3d Session

SENATE

No. 705

SHALL THE INCOME-TAX AMENDMENT BE RATIFIED

ARTICLE BY

HON. NORRIS BROWN

UNITED STATES SENATOR FROM NEBRASKA

IN

THE EDITORIAL REVIEW

APRIL, 1910

PRESENTED BY MR. BORAH

DECEMBER 14, 1910.-Ordered to be printed

WASHINGTON

GOVERNMENT PRINTING OFFICE

SHALL THE INCOME TAX AMENDMENT BE RATIFIED ?

BY NORRIS BROWN, United States Senator from Nebraska.

[Printed in the Editorial Review of April, 1910.]

The American people have been given by Congress few opportunities to amend the Constitution. While the people have the right to amend the Constitution without having the proposed amendment first submitted by Congress they have never exercised that right. The Constitution may be amended in two ways. If the legislatures of two-thirds of the several States petition Congress for a convention to propose amendments it is the duty of Congress to call the convention; but never in the history of the country has this method been followed. The existing fifteen amendments to the Constitution have all been adopted by the other method provided in the Constitution, namely, by the action of Congress by a two-thirds vote of both Houses proposing amendments which were submitted to the several States and ratified by the legislatures of three-fourths of the States. Congress has been very slow to propose amendments. While it is true that Members of Congress have introduced several thousand resolutions since the Constitution was adopted, proposing various amendments thereto, only eighteen resolutions so offered have ever received the two-thirds vote of both Houses necessary to submit an amendment during all these years. The first ten amendments were proposed by the First Congress and were ratified by the States. The same Congress proposed two other amendments which failed of ratification.

The eleventh amendment was proposed by the Third Congress and was ratified in 1798. The twelfth amendment was proposed by the Fifth Congress and by the proclamation of the Secretary of State in 1804 was declared to have been ratified by the legislatures of threefourths of the States. The thirteenth amendment was proposed by the Thirtieth Congress in February, 1865, and was declared ratified in December of the same year.'

The first ten amendments were ratified by the following States and the notifications of ratification by the governors thereof were successively communicated by the President to Congress: New Jersey, Maryland, North Carolina, South Carolina, New Hampshire, Delaware, Pennsylvania, New York, Rhode Island, Vermont, and Virginia. There is no evidence on the Journals of Congress that the Legislatures of Connecticut, Georgia, and Massachusetts ratified them.

The States ratifying the thirteenth amendment were Illinois, Rhode Island, Michigan, Maryland, New York, West Virginia, laine, Kansas, Massachusetts, Pennsylvania, Virginia, Ohio, Missouri, Nevada, Indiana, Louisiana, Minnesota, Wisconsin, Vermont, Tennessee, Arkansas, Connecticut, New Hampshire, South Carolina, Alabama, North Carolina, and Georgia.

The fourteenth amendment was proposed by the Thirty-ninth Congress in June, 1866, and was declared ratified in July, 1868.1

The fifteenth amendment was proposed by the Fortieth Congress in February, 1869, and was declared ratified in March, 1870.2

So it appears that Congress has proposed, up to the year 1909, seventeen amendments to the Constitution, fifteen of which were ratified and two rejected by the States. This emphasizes the disposition of the people to abide by the original Constitution amending it only when moved to do so by some extraordinary reason. It is evidence also that the framers of the original instrument builded so well and so wisely that but few amendments have been deemed necessary in order to carry out the high purposes of a representative form of government.

In July, 1909, Congress by joint resolution proposed the sixteenth amendment, which reads as follows:

Congress shall have the power to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States and without regard to any census or enumeration.

It is well to note that in the judgment of Congress this amendment should be ratified by the States; for it will be recalled that the resolution proposing the sixteenth amendment received the unanimous vote of the Senate and the almost unanimous vote of the House of Representatives. When a measure in Congress receives such support from the chosen representatives of the people of every State in the Union who are under every obligation to represent their constituents with wisdom and fidelity, it may safely be concluded that some imperative reason involving the rights of all the people controlled them. It is also conclusive evidence that the demand for the amendment is nation wide.

The same reason that controlled Congress if understood by the electorate of the country will compel the members of the legislatures of the several States to ratify the amendment. What is that reason?

