent show Purdy lien. of Nelson or to create a portion judgment appealed is, there- reversed. fore, J., Main, Steinert, JJ., con-
Beals, Tolman, O. cur. September 8,
[No. 1933.] 24491. En Banc. Respondents, al., M. Culliton et William Appellants. H. al., Chase et Samuel Respondents, al., et H. v. Samuel Inc. McKale's, Appellants. al., Chase et (2d) 1Reported P. in 25 *2 Attorney Hanna, Assist General and John W. appellant, on a tax contended, alia, inter
ant,
Opinion
property:
on
re
is not
tax
(dissenting opinion),
Atl.
77 N. H.
93
611,
Justices
720;
167 Ark.
271 S. W.
311;
557,
v. Ahrens,
Sims
Hattiesburg Grocery
88
34,
v.
126 Miss.
Robertson,
Co.
Knox
25 A. L.
ex rel.
v.
4,
748;
Gulf,
South.
R.
State
Trefry
689;
104
Co.,
70,
M. & N. R.
138 Miss.
South.
A. 1917
N. E.
L. R.
522, 116
904,
v.
227 Mass.
Putman,
Ludlow-Sayre
Wollbrinck,
v.
275
F, 806;
Co.
Wire
Dubuque Northwestern
339,
196;
Mo.
205 S. W.
v.
Life
v.
9;
Insurance
29 Iowa
Lumber Co.
Co.,
Standard
112
Lame <& amicus alia, and not a tax is an excise tax proposed Taxation Cooley (4th ed.), §§ 1743, tax: 142; 1559; 26 R. L. C. J. 1749-1751; (Taxation) C. Norman, Featherstone v. 58; E. 170 Ga. S. Fitch v. Tax Commission, Wisconsin Wis. Motorcycle S., Indian Co. v. U. N. 283 U. S. 37; W. Moon v. Wisconsin Tax State ex rel. Co. Commis 570; *3 Tre sion, 166 N. 470; N. 165 287, 163 639, Wis. W. W. fry v. Putman, A. 227 Mass. 116 N. E. R. 522, 904, L. Gallet, v. 806; 51 10 P. 1917F, Ida. 619, Diefendorf 309; Taxation follow (2d) Black, ed.), (3rd § cases hold that an income is ing tax constitutional: Standard Lumber Co. v. Pierce, 112 228 Pac. 314, Ore. Ludlow-Sayre Wollbrinck, v. Wire Co. 812; 275 Mo. Waring Mayor v. Savannah, 196; 205 S. 339, W. Glasgow v. Rouse, v. Sims 60 93; Ga. 43 Mo. 479; Hattiesburg Ahrens, 167 Ark. 720; 271 S. W. 557, Grocery v. Robertson, Co. 126 88 34, 4, Miss. South. Knox Gulf, ex rel. v. M. & N. R. State 25 748; A. L. R. Co., v. Savannah Hart 138 104 70, 689; Miss. South.
ridge, 8 Williams, Shields v. 159 23; Ga. Tenn. 349, Maxwell, Clark v. 19 S. 197 N. (2d) 261; 604, W. C. Young Athletic Club, v. Illinois 190; 150 E. 310 S. Stanley Gates, v. Ill. E. A. L. R. 75, 141 369, 985; N. 30 179 19 1000. The of au 886, weight Ark. S. W. (2d) thority is-that income is “property” pur Eliasberg Grimes, Bros. Mercantile Co. v. poses: 204 Hattiesburg Ala. 86 492, 11 A. L. R. 300; South. 56, 366 supra;
Grocery
Knox v.
Robertson,
v.
State ex rel.
Co.
supra;.
supra;
Ahrens,
v.
Co.,
M. & N. R.
Sims
Gulf,
supra;
Young
rel.
ex
Club,
v. Illinois Athletic
State
Nygaard,
Bundy
v.
A.
L. R.
87,
163
N. W.
307, 158
Wis.
Co.,
v.
R.
1917E, 563; Brushaber
U. P.
1;
240 U.
S.
Tax
v. Wisconsin
ex rel. Manitowoc Gas Co.
State
Stony
Brook
Commission,
152
848;
161
N.
111,
Wis.
W.
Corp.
Co.,
&
R. R.
R. R.
v. Bostоn Maine
260 Mass.
if
L. R. 700. Even
607,
157 N. E.
53 A.
379,
uniformity
requirement
held to be
tbe
property,
supra; Ludlow-Sayre
Maxwell,
v.
Clark
not violated:
supra;
Wells,
v.
Alderman
Wollbrinck,
Wire Co. v.
864;
(N. S.)
27 L. R. A.
781,
85
C.
67 S. E.
507,
S.
Fourchy,
New Orleans v.
910;
La. An.
30
Diefendorf
supra;
Reilly,
v.
Gallet,
v.
Tekoa
91
202,
47 Wash.
ex
Frear,
rel. Bolens v.
State
456,
Wis.
769;
Pac.
Ann.
164,
1913A, 1147,
N.
135 N.
Cas.
134 W.
W.
673,
569;
Taxation,
L. R. A. 1915B,
Cooley,
§1760.
Laughlin
An
E. W.
Meakim,
&
Grinstead, Laube,
curiae, contended,
Brodie,
&
amici
derson, and Yantis
ex
State
alia,
inter
valid:
presumptively
that tbe law
v.
Howell,
920;
rel. Mullen
181 Pac.
167,
107 Wash.
Superior
Court,
rel. Carroll v.
54,
ex
State
Wash.
Publishing
Monson,
Co. v.
Record
226;
193 Pac.
limita
is a
367
Pennsylvania,
Gap R. R.
v.
Co.
power: Bell’s
lative
Savings
Magoun
&
v. Illinois Trust
134
232;
U. S.
Michigan
Powers,
R. v.
Central
Bank,
283;
170
U. S.
Wells,
Alderman
v.
67
507,
85
C.
245;
201 U. S.
S.
Ludlow-Sayre
Wire
R. A.
781,
864;
S. E.
27 L.
(N. S.)
v.
State
Wollbrinck,
Co.
196;
275 Mo.
205 W.
339,
S.
ex
Frear,
rel. Bolens v.
673,
148
134 N.
456,
Wis.
W.
1915B,
135
R. A.
N.
Cas.
L.
164,
1913A, 1147,
W.
Ann.
Lumber
v.
Pierce,
Standard
Co.
