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[158 U.S. 601, 607]   Jos. H. Choate and W. D. Guthrie, for appellants.

[158 U.S. 601, 613]   Atty. Gen. Olney and Asst. Atty. Gen. Whitney, for appellees.

[158 U.S. 601, 617]  

Mr. Chief Justice FULLER delivered the opinion of the court:

Whenever this court is required to pass upon the validity of an act of congress, as tested by the fundamental law enacted by the people, the duty imposed demands, in its discharge, the utmost deliberation and care, and invokes the deepest sense of responsibility. And this is especially so when the question involves the exercise of a great governmental power, and brings into consideration, as vitally affected by the decision, that complex system of government, so sagaciously framed to secure and perpetuate 'an indestructible Union, composed of indestructible states.'

We have, therefore, with an anxious desire to omit nothing which might in any degree tend to elucidate the questions submitted, and aided by further able arguments embodying the fruits of elaborate research, carefully re-examined these cases, with the result that, while our former conclusions remain unchanged, their scope must be enlarged by the acceptance of their logical consequences.

The very nature of the constitution, as observed by Chief Justice Marshall in one of his greatest judgments, 'requires that only its great outlines should be marked, its important objects designated, and the minor ingredients which compose those objects be deduced from the nature of the objects themselves.' 'In considering this question, then, we must never forget that it is a constitution that we are expounding.' McCulloch v. Maryland, 4 Wheat. 316, 407.

As heretofore stated, the constitution divided federal taxa- [158 U.S. 601, 618]   tion into two great classes,-the class of direct taxes, and the class of duties, imposts, and excises,-and prescribed two rules which qualified the grant of power as to each class.

The power to lay direct taxes, apportioned among the several states in proportion to their representation in the popular branch of congress,- representation based on population as ascertained by the census,-was plenary and absolute, but to lay direct taxes without apportionment was forbidden. The power to lay duties, imposts, and excises was subject to the qualification that the imposition must be uniform throughout the United States.

Our previous decision was confined to the consideration of the validity of the tax on the income from real estate, and on the income from municipal bonds. The question thus limited was whether such taxation was direct, or not, in the meaning of the constitution; and the court went no further, as to the tax on the income from real estate, than to hold that it fell within the same class as the source whence the income was derived,- that is, that a tax upon the realty and a tax upon the receipts therefrom were alike direct; while, as to the income from municipal bonds, that could not be taxed, because of want of power to tax the source, and no reference was made to the nature of the tax, as being direct or indirect.

We are now permitted to broaden the field of inquiry, and to determine to which of the two great classes a tax upon a person's entire income-whether derived from rents or products, or otherwise, of real estate, or from bonds, stocks, or other forms of personal property-belongs; and we are unable to conclude that the enforced subtraction from the yield of all the owner's real or personal property, in the manner prescribed, is so different from a tax upon the property itself that it is not a direct, but an indirect, tax, in the meaning of the constitution.

The words of the constitution are to be taken in their obvious sense, and to have a reasonable construction. In Gibbons v. Ogden, Mr. Chief Justice Marshall, wt h his usual felicity, said: 'As men whose intentions require no concealment generally employ the words which most directly and aptly [158 U.S. 601, 619]   EXPRESS THE IDEAS THEY INTEND TO CONVEY, the enlightened patriots who framed our constitution, and the people who adopted it, must be understood to have employed words in their natural sense, and to have intended what they have said.' 9 Wheat. 188. And in Rhode Island v. Massachusetts, where the question was whether a controversy between two states over the boundary between them was within the grant of judicial power, Mr. Justice Baldwin, speaking for the court, observed: 'The solution of this question must necessarily depend on the words of the constitution, the meaning and intention of the convention which framed and proposed it for adoption and ratification to the conventions of the people of and in the several states, together with a reference to such sources of judicial information as are resorted to by all courts in construing statutes, and to which this court has always resorted in construing the constitution.' 12 Pet. 721.

We know of no reason for holding otherwise than that the words 'direct taxes,' on the one hand, and 'duties, imposts and excises,' on the other, were used in the constitution in their natural and obvious sense. Nor, in arriving at what those terms embrace, do we perceive any ground for enlarging them beyond, or narrowing them within, their natural and obvious import at the time the constitution was framed and ratified.

