PRINCIPLES OF TAXATION. 475 



provision of the Constitution render the entire act imposing an 

 income tax unconstitutional and void ? 



The precise or original question involved, it was admitted, was 

 one on which the Federal Government had really never been 

 heard,* and was first brought before the United States Supreme 

 Court for a hearing and adjudication in April, 1895. On that 

 occasion the court held that the provisions of the act of August 

 15, 1895, were unconstitutional, so far " as they purport to impose 

 a tax on the rent or income of real estate." It was, however, 

 equally divided on the following questions, and expressed no 

 opinion in regard to them : 



(1) Whether the void provisions invalidated the whole act ; 

 (2) whether, as to the income from personal property as such, the 

 act is unconstitutional as levying direct taxes ; (3) whether any 

 part of the tax, if not considered as a direct tax, is invalid for 

 want of uniformity. 



The court, early in its history, adopted the practice of requir- 

 ing, if practicable, constitutional questions to be heard by a full 

 court, in order that the judgment in such cases might, if possible, 

 be the decision of the majority of the whole court. And as the 

 court was not full, at the first hearing in April, and as four judges 

 did not concur in the opinion then rendered, a rehearing was 

 granted by the court in the month following (May 6th, 7th, 8th) ; 

 in the announcement of which the Chief Justice remarked that 

 " the importance to the Government of the new views of its 

 taxing power can hardly be exaggerated." 



In advocating the constitutionality and rightfulness of the 

 provisions of the income tax of 1894, the then United States At- 

 torney General, Hon. Richard Olney, on behalf of the Govern- 

 ment, made in part the following argument : 



"What is this" (contested)" tax in its true value and essence ? 

 It is an assessment upon the taxpayer on account of his money- 

 spending power as shown by his revenue for the year preceding 

 the assessment. It is not a property tax in any sense or of any 

 sort. Yet this is the sort of tax which is called a tax on real 

 estate for no other reason than that last year's rents form a part 

 of the yardstick by which this year's money-spending capacity 

 is measured ! A greater error, I submit, could not easily be justi- 

 fied. My Lord Coke is quoted to the effect that a grant in fee 

 of the profits of land passes the land itself. Other citations are 

 always interesting, and state a rule of law which is indisputable 



* None of the previous decisions of the court " discussed the question whether a tax 

 on the income of personalty is equivalent to a tax on that personalty ; but all held real 

 estate liable to direct taxation only so as to sustain a tax on the income of realty on the 

 gi'ound of being an excise or duty." Chief-Justice Fuller. 