314,
112
569;
Ore.
supra; v. Tax Co. Commis Crescent 124 E. ex rel. Bolens 761; 129 C. S. State sion, 480, S. supra; 619, 51 Ida. v. Gallet, Frear, v. Diefendorf supra. (2d) Pierce, Lumber v. 309; 10 P. Standard Co. reviewable for taxation is not Classification arbitrary: Mag palpably Illinois oun v. conrts unless Gap supra; Savings R. R. v. Bank, Bell’s Co. & Trust supra; Keeney Pennsylvania, 222 U. York, v. New S. 322; 229 U. S. Steb Fuller, Tel. Co. v. 525; Citizens Riley, R. 137, 1454; 268 44 A. L. Ohio v. U. S. bins Conway, 281 v. 146; v. U. Jackson Commis Oil Co. S. A. L. R. 1464. Courts have 283 S. 73 sioners, 527, U. uniformly graduated income under sustained taxes requiring uniformity provisions of tax constitutional Pierce, ation Lumber Co. v. as to class: Standard supra; 43; Del. 108 Atl. Lud Pinder, 416, v. State supra; low-Sayre ex rel. v. Wollbrinck, Wire Co. State supra; Featherstone v. Co., Knox v. M. & N. R. Gulf, supra. Norman,
Harvey and R. amici Maxwell, W. McCormack W. income tax contеnded that excise curiae, tax. W. curiae, and amicus Charles Cross,
A. Emerson attorney Washington for State curiae, Hall, amicus judgment Grange, re- should be contended that versed. Thorgrimson Barto Lundm, Turner and &
Preston,
respondents
con
McKale’s, Inc.,
al.,
et
Devin,
&
graduated feature of the
alia,
inter
that the
tended,
provision of the fourteenth
violative
act
requiring taxa
constitution
to the state
amendment
Aberdeen
to be uniform:
of each class
tion
Savings
Chase,
351,
157 Wash.
v.
& Loan Association
L. R.
Bank
232;
71 A.
Pac.
290 Pac.
County,
Spokane
22 P.
173 Wash.
v.
Fairfield
Massachusetts,
MacCallen Co.
279 U.
646;
S.
(2d)
In
Northwestern Mutual
R.
866;
A. L.
Life
County,
sion,
166
N.
639,
163
165 N.
287,
470;
Wis.
W.
W.
Wells,
Alderman
v.
85
C.
67
E. 781,
S.
S.
27 L.
507,
Norman,
v.
Featherstone
R. A. (N.S.) 864;
170
Ga.
Stanley
v.
Gates, 179
153
370,
58;
S. E.
Ark.
19
886,
Ahrens,
v.
Sims
1000;
S. W. (2d)
370
ings & Loan Association v. Chase opin (dissenting 697, 71 ion), 536, 157 289 Pac. 290 Pac. 351, Case, v. ex rel. Nettleton State 39 Wash. 232; A. L. R. 109 Am. 1 R. A. St. 177, 554, (N. S.) 152, 81 Pac. L. Lindsey Derbyshire, v. ex rel. State 79 Wash. 874; Gorman, v. 232, 41 State 40 Minn. 540; 140 Pac. 227, jo Fat v. Pfister, 117 Cal. 2 L. 948, 701; N. R. A. W. County Fairbank, v. Cook 222 Ill. 1012; Pac. 48 83, Miller, v. Hauser 22, Mont. 895; E. 578, 78 N. Co., Malin v. LaMoure 145 N. 140, 27 N. D. 197; Pac. 1916C, 207; Ann. 50 L. R. A. Cas. (N. S.) W. Chapman County, v. Ada 259; 48 Ida. Pac. Berryman Bowers, v. 361. A tax 31 Ariz. Pac. is a tax on income from bonds government State, the bonds themselves: McCulloch 17 U. S. *7 Miller v. 316; Weston v. Charleston, 449; 27 S. U. Mutual Milwaukee, 272 U. Northwestern 713; S. Life MacCallen Wisconsin, Insurance v.Co. 136; 275 U. S. supra; Bunn, v. Massachusetts, Willcuts Co. v. 282 Motorcycle S., v. Indian Co. U. 283 U. 216; U. S. S. greater strength no 570. An measure has initiative other any legislation: than attaches dignity Richardson, State ex rel. v. 48 85 309, 225, Pac. Ore. Turnidge Thompson, 89 v. A. Ore. 362; 8 L. R. (N. S.) Supervisors, Board Galvin v. 281; 175 Pac. 637, Zinman, v. Wallace 200 195 235 Pac. Cal. 686, 450; Cal. rel. Lash State ex L. A. 1341; 254 62 R. 585, 946, Pac. People ley Pro v. Becker, v. 1017; 235 (Mo.) S. W. Berry rel. v. vost, ex 129; State 199, 55 Colo. 134 Pac. Superior Court, 92 Pac. 92. The invalid 16, 159 remainder: inseparable of the act part Dorchy Williams v. Kansas, v. Stand 286; 264 U. S. Hill Co., Wallace, ard v. Oil 259 44. U. S. 235; 278 U. S. M. and J. T. Trul- E. F. Mathewson Clark, Newman% linger, al., inter Culliton et contended, respondents
371 alia, that a tax on income is a tax: Polloсk v. Co., Farmers’ Loan & Trust 157 U. S. 158 U. S. 429, Opinions 601; In 220 Mass. 108 N. Justices, 613, re E. 570; Eaton, & Commonwealth, Crane Co. v. Pike 237 130 E. 523, 99; Mass. N. Del. Pinder, State 30 Eliasberg 416, 43; 108 Atl. Bros. Co. v. Mercantile 86 11 Grimes, 56, 204 Ala. South. A. 492, 300; L. R. Breslin, Mercantile Co. v. Ala. Lilienthal South. 69; Bachrach v. 349 Ill. 182 N. Nelson, E. Opinion 909; re 81 N. Justices, H. 120 Atl. George Donworth, Charles Donworth, Allen, T. Rupp Ramsey, Froude, Hilen & Askren, McMicken, Schweppe, & Peters, Evans & McLaren, amici judgment contended curiae, should be af- firmed. Alleging that the state income tax law Holcomb, J
(initiative chap. p. [Rem. No. 69, 5, Laws Sup., seq.}) § 11200-1 re- unconstitutional, et spondents instituted two which were consoli- actions, appeal, against dated for trial and the members injunction permanent state tax commission to secure a restraining enforcing defendants from men- act The tioned. trial was of the view that chal- court lenged against uniformity require- offended act ment fourteenth amendment to con- the state and was therefore stitution, void. demurrers to *8 complaints a were and decree en- overruled, permanently restraining tered of enforcement appeal. act, from comes which decree The fourteenth amendment to the state constitution reads: power suspended,
“The taxation shall never be away. or contracted All be surrendered taxes shall upon uniform the same class of within authority levying tax and territorial limits only. public purposes collected for shall be levied and ‘property’ herein and in- The word as used shall mean everything, tangible intangible, sub- clude whether or ject class: ownership. All real estate shall constitute one to may Legislature mines Provided, tax That mineral to and and lands devoted reforesta- resources by yield a tax or an ad valorem tax at such tion either by may property as the fix, rate or both. Such as by Legislature may general provide laws shall be exempt Property of the United States taxation. districts and other state, counties, and of the school by prop- municipal corporations, and credits secured erty actually exceeding in this in value state, taxed exempt property, from taxa- the value tion. such shall power, appropri- Legislature shall have legislation, exempt personal property to the ate amount ($300) for head of three hundred dollars each family and of a liable to assessment taxation under provisions the in- of the laws this state ’’ owner. dividual is the actual bona fide provides: tax law The income ‘‘ Existing primarily of taxation, methods Section 1. inadequate, inequi- holdings, are based on table and economically unsound. Present conditions subject point which taxation, need of new matter Earnings ability pay. be based on the should ability. given period fair measure of such for a are a Washington, people therefore, state of “The exercising supreme power funda- herein their hereby right, purpose tax all declare their mental not as as such, annual incomes within the state property. paid assessed, levied, collected “There shall be pro- annually, net income hereinafter all as residing by every person the state within vided, Washington representative personal in case or his by every non-resident the state, death; derived from located income as is such except herein- state, transacted within business ” Sup., exempted. . Rem. §11200-1. . . after