And, passing from the text, we regard the conclusion reached as inevitable, when the circumstances which surrounded the convention and controlled its action, and the views of those who framed and those who adopted the constitution, are considered.

We do not care to retravel ground already traversed, but some observations may be added.

In the light of the struggle in the convention as to whether or not the new nation should be empowered to levy taxes directly on the individual until after the states had failed to respond to requisitions,-a struggle which did not terminate until the amendment to that effect, proposed by Massachusetts and concurred in by South Carolina, New Hampshire, New York, and Rhode Island, had been rejected,-it would seem beyond [158 U.S. 601, 620]   reasonable question that direct taxation, taking the place, as it did, of requisitions, was purposely restrained to apportionment according to representation in order that the former system as to ratio might be retained, while the mode of collection was changed.

This is forcibly illustrated by a letter of Mr. Madison of January 29, 1789, recently published,1 written after the ratification of the constitution, but before the organization of the government and the submission of the proposed amendment to congress, which, while opposing the amendment as calculated to impair the power, only to be exercised in 'extraordinary emergencies,' assigns adequate ground for its rejection as substantially unnecessary, since, he says, 'every state which chooses to collect its own quota may always prevent a federal collection by keeping a little beforehand in its finances, and mkaing its payment at once into the federal treasury.'

The reasons for the clauses of the constitution in respect of direct taxation are not far to seek. The states, respectively, possessed plenary powers of taxation. They could tax the property of their citizens in such manner and to such extent as they saw fit. They had unrestricted powers to impose duties or imposts on imports from abroad, and excises on manufactures, consumable commodities, or otherwise. They gave up the great sources of revenue derived from commerce. They retained the concurrent power of levying excises, and duties if covering anything other than excises; but in respect of them the range of taxation was narrowed by the power granted over interstate commerce, and by the danger of being put t disadvantage in dealing with excises on manufactures. They retained the power of direct taxation, and to that they looked as their chief resource; but even in respect of that they granted the concurrent power, and, if the tax were placed by both governments on the same subject, the claim of the United States had preference. Therefore they did not grant the power of direct taxation without regard to their own condition [158 U.S. 601, 621]   and resources as states, but they granted the power of apportioned direct taxation,-a power just as efficacious to serve the needs of the general government, but securing to the states the opportunity to pay the amount apportioned, and to recoup from their own citizens in the most feasible way, and in harmony with their systems of local self-government. If, in the changes of wealth and population in particular states, apportionment produced inequality, it was an inequality stipulated for, just as the equal representation of the states, however small, in the senate, was stipulated for. The constitution ordains affirmatively that each state shall have two members of that body, and negatively that no state shall by amendment be deprived of its equal suffrage in the senate without its consent. The constitution ordains affirmatively that representatives and direct taxes shall be apportioned among the several states according to numbers, and negatively that no direct tax shall be laid unless in proportion to the enumeration.

The founders anticipated that the expenditures of the states, their counties, cities, and towns, would chiefly be met by direct taxation on accumulated property, while they expected that those of the federal government would be for the most part met by indirect taxes. And in order that the power of direct taxation by the general government should not be exercised except on necessity, and, when the necessity arose, should be so exercised as to leave the states at liberty to discharge their respective obligations, and should not be so exercised unfairly and discriminatingly, as to particular states or otherwise, by a mere majority vote, possibly of those whose constituents were intentionally not subjected to any part of the burden, the qualified grant was made. Those who made it knew that the power to tax involved the power to destroy, and that, in the language of Chief Justice Marshall, 'the only security against the abuse of this power is found in the structure of the government itself. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation.' 4 Wheat. 428. And they retained this security by providing that direct taxation and representation in [158 U.S. 601, 622]   the lower house of congress should be adjusted on the same measure.

Moreover, whatever the reasons for the constitutional provisions, there they are, and they appear to us to speak in plain language.

It is said that a tax on the whole income of property is not a direct tax in the meaning of the constitution, but a duty, and, as a duty, leviable without apportionment, whether direct or indirect. We do not think so. Direct taxation was not restricted in one breath, and the restriction blown to the winds in another.