The existing Constitution confers the power of taxation upon Congress and provides that the tax may be laid either directly or indirectly on all kinds of property. But, it further provides, that if the

1 The proclamation of the Secretary of State was unusual in that it said the fourteenth amendment had been ratified by three-fourths of the States in the following manner: Connecticut, June, 1866; New Hampshire, July, 1866; Tennessee, July, 1866; New Jersey, September, 1866 (and the legislature of the same State passed a resolution in April, 1868, to withdraw its consent to it); Oregon, September, 1866; Vermont, November, 1866. Georgia rejected it November, 1866, and ratified it July, 1868; North Carolina rejected it December, 1866, and ratified it July, 1868; South Carolina rejected it December 20, 1866, and ratified it July, 1868; New York ratified it January, 1867; Ohio ratified it January 1, 1867 (and the legislature of the same State passed a resolution in January, 1868, to withdraw its consent to it); Illinois ratified it January, 1867; West Virginia, January, 1867; Kansas, January, 1867; Maine, January, 1867; Nevada, January, 1867; Missouri, January, 1867; Indiana, January, 1867; Minnesota, February, 1867; Rhode Island, February, 1867; Wisconsin, February, 1867; Pennsylvania, February, 1867; Michigan, February, 1867; Massachusetts, March, 1867; Nebraska, June, 1867; Iowa, April, 1868; Arkansas, April, 1868; Florida, June, 1868; Louisiana, July, 1868; and Alabama, July, 1868. Georgia again ratified the amendment February, 1870. Texas rejected it January, 1867, and ratified it October, 1869. The amendment was rejected by Kentucky, January 10, 1867; by Delaware, February, 1867; by Maryland, March, 1867, and was not afterward ratified by either State. The record in the office of the Secretary of State discloses that the following States ratified the fifteenth amendment: North Carolina, West Virginia, Massachusetts, Wisconsin, Maine, Louisiana, Michigan, South Carolina, Pennsylvania, Arkansas, Connecticut, Florida, Illinois, Indiana, New York (and the legislature of the same State passed a resolution the following year to withdraw its consent from it), New Hampshire, Nevada, Vermont, Virginia, Missouri, Mississippi, Ohio, Iowa, Kansas, Minnesota, Rhode Island, Nebraska, Texas, and Georgia.

The Congress shall have power "To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts, and Excises shall be uniform throughout the United States."-Sec. 8, art. 1, Constitution. (Hylton v. United States, 3 Dall., 171; Osborne v. Bank of the United States, 9 Wh., 739; Veazie Bank v. Fenno, 8 Wall., 533; Springer v. United States, 102 U. S., 586.)

tax is a direct tax it must be apportioned among the several State according to population.'

To lay a direct tax on any kind of property and apportion it among the several States according to population instead of according to value is admittedly so unjust and inequitable as to be acceptable to no one and therefore in effect impossible. The proposed amendment is a proposition to abolish the rule of apportionment among the States according to population so far as income taxes are concerned. It would not be necessary to eliminate this rule of apportionment except for the decision of the Supreme Court of the United States, in what is known as the Pollock case, decided in 1895, which held that a tax on incomes was a direct tax. Until that decision Congress had exercised the right at different times in the history of the country to lay and collect taxes on incomes without apportionment, on the theory that such a tax was an indirect and not a direct tax. Up to that time the Supreme Court had sustained the doctrine that a tax on incomes was not a direct tax and therefore need not be apportioned among the States according to population. But when the court changed its mind and overturned the rule which it had for a century sustained, the Government found itself without power either in time of peace or war to tax the large incomes of the country without apportioning the tax among the States, for it must be admitted that the judgment of the Supreme Court bound Congress and the people.

The effect, therefore, of the proposed amendment, if ratified, will be to restore to the people and to the Government a power for many years exercised by them in national emergencies to tax income without apportionment. The restoration of this power so long enjoyed and so recently denied may become necessary to the life of the Republic. Whether the power shall be exercised, or when it shall be exercised, or whether it shall be exercised at all, are other questions entirely aside from the question of whether the Government shall be vested or stripped of the power. The amendment vests the power in the Government; without the amendment the Government is without the power.

The sole question, therefore, presented by the amendment, and the sole consideration involved in its ratification or rejection, is whether or not the United States, the foremost nation of the world, shall be clothed with this perogative of national sovereignty-the power to tax incomes according to their value and without regard to apportionment among the several States according to population. I do not regard the question as debatable. From every standpoint this Nation should be clothed with every power necessary to protect itself and to maintain itself under all circumstances and under all possible dangers. To deny this proposition is to put our Nation at a disadvantage with every other civilized nation of the globe. England has had and exercised at different times for more than a hundred years the power to tax incomes. It was first invoked as a war measure in the year 1798. At that time England needed the revenue in order to enable her to defend herself against the

1 No capitation or other direct tax shall be laid unless in proportion to the census or enumeration herein before directed to be taken.-Sec. 9, art. 1, Constitution. (License Tax Cases, 5 Wall., 462; Springer v. United States, 102 U. S., 586; Pollock v. Farmers' Loan & Trust Co., 157 U. S., 429; Nicol v. Ames, 173 U.S., 509; Thomas v. United States, 192 U. S., 363; Spreckles Sugar Refining Co. v. McClain, 192 U. S., 397.) Pollock v. Farmers' Loan & Trust Co. (157 U. S., 429).