373 system graduated adopted by in- The rates imposes upon taxpayer tax- come tax law rate progresses larger ation that and becomes with increase in the his taxable income. amount Respondents the constitu insist under that, 'property’ tional definition, word as used herein “The tangible everything, shall mean and include whether intangible, subject ownership,” to a tax on income property derived from is a tax on thе which the income is derived, therefore the method adopted by classification law violative income tax requirements state constitution “all prop taxes shall be uniform the same class of ’’ erty. property, Unless the tax constitutes a tax on income uniformity clause of the state constitution is not violated. If income taxes
“ . . are . to be deemed a tax, consti- applicable tutional limitations taxes must applied. they If ... are excise such taxes, applicable.” Cooley, limitations are not Taxation. (4th ed.), §1743. passed
The fact that the
tax law
was
controlling importance,
an
measure
no
initiative
nor
amendment
can
be likened
the constitu
provides
tion. The constitution
the means, methods
processes
for its own amendment.
replaced
7 of our
Amendment
art.
constitu-
adopted by
people by
proper
tion, was
method
by
passed
people
in 1930. The income
law
any subject
in 1932. All laws on
whatever, enacted
people
legislature,
governed
either the
or the
must be
provisions
of the constitution in force
at
people
legislative capacity
time. “The
their
are
superior to
not, however,
written
con-
fixed
”
Superior
Berry
Court,
rel.
stitution.
State ex
levying public herein shall for levied and collected the tax and shall be ‘property’ purposes only. used The word everything, whether mean and include subject tangible intangible, ownership.” or question clearly public is one
The initiative act revenue. defy certainly ingenuity of the most
It would compre- lexicographer profound a more to formulate “everything, “property.” It is hensive definition ownership.” subject tangible intangible, whether amend- under fourteenth is either our Income any can true, If that is one or no one owns it. ment, power to or obtain who seize use our incomes has by being no other classifica- foul There them means. personal property but real and tions our constitution necessarily intangible property, fall incomes category intangible property. No more within compelling language positive, precise could have of our four- been used than was used those words It teenth amendment. needs no technical construction overwhelming mean. to tell what those words The authority judicial prop- weight is that “income” erty upon upon property. income and a tax аny
None the decisions other states have bearing upon pecu- our us, the law before because of liarly forceful constitutional definition and the differ- ence in their constitutional authorization or restriction. ex rel. v. Frear, State Bolens 148 Wis. N. Ann. Cas. 1913A L. A. W. R. 1915B apparently tax act enacted in 1911 was set with out in tbe and is almost identical full court unimportant our own income tax act. There are some necessary differences mention. constitution previously had been in 1908. It Wisconsin amended provided had that: “The of taxation shall uniform, rule be and taxes legislature
shall be levied such as the prescribe,” shall provision
which was amended the addition of the following words: may imposed privileges,
“Taxes also be on incomes, occupations, may graduated be taxes progressive vided.” exemptions may pro- and reasonable *11 adoption Previous to this the su- amendment, preme court of Wisconsin had held an income tax law passing upon unconstitutional. In the income tax act supreme among 1911, the court that other state, things, said: hardly plainer express “Words could be idea that clearly appears
than the words that taxation of recognized Prom used. them it property and taxation of incomes are separate things as two in distinct may lawfully state constitution; both levied, says levied, because the constitution so. . . . people ‘property’ of Wisconsin have said that means thing, one and ‘income’ in another; means other words, property taxation that income is as the taxation, in words used the constitution are of Wisconsin.” different from the situation here. How We have no provision authorizing taxation constitutional of in- thing as another. come one as haveWe ‘‘ only provision the constitutional that shall everything, tangible mean and include whether or in- tangible, subject ownership.” Until we have such a
376 people, as of the the hands amendment, constitutional enacting legislature, are tied. laws, well as the definitely an state that decided has been It ques set the is which should tax, income tax Savings v. Loan Assn. & at rest here. Aberdeen tion L. R. 232. A. 289 Pac. Chase, majority though Even some us dissented dissenting opinions that case decision, show opinion thoroughly ma of the considered, and the jority govern. even a dissent cases, should future by ing justice ma the decision be bound should authoritatively jority overruled until and unless higher supreme tribunal, such as reversed some States. court United excise income tax an It is asserted that state cited to sustain That not correct. cases tax. corporate tax all involved franchise the assertions like. laws placed by appellants upon reliance is a recent
Great supreme decision the Idaho court Diefendorf (2d) sustaining in- Gallet, Idaho P. an come tax statute of which decision con- state, also tains exhaustive discussion the authorities question of income taxes. That decision involved interpretation of three sections of the constitution of Idaho and of the income statute declared property. not be should taxed peculiar provisions constitutional
One *12 prescribing 3, Idaho is art. sec. word that, “The ‘property’ as herein used shall be defined and classified by provision that, law.” Another constitutional upon uniform “All taxes shall be the same class of subjects providing limits,” within the territorial exemptions. for the That court as held, allowance provision, similar we, would under a constitutional lawmaking power absolutely the was de- that free to tbe constitution is be taxed. Our fine contrary. by the decision attention
Our has also been called to a supreme Board court, Montana O’Connell State (Mont.) Equalization, (2d) in which that 25 P. by majority in two, that an of three to held, court was valid. Stress come tax law enacted Montana upon law that fact the was laid case the that copied had theretofore Idaho which was from the act, supreme that state, construed the court been judicial necessarily and the that law followed adopted interpretation Montana statute. in the were majority respect court, it seems due With dissenting opinions, pointed us, out in obvious to unique majority sight provisions of of the that the lost by that itself. Idaho constitution as stated court “unique” provision Had we same constitutional probably follow decision Idaho, as has we should upon validity law of that court before us.