Cooley (Tax'n, p. 3) says that the word 'duty' ordinarily 'means an indirect tax, imposed on the importation, exportation, or consumption of goods'; having 'a broader meaning than 'custom,' which is a duty imposed on imports or exports'; that 'the term 'impost' also signifies any tax, tribute, or duty, but it is seldom applied to any but the indirect taxes. An 'excise' duty is an inland impost, levied upon articles of manufacture or sale, and also upon licenses to pursue certain trades or to deal in certain commodities.'

In the constitution, the words 'duties, imposts, and excises' are put in antithesis to direct taxes. Gouverneur Morris recognized this in his remarks in modifying his celebrated motion, as did Wilson in approving of the motion as modified. 5 Elliot, Db . 302. And Mr. Justice Story, in his Commentaries on the Constitution (section 952), expresses the view that it is not unreasonable to presume that the word 'duties' was used as equivalent to 'customs' or 'imposts' by the framers of the constitution, since in other clauses it was provided that 'no tax or duty shall be laid on articles exported from any state,' and that 'no state shall, without the consent of congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws'; and he refers to a letter of Mr. Madison to Mr. Cabell, of September 18, 1828, to that effect. 3 Madison's Writings, 636.

In this connection it may be useful, though at the risk of repetition, to refer to the views of Hamilton and Madison as [158 U.S. 601, 623]   thrown into relief in the pages of the Federalist, and in respect of the enactment of the carriage tax act, and again to briefly consider the Hylton Case, 3 Dall. 171, so much dwelt on in argument.

The act of June 5, 1794, laying duties upon carriages for the conveyance of persons, was enacted in a time of threatened war. Bills were then pending in congress to increase the military force of the United States, and to authorize increased taxation in various directions. It was therefore as much a part of a system of taxation in war times as was the income tax of the war of the Rebellion. The bill passed the house on the 29th of May, apparently after a very short debate. Mr. Madison and Mr. Ames are the only speakers on that day reported in the Annals. 'Mr. Madison objected to this tax on carriages as an unconstitutional tax; and, as an unconstitutional measure, he would vote against it.' Mr. Ames said: 'It was not to be wondered at if he, coming from so different a part of the country, should have a different idea of this tax from the gentleman who spoke last. In Massachusetts, this tax had been long known, and there it was called an 'excise.' It was difficult to define whether a tax is direct or not. He had satisfied himself that this was not so.'

On the 1st of June, 1794, Mr. Madison wrote to Mr. Jefferson: 'The carriage tax, which only struck at the constitution, has passed the house of representatives.' The bill then went to the senate, where, on the 3d day of June, it 'was considered and adopted'; and on the following day it received the signature of President Washington. On the same 3d day of June the senate considered 'An act laying certain duties upon snuff and refined sugar'; 'An act making further provisions for securing and collecting the duties on foreign and domestic distilled spirits, stills, wines, and teas'; 'An act for the more effectual protection of the southwestern frontier'; 'An act laying additional duties on goods, wares and merchandise,' etc.; 'An act laying duties on licenses for selling wines and foreign distilled spirituous liquors by retail'; and 'An act laying duties on property sold at auction.' [158 U.S. 601, 624]   It appears then that Mr. Madison regarded the carriage tax bill as unconstitutional, and accordingly gave his vote against it, although it was to a large extent, if not altogether, a war measure.

Where did Mr. Hamilton stand? At that time he was secretary of the treasury, and it may therefore be assumed, without proof, that he favored the legislation. But upon what ground? He must, of course, have come to the conclusion that it was not a direct tax. Did he agree with Fisher Ames, his personal and political friend, that the tax was an excise? The evidence is overwhelming that he did.

In the thirtieth number of the Federalist, after depicting the helpless and hopeless condition of the country growing out of the inability of the confederation to obtain from the states the moneys assigned to its expenses, he says: 'The more intelligent adversaries of the new constitution admit the force of this reasoning; but they qualify their admission, by a distinction between what they call 'internal' and 'external' taxations. The former they would reserve to the state governments; the latter, which they explain into commercial imposts, or rather duties on imported articles, they declare themselves willing to concede to the federal head.' In the thirty-sixth number, while still adopting the division of his opponents, he says: 'The taxes, intended to be comprised under the general denomination of internal taxes may be subdivided into those of the direct and those of the indirect kind. ... As to the latter, by which must be understood duties and excises on articles of consumption, one is at a loss to conceive what can be the nature of the difficulties apprehended.' Thus we find Mr. Hamilton, while writing to induce the adoption of the constitution, first dividing the power of taxation into 'external' and 'internal,' putting into the former the power of imposing duties on imported articles and into the latter all remaining powers; and, second, dividing the latter into 'direct' and 'indirect,' putting into the latter duties and excises on articles of consumption.

