[The counsel quoting a learned brief of Mr. W. O. Bartlett, then went into an examination of the opinions of Chief Justices Ellsworth and Marshall, Oliver Wolcott, Madison, and others, to show that in their opinion, a tax like the present one would fall within the nature of a direct tax.]
Indeed, it is obvious that an income tax, levied on the profits of any business, does not fall ultimately on the consumer or patron of that business, in any other sense than that in which a poll tax or land tax may be said ultimately to fall, or be charged over by the payer of those taxes upon the persons with whom and for whom they do business, or to whom they rent their lands. The refinement which would argue otherwise, abolishes the whole distinction, and under it all taxes may be regarded as direct or indirect, at pleasure.
But, if the distinction is recognized (and it must be, for the Constitution makes it), then it follows, that an income tax is, and always heretofore has been, regarded as being a direct tax, as much so as a poll tax or as a land tax. If it be a direct tax, then the Constitution is imperative that it shall be apportioned.
If it be argued that an income tax cannot be apportioned, then, it cannot be levied; for only such direct taxes can be levied as can be apportioned.
But an income tax can be apportioned as easily as any other direct tax; first, by determining the amount to be raised from incomes throughout the United States, and then by ascertaining the proportion to be paid by the people of each State. An income tax, in the matter of its apportionment, is not embarrassed by any other difficulties than those which grow out of apportionment, in the admitted cases of poll taxes and land taxes.
It was clearly the object of the act, to compel parties to pay the legal percentage on their incomes, estimating them at their value in legal tender currency. If the reduction of all incomes to a legal tender standard was intended for no other purpose than to establish a uniform system in keeping the accounts of the internal revenue department, it is difficult to understand, first, why, in case of refusal to declare in which currency the income return is made, the assessor should be entitled to disregard the return, and exact, over and above the regular income tax, a penalty of twenty-five per cent.; and why 'the lists required by law to be furnished to collectors by assessors' are required 'in all cases to contain the several amounts of taxes assessed, estimated or valued in legal tender currency only?' If the collector's lists are to contain these amounts, these are the amounts to be collected and paid. This is evident from other provisions of the internal revenue law. Thus, by section 20 of act of June 30, 1864, as amended by act of July 13, 1866, as soon as the assessment has become perfect, the assessor is to make out the list and send it to the collector, and this list is the guide of the collector in the collection of the tax; and by section 34 of same act, as amended, the collector is charged with the amount of taxes as stated on the face of the lists, and credited with the amount of his collections.
The collector's duty is plain: to collect the amount set forth in the assessment list. The corresponding duty of the party taxed is equally clear, namely, to pay this amount.
The language of the law is in harmony with the obvious intention of those who framed it, which was to adopt one uniform standard for the computation, assessment and payment of taxes of this description.
The other question is one which seems settled by the case of Hylton v. United States, unanimously decided after able argument.