After in the the decision this court Aberdeen Sav- Assn, supra, deciding ings & Loan case, that income purposes people was for the taxation, supra, adopted made amendment, the fourteenth part it a of the state. fundamental law argued also that, It is under the recent decision of court in Tel. & v. Seattle, Tel. Co. Pacific (2d) holding 21 P. valid certain fees utility company exacted from these case, solely are excise taxes. That decision correct be cause such exactions are taxes. exсise Such taxes were long ago defined as consump-
“Taxes laid sale, manufacture, country, upon tion to privileges.” commodities within licenses pursue occupations upon corporate certain Cooley on Constitutional Limitations *13 (7th (Quoted ed.), dissenting opinion 680. in in Aber- Sewings supra.) deen & Chase, Loan Assn. v. question The taxes here in can in no sense be said pursue occupations, to be for or licenses to certain upon corporate privileges, or manu- business or consumption facture, sale or of commodities within state. prescribes
Our fourteenth amendment that all upon taxes shall be uniform the same class of authority levying within the territorial limits of the argument tax, etc. It no needs to demonstrate wholly lacking that the income taxes here levied are uniformity. sought graduated It is to sustain the features of by analogy graduated income tax to a tax. inheritance really The inheritance tax is not a tax at all. It is impost annually, laid but one and not time, right tax. The or in devisees, inheritance, cases of right right. of heirs law, at is not a natural take, only grants right. It exists because the state After having granted right, may impose the state as a upon right condition exercise state percеntage proportion shall receive a certain or there percentage proportion may graduated of. This may large may impose. be as as the state see to fit This court has so held two cases: Clark, State v. 30 Wash. 71 Pac. 20, and re Ellis’ Estate, (2d) 14 P. 37. There is no portion be Wash. similitude passing tween and the of an incomes estate one the death of another. No well considered decision has ever so held. sight principle do not lose of the well established
We always of which the author this has state, pronounced every advocate, been a intendment brought validity should be to bear in favor of the of a any ap- if or enactment and reasonable statute doubt
.379 validity in favor be resolved should pears rel. held. State ex times many have as we law, P. Martin, (2d) Hamilton *14 condition financial the deplorable do we disregard Nor necessity divisions taxing and its of the state conditions, As to such revenues. additional raising of of the the inconvenience suffer that we is better disregard that we than revenues of such loss present for the of the constitution restrictions emphatic to frame be may possible It relief. sake of temporary uni all incomes assess law which will an income tax constitution, which, with our comply formly consider need not before us and we is not now course, it. when the proponents obvious that, is perfectly
It our lost act, they sight framed the initiative No. 69 amendment. definition in the fourteenth constitutional all an- to tax purpose in the law a The declaration cannot “property,” incomes as such and not as nual It also clear override the constitution. courts, and the legislature, when
people legislating, restrict- limitations, be bound by are and should of the constitution. definitions tions, prohibitions It fundamental law of the state. is the herein the decree of the trial stated,
For the reasons court is affirmed. concurs.
Maiu, J., this the views of think (concurring) J. Mitchell, —I Hol- Judge by written in the opinion case expressed comb are correct. the law by appear raised intended to
The taxes be incomes and, assuming and fair, to be reasonable be- rates that taxed, system graduated should in- income of taxable as the amount come greater is a act, good for in such as is creases, provided question, one. That The sole is not here. however, question validity here of the act under relates to the the fourteenth amendment the state constitution. fully history speak
I wish to more respect amendment act, еach with sixty-three In 1929, other. financial associations from brought against different sections the state an action enjoin the the members of the state tax commission to chapter p. pro- enforcement Laws of 1929, viding for a tax measured banks and corporations. financial The action was dismissed upon sustaining general the trial court demurrer to complaint. reversing judgment June, the trial court in (Aberdeen Savings & Loan Assn. Chase, 232), *15 289 Pac. 290 Pac. 71 A. L. R. Wash. this court said: question of whether or not the act which we “The considering upon appellants imposes a tax are now their, privilege exercising corporate powers
for the within this purports or on the other
state, whether, hand, ,upon property, impose directly to to a tax upon by upon appellants net wit, which upon the income earned computed, amount of due is to be or
the occupation appellants the with which are en- (Italics mine.) engaged, important.” upon property, was that it was a tax The decision upon to net income that the act wit, earned, question to the violated the fourteenth amendment guaranteeing equal pro- United States Constitution the holding rendered which it was said tection of law, the subject unnecessary any of the uni- discussion of the fоrmity provision of state constitution. of taxation the judges; judges six three other dis- The decision was rehearing senting opinions. Thereafter, in two 391), unanimously (157 said: it was case clarify “In order to situation, court now opinions states above cited rendered were determining questions presented with a view to majority the cases at . . . ; bar that the opinion legislation court was of the that the therein attacked be held, under su- must decisions preme attempt States, court of the United to estab- property corporation lish a chise taw.” and not an excise or fran- (Italics mine.) general special publicity Amidst the of the fact prop- that this had court thus decided that income is erty, the fourteenth amendment to the state constitu- adopted following general tion was at the election November, 1930. That amendment struck certain out including sections, § of article VII of the constitu- provided legislature tion, which section that “the shall provide by equal law a uniform and rate of assessment according and taxation on all in the state, ’’ money, its value in etc. it was carried into However, provides: amendment “All taxes be shall uniform same class authority within the territorial limits of the levying tax and shall levied and collected for public purposes only. ‘property’ The word as used everything,
herein shall mean and include whether tangible intangible, subject ownership.” And if asked whether income is now, within meaning of the fourteenth amendment to the state perfect given by quot constitution, a answer could be ing language ‘prop of the amendment —“The word *16 erty’ everything, as used herein shall mean include tangible subject intangible, ownership.” whether to Savings in Thus, this court, Aberdeen & Loan Assn. 289 Pac. 290 Pac. Chase, 536, 697, A. L. R. decided for the that purposes people, by of taxation, and the a constitu tional amendment, thereafter decided likewise. passed
In this at situation, the income tax law was general election in as No. initiative measure Confessedly, upon the act face of its fixes rates greater taxation become of the with increase of income. The amount taxable amendment to the con- provides, stitution shall be taxes however, “that all upon property,” etc. This same class uniform principle uniformity preserved in taxation has been appears all from at times our article constitution, § of the and from fourteenth VII, constitution, might amend- amendment. It under the reasonable, be provide purposes, ment, horses that, to taxation put in rate of different a class and bear a taxation reforestation; but not so of lands devoted compared with with a band of one thousand horses horses, nor one acre another band thousand two compared with other'two land devoted to reforestation of land devoted reforestation. acres speaks of the same The constitutional amendment pays property. a on a $2,000 One who class of precisely pays the same class taxable income a tax on pays $1,000 taxable a tax as one who higher progressively at and to tax the one income, positively clause violates other than other rate that all shall be amendment, taxes uniform property. same class prescribe of the act terms fact that some The penalties, fails personal if owner my opinion, convert perform duties, does not, his personam. operates act The one that the act into property for essentially for the taxation one language plain purposes. public l'in revenue Section a/nd says: collected assessed, levied, “There shall he annually paid income,” etc. net on all a tax рrohibited question provisions are act in
383 contained in tbe fourteenth amend- tbe limitations ment to the constitution. state J. J., concurs
Millard, Mitchell, with (concurring) J. am in accord with the Steinert, —I expressed preceding opinions views in the written Judges except respectively, Holcomb in Mitchell, opinions recognize so far as those and affirm cor- rectness two our & recent decisions: Tel. Pacific (2d) Tel. Co. v. Seattle, Wash. P. and State ex rel. Hamilton v. Martin, (2d) 23 P. 1. I dissented both of those cases, opinion and am still of the that both of them were in- correctly decided.