It seems to us to inevitably follow that in Mr. Hamilton's judgment at that time all internal taxes, except duties and [158 U.S. 601, 625]   excises on articles of consumption, fell into the category of direct taxes.

Did he, in supporting the carriage tax bill, change his views in this respect? His argument in the Hylton Case in support of the law enables us to answer this question. It was not reported by Dallas, but was published in 1851 by his son, in the edition of all Hamilton's writings except the Federalist. After saying that we shall seek in vain for any legal meaning of the respective terms 'direct and indirect taxes,' and after forcibly stating the impossibility of collecting the tax if it is to be considered as a direct tax, he says, doubtingly: 'The following are presumed to be the only direct taxes: Capitation or poll taxes; taxes on lands and buildings; general assessments, whether on the whole property of individuals, or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes.' "Duties,' 'imposts,' and 'excises' appear to be contradistinguished from 'taxes." 'If the meaning of the word 'excise' is to be sought in the British statutes, it will be found to include the duty on carriages, which is there considered as an excise.' 'Where so important a distinction in the constitution is to be realized, it is fair to seek the meaning of terms in the statutory language of that country from which our jurisprudence is derived.' 7 Hamilton's Works, 328. Mr. Hamilton therefore clearly supported the law which Mr. Madison opposed, for the same reason that his friend Fisher Ames did, because it was an excise, and as such was specifically comprehended by the constitution. Any loose expressions in definition of the word 'direct,' so far as conflicting with his well-considered views in the Federalist, must be regarded as the liberty which the advocate usually thinks himself entitled to take with his subject. He gives, however, it appears to us, a definition which covers the question before us. A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax, in the meaning of the constitution. And Mr. Hamilton, in his report on the public credit, in referring to contracts with citizens of a foreign country, said: 'This principle, which seems critically correct, [158 U.S. 601, 626]   would exempt as well the income as the capital of the property. It protects the use, as effectually as the thing. What, in fact, is property, but a fiction, without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.' 3 Hamilton's Works, 34.

We think there is nothing in the Hylton Case in conflict with the foregoing. The case is badly reported. The report does not give the names of both the judges before whom the case was argued in the circuit court. The record of that court shows that Mr. Justice Wilson was one and District Judge Grf fin, of Virginia, was the other. Judge Tucker, in his appendix to the edition of Blackstone published in 1803 (1 Tuck. Bl. Comm. pt. 1, p. 294), says: 'The question was tried in this state in the case of Hylton v. U. S., and, the court being divided in opinion, was carried to the supreme court of the United States by consent. It was there argued by the proposer of it (the first secretary of the treasury), on behalf of the United States, and by the present chief justice of the United States on behalf of the defendant. Each of those gentlemen was supposed to have defended his own private opinion. That of the secretary of the treasury prevailed, and the tax was afterwards submitted to, universally, in Virginia.'

We are not informed whether Mr. Marshall participated in the two days' hearing at Richmond, and there is nothing of record to indicate that he appeared in the case in this court; but it is quite probable that Judge Tucker was aware of the opinion which he entertained in regard to the matter.

Mr. Hamilton's argument is left out of the report, and in place of it it is said that the argument turned entirely upon the point whether the tax was a direct tax, while his brief shows that, so far as he was concerned, it turned upon the point whether it was an excise, and therefore not a direct tax.

Mr. Justice Chase thought that the tax was a tax on expense, because a carriage was a consumable commodity, and in that view the tax on it was on the expense of the owner. He expressly declined to give an opinion as to what were the [158 U.S. 601, 627]   direct taxes contemplated by the constitution. Mr. Justice Paterson said: 'All taxes on expenses or consumption are indirect taxes. A tax on carriages is of this kind.' He quoted copiously from Adam Smith in support of his conclusions, although it is now asserted that the justices made small account of that writer. Mr. Justice Iredell said: 'There is no necessity, or propriety in determining what is or is not a direct or indirect tax in all cases. It is sufficient, on the present occasion, for the court to be satisfied that this is not a direct tax, contemplated by the constitution.'