With reference to us, the case now before is there question but one involved. are concerned We not here relating with an act to a uniform income nor are tax, expediency we concerned with the wisdom, or desir- ability any particular kind income tax. areWe only graduated here concerned with tax act constitutionality. and its argument
Much of counsel been has devoted to an analysis arising of various decisions under the con- stitutions of other states and of United States. Those are of decisions here, little aid us because they upon peculiar provisions rest constitutional ob- taining jurisdictions. problem in those Our is to de- validity light termine the of the act before us in comparative our own constitution. A examination constitution this state at once it reveals that radically pro- differs of other those its states generis visions relative taxation. It sui respect. pro-
The fourteenth amendment to our constitution vides that all shall taxes the same uniform property, “property,” class of and that as therein everything, whether tan- used, shall mean include ownership. Regardless gible intangible, subject precise certainly of “income,” definition *18 tangible intangible, something. it be or it Whether surely ownership. subject an is to The income that or not some one’s else. his, individual earns receives is legally Having earned and received he is entitled to it, keep dispose of words, or use it. other else to it, rights ownership over he is entitled to exercise the comprehends “everything,” of course, it. The word something. word is even broader and includes the It say anything. everything, it When we than the word impossible something anything conceive of or else is beyond “prop- Had that. the constitution said that subject erty” something anything or include shall certainly ownership, would have included those terms say when it used the income. Did the constitution less question everything¶ The itsеlf. word answers might even to tax the unwise, unfair, It land at a acres of rate man who owns ten thousand from which a hundred that on the owner different Again, it. acres the constitution forbids taxed; is but might the man unfair, or even to tax unwise, not be it at a rate dif- ten head cattle who owns thousand owner of from on which the a thousand ferent it. but forbids taxed; head of is the constitution cattle might finally, not be or even unwise, unfair, And dollars has income of ten thousand man who tax the an man who different from that at a rate only taxed; is but an- thousand dollars earns one constitution forbids it. swer is the same—the declaring correct in act The lower court was question unconstitutional. (dissenting) dissent. J. —I
Blake, superior judgment appeal This is county, holding Thurston unconstitutional court commonly chapter Laws of known in- as the 1933— being come tax initiative measure 69. The No. act— holding theory on the based under the that, four- teenth amendment to the constitution, state the tax imposed being graduated is a tax, and, in re- uniformity, lation to lacks income, as defined amendment. considering meaning,
Before the amendment and its only background, it is towell consider not its historical social and but the economic condition of the state when (which repealed by amendment) article VII written into the constitution. major portion
In 1889 the wealth the state — lay produce agricultural, in its lands their fairly simple proc- mineral timber. Taxation was a *19 subjects tangible, easy ess. Its were to eval- visible— government fairly uate. The of functions were also simple. Relatively days speaking, in those the value tangible property great govern- of was and the cost of nothing little. ment The burden of taxation was com- pared property to the benefits the owner of real re- comparatively ceived as the of result his small con- organized protected him tribution to the state, which ownership property. in his and of use complexion even the But, then, economic country changing. country’s was More and more going intangibles wealth into bonds, stocks, —into securities of various sorts—indicia of which easily could elude the of search the tax collector. In subsequent light history, of the even then it should powers have been that obvious taxation must only years adoption elastic. It was few after the (1894) of the state constitution income tax theory ran afoul of constitutional inhibition. Pollock Co., Farmers Loan & Trust 157 U. S. U. S. was a new whose resources
This, however, state, vast on inex- of wealth that the land seemed lay nineties, After haustible. deрression middle continued until started, which immigration tide century. As the end of the decade of this toward first of this influx of and the still people, popular a result values of real prop- lay land, belief wealth relatively well increased amazingly kept erty But in the latter part taxes. increasing ahead to ebb rap- immigration began that decade tide of with real values receded equal idly, celerity. to a growing complexity due meantime, take had called society, the state been
organic functions, burden of ever-increasing over As long increased. had relatively cost government additional were increasing, values col- values But when property burden went unnoticed. acute —and to be began of taxation problem lapsed, cry increasing. been odd it has twenty years, louder in the ever has become for reduction taxes cost of increasing government. face of taxation real estate became more The burden during second and third decades of onerous facts, century by among reason several were areas allowed to following: Great were revert (1) *20 for municipalities non-payment taxes, and to the rolls; the tax (2) as completely disappeared property increased, on real capital burden taxes other bonds, securities, in stocks and investment sought or at entirely, carried, most, only taxation and escaped burden. a small portion for in taxes A decrease agitation developed. growing relief not state available, because But strait-jacket shape found itself article judicial interpreta- YII of with the constitution, cry placed upon for relief tions that had been it. The legislature, became loud, however, so that the at passed gov- empowering session an act appoint investigating ernor to commission “ thorough comprehensive . . . to make a and study subject and the entire of taxation . . . report findings . . the . their and recommendations to governor by . him . . to be transmitted ’’ legislature day opening on the of the next session. years agitation investiga- As a result of these subject, people tion of the there was submitted to the by adopted general them at the election of 1930, what is now the fourteenth amendment to the constitu- tion, reads as follows: by striking “Article YII is amended all out of sec- inserting tions 3 and 4, and in lieu thereof the
following, to be known as section 1: power § “Art. YII, of taxation shall never suspended, away. be surrendered or contracted All taxes shall be uniform same class authority levying within the territorial limits public tax and shall be levied and collected purposes only. ‘property’ The word as used herein everything, tangible shall mean and include whether intangible, subject ownership. or All real estate Legisla- shall ture one class: Provided, constitute That the may tax mines mineral resources and lands by yield devoted to reforestation either a tax or an may tax at ad valorem such rate as it both. fix, may Legislature by general Such as the laws provide the United States exempt Property shall be from taxation. school dis- state, counties, municipal corporations, other tricts and and credits actually secured exceeding exempt taxed state, property, in value the value of such shall Legislature from taxation. The shall have appropriate personal power, by property legislation, exempt ($300.00) to the amount of three hundred *21 family for dollars each head of a liable to assessment provisions and taxation under the of this laws state of which the individual is bona fide the actual ’’ owner. question presented appeal it,
As I see the real on this whether, is amendment, construction of this arewe going to the effort of state to the thwart the off throw strait-jacket requires To which it was bound. do so few words literal, technical construction perversion of their true and obvious amendment, disregard purpose intent and in total his- of its background brought torical and the conditions which being. it into proceeding
Before with the discussion of the consti- tutionality necessary more is to note one act, history step of taxation in state. in the eventful only people general At election of they passed passed an act tax bill, this income but forty levy limiting mills on real estate to taxes real is at last on dollar. The relief of income tax act is what cost—if the achieved, but at consequences are too obvious held invalid? The only general They, in- are however, discussion. ; we merely aspects legal with the concerned terest are the rev- of ours that is no concern the situation. It be insufficient will from on real enues taxation though support government schools, even per twenty-five cent former is reduced cost per thirty-three For, cent. one-third and the latter appear proceed, that, if this income it will as we no other source will have unconstitutionаl, the state prop- on real from taxes than revenue substantial will be inconse- erty. there course, addition, personal tangible quential taxes revenues power. police imposed under the licenses be obliterated. will for revenue All excise taxes argument support the attack on in- That, briefly (a) come tax act, stated, this: *22 permits prop- fourteenth amendment classification erty purposes uniformity requires for but taxation, property given (b) of taxation on a class; within that property anything, the amendment defines to be tan- gible intangible, subject ownership; (c) to that subject ownership; (d) income is to that income is property (e) therefore in class; constituted one that graduated classifying taxpayers a income tax, in groups according to amount of their vio- income, the uniformity, lates the rule of and the is act therefore unconstitutional. syllogism perfect,
The seems I see but, as there it, (1) notwithstanding are two answers to it: That, the property definition of contained the amendment, the imposed exaction under the tax law is excise an property (2) property and not a tax; if is a that, it by the tax, classifications fixed are within the act the constitutional limitations thе amendment. fourteenth
(1) It does not follow, the broad definition of property a contained amendment, this is property tax. To so me reason seems to to be sheer sophistry. The a fundamental character of tax can- changed legislative not be That declaration. which property prior was a tax on to the fourteenth amend- ment remains a and that which was an tax; enjoyment privileges, pos- exaction for made protection organized sible remains state, an excise tax. defining distinguishing property
The decisions hopeless part confusion, excise taxes are in due in provisions to differences in under con- constitutional mainly apprehend but to a failure sideration, to due generic differences two. distinc- between the tersely Co., Hattiesburg tion Grocery is stated in Robertson, Miss. So. 25 A. L. R. 748: necessarily joint product “Income is recipient efforts state recipient the state and the income, the to enable the furnishing protection necessary produce, enjoy to a receive, and it, analysis portion simply thereon in the last is cut appropriated by from the income and as its the state share thereof, and, while tax on income includes some of the elements both of and of a a tax on persons, strictly tax on it cannot be classified as a tax necessarily generically either, excise, and do would so should be enforced as such unless and until accomplish 112 of result which section adopted prevent, Constitution prevent property, discrimination the taxation proportion of so all shall bear its due ’’ *23 government. burdens Cooley, (4th ed.) Judge volume IV his § 1723, pertinent to the work on a statement Taxation, makes we both as to the confronted, with which are situation, legislative dec- and effect character an excise relating larations to them. not “§ 1723. An inheritance is an excise tax may, name, be
property a statute However, tax. right and, imposing of succession, one a tax on passing. property other reality, be one on the always legislative be cannot act title words, the imposed. tax of the of the character as conclusive taken An inheritance tax merely is not a tax depend made of the tax is the amount because because transmitted, nor the value succession lien on the is made a tax ’’ which is taxed. by standards, is the exaction Measured these what going by imposed into No. 69? initiative Without prоvisions well detail, in too much it is of the act long, way, general It is contents. but in a its note, hardly susceptible excellently of miscon- clear, drawn —
391 either struction, courts or administrative officials. only general subject objection It is that all taxes supreme are obnoxious—so well answered court of Missouri: question exceedingly the tax in “That onerous may nothing is undoubted; but said that there is
very poetical They or romantic at laws, ábout best. exacting are remorseless, do discriminate any nicety particular with But mere as to individual convenience. oppressiveness ground setting for is no them arresting operation.” Glasgow aside or their Mo. Rowse, 43 provides 1 of
Section the act that: paid shall “There be assessed, collected levied, annually, pro- a tax on all net income, hereinafter by every person residing vided, within state persons Section defines and income. provides
Section 3 for deductions to be allowed cor- porations. provides per-
Section for to be deductions allowed corporations. sons other than provides (a) exemptions:
Section for of income re- specified (b) ceived from various sources; and certain individuals and heads of fаmilies. prescribes computation
Section 6 for rates tax. provides personnel necessary
Section for the *24 the administration of act. the 8
Section the authorizes state tax to commission regulations looking make rules to the enforcement pro- of the act not in therewith. also conflict It by maldng taxpayer for the of return vides provides penalties return, certain for failure to make (12) providing: of section subdivision “Any person, corporation, or other than a who fails spec- make refuses to a return at the hereinbefore time
392 year
ified each or shall render a false or fraudulent return shall conviction fined five be not to exceed imprisoned hundred or be not to exceed one dollars, year, together of the court, at the discretion both, prosecution.” of with the cost provides making by 9 for of returns ad- Section guardians and trustees of ministrators, executors, es- levy impost on and the such estates. tates, provides for the Section 10 collection of the time tax, by payment (which for of and remedies failure levy general of on a same method as a execution record). provides judgment of a It also court by for contest of the amount method recovery overpayment. taxpayer; and also for to make 11 the tax commission authorizes Section taxpayer’s investigation records such cases as it deems advisable. provides 12 that no additional assessment
Section taxpayer and hear- without notice shall made be ing him. if demanded setting up provides for the of board
Section consisting persons, county, three each review grievances taxpayers it is hear function whose representatives commission. the tax prerequisites to actions 14 contains certain Section brought by taxpayer. may appeal provides state tax com- for to the Section county of review. boards from decisions mission appeal provides and review the Section courts. provides for refunds.