What was decided in the Hylton Case was, then, that a tax on carriages was an excise, and therefore an indirect tax. The contention of Mr. Madison in the house was only so far disturbed by it that the court classified it where he himself would have held it constitutional, and he subsequently, as president, approved a similar act (3 Stat. 40). The contention of Mr. Hamilton in the Federalist was not disturbed by it in the least. In our judgment, the construction given to the constitution by the authors of the Federalist (the five numbers contributed by Chief Justice Jay related to the danger from foreign force and influence, and to the treaty-making power) should not and cannot be disregarded.

The constitution prohibits any direct tax, unless in proportion to numbers as ascertained by the census, and in the light of the circumstances to which we have referred, is it not an evasion of that prohibition to hold that a general unapportioned tax, imposed upon all property owners as a body for or in respect of their property, is not direct, in the meaning of the constitution, because confined to the income therefrom?

Whatever the speculative views of political economists or revenue reformers may be, can it be properly held that the constitution, taken in its plain and obvious sense, and with due regard to the circumstances attending the formation of the government, authorizes a general unapportioned tax on the products of the farm and the rents of real estate, although imposed merely because of ownership, and with no possible means of escape from payment, as belonging to a [158 U.S. 601, 628]   totally different class from that which includes the property from whence the income proceeds?

There can be but one answer, unless the constitutional restriction is to be treated as utterly illusory and futile, and the object of its framers defeated. We find it impossibl to hold that a fundamental requisition deemed so important as to be enforced by two provisions, one affirmative and one negative, can be refined away by forced distinctions between that which gives value to property and the property itself.

Nor can we perceive any ground why the same reasoning does not apply to capital in personalty held for the purpose of income, or ordinarily yielding income, and to the income therefrom. All the real estate of the country, and all its invested personal property, are open to the direct operation of the taxing power, if an apportionment be made according to the constitution. The constitution does not say that no direct tax shall be laid by apportionment on any other property than land; on the contrary, it forbids all unapportioned direct taxes; and we know of no warrant for excepting personal property from the exercise of the power, or any reason why an apportioned direct tax cannot be laid and assessed, as Mr. Gallatin said in his report when secretary of the treasury in 1812, 'upon the same objects of taxation on which the direct taxes levied under the authority of the state are laid and assessed.'

Personal property of some kind is of general distribution, and so are incomes, though the taxable range thereof might be narrowed through large exemptions.

The congress of the confederation found the limitation of the sources of the contributions of the states to 'land, and the buildings and improvements thereon,' by the eighth article of July 9, 1778, so objectionable that the article was amended April 28, 1783, so that the taxation should be apportioned in proportion to the whole number of white and other free citizens and inhabitants, including those bound to servitude for a term of years, and three-fifths of all other persons, except Indians not paying taxes; and Madison, Ellsworth, and Hamilton, in their address, in sending the amend- [158 U.S. 601, 629]   ment to the states, said, 'This rule, although not free from objections, is liable to fewer than any other that could be devised.' 1 Elliot, Deb. 93, 95, 98.

Nor are we impressed with the contention that, because in the four instances in which the power of direct taxation has been exercised, congress did not see fit, for reasons of expediency, to levy a tax upon personalty, this amounts to such a practical construction of the constitution that the power did not exist, that we must regard ourselves bound by it. We should regret to be compelled to hold the powers of the general government thus restricted, and certainly cannot accede to the idea that the constitution has become weakened by a particular course of inaction under it.

The stress of the argument is thrown, however, on the assertion that an income tax is not a property tax at all; that it is not a real-estate tax, or a crop tax, or a bond tax; that 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; that rents received, crops harvested, interest collected, have lost all connection with their origin, and, although once not taxable, have become transmuted, in their new form, into taxable subject-matter,-in other words, that income is taxable, irrespective of the source from whence it is derived.

This was the view entertained by Mr. Pitt, as expressed in his celebrated speech on introducing his income tax law of 1799, and he did not hesitate to carry it to its logical conclusion. The English loan acts provided that the public dividends should be paid 'free of all taxes and charges whatsoever'; but Mr. Pitt successfully contended that the dividends for the purposes of the income tax were to be considered simply in relation to the recipient as so much income, and that the fund holder had no reason to complain. And this, said Mr. Gladstone, 55 years after, was the rational construction of the pledge. Financial Statements, 32.