Section taxpayers deriving 18 relates to Section the state. without within and sources both disposition of revenues 19 relates to Section tax. from the derived *25 relates of
Section 20 to administrative features en- forcement.
Section 21 relates to correction of assessments. the by corporations. Section relates to evasions provides any holding por- Section 23 that the that tion of the act is unconstitutional shall render the not of invalid. rest the act prohibits publication
Section 24 the of individual publication provides for returns, but the of statistics, inspection attorney general. of the the rеturns provides appropriation for Section of $15,000 paying expenses for in incurred of administration the act. provides operative
Section 26 act shall that the received in incomes provisions This somewhat detailed review of the primarily purpose showing the act is for nothing gen- has whatever do with to erally accepted operates definition term. It entirely personam. requires taxpayer It to act. charges property. It him, not his And if does he not imposed upon act accordance with terms him, he subject penalty imprisonment. is to No lien —fine any particular property. attaches His is except sequestered, not seized or what is the equivalent judgment execution issued on a personam. against him in pays being enjoy privilege
He for able to his property, enjoy only protection which he can under the pays according organized state. And he degree protection. he If benefit derives enjoys pays enjoys If little, he he he he much, little. pays (relatively much) not more. requires every person receiving an
While act eight hundred to make in excess dollars a required pay family head return, the (providing owner) is a home until his income lie four dollars, reaches the sum of thousand he *26 personal a allowed to from the tax due deduct $17.50 exemption paid on of his taxes on account $50 home. example a Take
Let us consider another or two. family ten head of owner whose income is home year. Computation as- a shows his thousand dollars exemp- personal sessment to be Deduct $282.50. $17.50 pays paid He a his home. tion and for taxes on $50 twenty is a man whose income tax of Take $215. year. Computation per his shows dollars thousand deductions, to be Allow the assessment $957.50. price high paid him for is a Is too tax $890. grace only support pay state, in enjoyment guaranteed protection he is whose equality and uni- Is this a lack such an income? formity cer- excise, If is an in taxation? the tax tainly not. is recently very a has held that such
And this court Seattle, Tel. & Tel. tax an excise. Co. is Pacific (2d) question 21 P. 721. There the city whether an ordinance involved was as to gross tax on which levied a based revenues Seattle, corporations, public contravened the various service provided a The ordinance different rate constitution. operating corporations fields, in different but the on operating corporations in the same rate was held thе tax was an excise and that We same field. arbitrary or unreasonable. were not the classifications principle between tax I no see distinction can one under consideration case involved gross excise, is an a tax on revenue If a tax on here. any I distinction be- fail to see must be. net income operation Furthermore, result. if tween them power to city, whose of the state, creature strictly grant power limited from the within the may impose why state, I state fail to see excise, by express power only itself, whose to tax limited levy may prohibition, constitutional such tax. discussing I have refrained from decisions of courts pointed of other states, because, as out counsel for respondents, they part, for deal, the most with con- provisions they stitutional so different ours that authority sustaining cannot be deemed initiative No. 69. There is one case, decided however, since this argued, case was first which deals with a constitutional provision defining “property” compre- in even more hensive terms than our own fourteenth amendment. Equalisation, (2d) O’Connell v. State Board 25 P. (Mont.) supreme 114. There the court of Montana had *27 graduated under consideration a income tax en- law, lеgislature acted provi- under a constitutional defining property sion as follows: property XII, § “Article 17: The word as used hereby moneys, this Article is declared to include credits, bonds, stocks, and all franchises, matters things (real, personal mixed) capable private ownership, but this shall not be construed so as to any company authorize the taxation of the stocks of corporation company or when the of such corporation represented by such stocks is within the state and has been taxed.”
The court said: necessary
“It is not exact us declare the nature of income tax under consideration. It is apparent legislature that state of Montana intended an and did not intend to enact tax It that is also the with the Idaho should be considered as a tax law. it apparent legislature by adoption that from the took the statute Idaho,
statute state
construction, which was to the effect apparent It further that was that excise tax. is also it ‘property’ contained in section if definition of given expressed 17 of Article XII is to be tbe effect as Hilger supra,, argu- this court in v. Moore, then the plaintiff imposes ment that the Act ground. falls to the important supra, “It to note that if section 17, legislature particular does nоt limit the in the under general power legislature consideration, then the legislation, opinion, enact as discussed earlier in this legislature, comes into effect, in the absence just particular was restriction, as free legislature permissive was Idaho its consti- under authority. legislature tutional In that event the Chapter pro- free to enact follows 181, it that the visions of section not is and section 17 of Article XII are prohibitive, degree uniformity because the same required the case of an excise tax or in the required of an case income tax statute that is in one levy providing upon ‘property.’ (Hale County for a v. Quong Wing 82 Mont. Treasurer, 5; Pac. 39 Mont. Kirhendall, 250; 101 Pac. c. s. 233 U. S. ” 192.) 56 Ed. L. 32 S. Ct. binding Of course, this decision carries no force principle, legislative this court. ifBut upheld invalidity are to be enactments their unless beyond apparent all reasonable doubt, is to adhered brings persuasive power nigh to, to us well ir- disagreement judges resistible. The of courts and problems highest proof identical seems to afford the that “reasonable doubt” does exist.
(2) Let us however, that the character of assume, changed by the tax has been this broad definition of *28 property; in that the declaration the fourteеnth enjoy- amendment converted an exaction for the has personal privilege prop- of a from an ment excise to a erty beyond Still, tax. income tax act not always pale of its limitations. It borne in must be gTant not a mind that the state constitution is of theory power; power it is a limitation. The is that the government people, legislature, is in the that the govern- powers representing people, all the has specif- except people, are in such as ment inherent particularly impor- ically withheld. In this case, it principle, the act under because to remember this tant by people in- as themselves attack was enacted phase of this itiative measure No. 69. So the essence question people, the enactment of the is: Have the upon placed limitation amendment, fourteenth power their which renders taxation, own inherent impotent impose them them- to income tax selves ? gainsaid purpose
It be amend cannot that the taxing power, was ment to remove limitations on the as defined in The latter but archaic, VII. article power levy under it had to for rev the state excises right consistently enue. had sustained This been from court, Read, this Flеetwood v. Wash.
Pac. 47 R. A. 665, L. Tel. & Tel. v. Co. Pacific P. (2d) Seattle, 172 721. Can it possible by defining property everything capa-, that, ownership, people destroy ble intended they Patently, lucrative source revenue? did not. necessary sup Of citation of course, cases is port legislative authority classify persons groups purposes exacting for excise taxes only them. The limitation is that the classification arbitrary. shall not be unreasonable or And the courts nicety legislative weigh much will not with too dis respect. cretion in Tax State Board Commis A. 283U. S. 73 L. R. Jackson, sioners placed a limitation of uni- the amendment While formity on in the class, of taxation same (and qualified) placed but one limitation Eeverting power of classification. to the terms body find of it— we four elements amendment, mandatory. They declaratory prohibitory, are: *29 (1) power suspended, “The of taxation shall never be away” (distinctly prohibi- surrendered or contracted tory) (2) ; “taxes shall be uniform the same class property” (mandatory); of (3) property “shall mean everything, tangible intangible, and include whether subject ownership” (declaratory); (4) “all real (mandatory). estate shall constitute one class” Those subdivisions constitute the essence the amendment. any I fail to see wherein there is limitation contained classify property purposes therein to of taxation, other than that real shall constitute one class. estate goes saying It without the amendment that was adopted, holding judicial interpretation in view the and limitation of if article If true, YII. that purpose of the amendment was to rather broaden, power sacrificing than it is restrict, taxation, substance to form construe the amendment as to to so deprive had which it the state a source revenue adoption. before its phase problem presented of our
This was to and met supreme Ludlow-Saylor court of Missouri in Wollbrinck, Wire Co. v. 275 Mo. S. W. It was there said: appellant “The contends the act under that review (Laws p. seq.) taxing thereby in 1917, 524, incomes, et imposed a on in contravention of Section supra, in the terms the act the tax that proportion . .
not laid to value. . ‘property’ “In law and in the broadest sense means thing applicable owned,’ is, ‘a therefore, to what- subject legal ownership. ever is the It divisible species property, including physical into different goods, money; things, intangible things, as lands, such patent rights, copyrights, franchises, such trade- good rights namеs, trade business marks, will, anything every- etc. short it embraces action, may belong thing ownership to a man and which in the right protected by he has a to be law. directing Constitu- as the held, effect, court ac- levied should he tion taxes does, cording made to be was intended value, reference *30 person species property a than that which to other of abridge did not income; has in his that the Constitution provide a power Legislature of the the to revenue to directed command was income; taxation of that its (on property ac- which of other and distinct classes peculiar in measured count of their nature could be independent object value) the of taxation become of by proper procedure, susceptible, and are owner, the to for enforcement of the tax. lien or the seizure having property nature a such court held that it was of such mere characteristics, and not usufruct and the property, earnings physical labor, or mental nor the of review referred in clause under which was intended to to the according thereby subjected to taxation to be . . . its value. may ‘prop- “It be that the construction of the word appeared erty’ subject which has as definitive of of the ad taxation in all of the three valorem constitutions of originally made, this state when not in full ac- possible meaning cord with the term, broadest of that every literally might species prop- in include of that erty. compellable a But was not and the its view, (which pur- from restricted construction excluded incomes) personal earnings view to had been affixed years prior adoption six to the term of the Con- principle and the stitution that construction applied sustaining been in of a similar has since nature, taxes although proportioning without levied tax- thing taxed. . . the value . ation to property income is because it is an ownable “That simple apprehension thing, been affirmed matter which is a has under the definition above is, That it ‘in effect’ taxation of the labor stated. may produced capital be since it, conceded, or thing things or from it affects value reaction derived. But none these considerations which it is distinguishable are that incomes the fact alter intangible property yielding tangible nor them, that, they law Missouri, affect the established do by our Constitution and de- thus connoted are incomes recognize cisions. These incomes as one of the classes entering concept required into the not to proportion taxed to value, and, therefore, in. not falling designation within the which the Legislature except way; is forbidden to tax in that (as consequence plenary power body of the of that pro- raise revenue at will, absent a constitutional hibition) falling wholly scope of within the the au- thority Legislature impose taxes the sus- measuring impose by tenance of the State without its thing value of taxed. Taxation of incomes, therefore, does not offend 4 of Section Article 10 of the Constitution of 1875. . . . “In the act under review it is contended not even (conceding power levy tax) provi- distinguishing persons grading sions the tax paid in accordance distinctions, to be founded with such are justice utility and for the reason, *31 govern public legis- criteria which should true all —the justice Indeed
lative the essential the vari- action. act seems to be ous classifications the evident. Practically gradations of tax, identical classifications persons, the Federal are contained in act which etc., pattern law, and are set forth in of Missouri is the the many in found to exist the acts discriminations enlightened of the Union other states most ’’ of world. nations рrovision in considered the constitutional While in contained not the same as that case was that question under raised amendment, fourteenth presented. The de one here with the was identical importance peculiar to the solution cision presented, problem makes clear that in that it here light in the be construed amendment fourteenth must of this decisions under the existed, law as it adopted. In the amendment time the court, at the supra, in no Telephone sanctioned we case, Co. distinguishable exaction from the element essential holding a line questioned, we based here
4Q1 extending period years thirty of decisions over a Telephone prior adoption to the of the amendment. The subsequent adoption o. case was decided to the C By implication, of the fourteenth amendment. at least, existing court, decision, held that methods impaired by and forms of taxation were no wise terms of the amendment. Conceding imposed by the exaction the income tax act to be a tax, amendment still leaves to legislative discretion and determination classifica- persons subject tion of matter which the act applies. imposed So whether the tax be considered excise or tax, it no wise counter runs any prohibitory mandatory provision fourteenth amendment. my judgment, opinion, should be reversed. J.,C. concur JJ.,
Beals, Tolman, Geraghty, J. with Blake,