The dissenting justices proceeded in effect, upon this ground in Weston v. City of Charleston, 2 Pet. 449, but the court rejected it. That was a stat tax, it is true; but the states have power to [158 U.S. 601, 630]   lay income taxes, and, if the source is not open to inquiry, constitutional safeguards might be easily eluded.

We have unanimously held in this case that, so far as this law operates on the receipts from municipal bonds, it cannot be sustained, because it is a tax on the power of the states and on their instrumentalities to borrow money, and consequently repugnant to the constitution. But if, as contended, the interest, when received, has become merely money in the recipient's pocket, and taxable as such, without reference to the source from which it came, the question is immaterial whether it could have been originally taxed at all or not. This was admitted by the attorney general, with characteristic candor; and it follows that if the revenue derived from municipal bonds cannot be taxed, because the source cannot be, the same rule applies to revenue from any other source not subject to the tax, and the lack of power to levy any but an apportional tax on real and personal property equally exists as to the revenue therefrom.

Admitting that this act taxes the income of property, irrespective of its source, still we cannot doubt that such a tax is necessarily a direct tax, in the meaning of the constitution.

In England, we do not understand that an income tax has ever been regarded as other than a direct tax. In Dowell's History of Taxation and Taxes in England, admitted to be the leading authority, the evolution of taxation in that country is given, and an income tax is invariably classified as a direct tax. 3 Dowell (1884) 103, 126. The author refers to the grant of a fifteenth and tenth and a graduated income tax in 1435, and to many subsequent comparatively ancient statutes as income tax laws. 1 Dowell, 121. It is objected that the taxes imposed by these acts were not, scientifically speaking, income taxes at all, and that, although there was a partial income tax in 1758, there was no general income tax until Pitt's of 1799. Nevertheless, the income taxes levied by these modern acts-Pitt's, Addington's, Petty's, Peel's-and by existing laws, are all classified as direct taxes; and, so far as the income tax we are considering is concerned, that view is concurred in by the cyclopedists, the lexicographers, and [158 U.S. 601, 631]   the political economists, and generally by the classification of European governments wherever an income tax obtains.

In Attorney General v. Queen Ins. Co., 3 App. Cas. 1090, which arose under the British North America act of 1867 (30 & 31 Vict. c. 3, 92), which provided that the provincial legislatures could only raise revenue for provincial purposes within each province (in addition to licenses) by direct taxation, an act of the Quebec legislature laying a stamp duty came under consideration, and the judicial committee of the privy council, speaking by Jessel, M. R., held that the words 'direct taxation' had 'either a technical meaning, or a general, or, as it is sometimes called, a popular, meaning. One or other meaning the words must have; and in trying to find out their meaning we must have recourse to the usual sources of information, whether regarded as technical words, words of art, or words used in popular language.' And considering 'their meaning either as words used in the sense of political economy, or as words used in jurisprudence of the courts of law,' it was concluded that stamps were not included in the category of direct taxation, and that the imposition was not warranted.

In Attorney General v. Reed, 10 App. Cas. 141, Lord Chancellor Selborne said, in relation to the same act of parliament: 'The question whether it is a direct or an indirect tax cannot depend upon those special events which may very in particular cases, but the best general rule is to look to the time of payment; and if at the time the ultimate incidence is uncertain, then, as it appears to their lordships, it cannot, in this view, be called direct taxation within the meaning of the second section f the ninety-second clause of the act in question.'

In Bank v. Lambe, 12 App. Cas. 575, the privy council, discussing the same subject, in dealing with the argument much pressed at the bar, that a tax, to be strictly direct, must be general, said that they had no hesitation in rejecting it for legal purposes. 'It would deny the character of a direct tax to the income tax of this country, which is always spoken of as such, and is generally looked upon as a [158 U.S. 601, 632]   direct tax of the most obvious kind; and it would run counter to the common understanding of men on this subject, which is one main clue to the meaning of the legislature.'

At the time the constitution was framed and adopted, under the systems of direct taxation of many of the states, taxes were laid on incomes from professions, business, or employments, as well as from 'offices and places of profit'; but if it were the fact that there had then been no income tax law, such as this, it would not be of controlling importance. A direct tax cannot be taken out of the constitutional rule because the particular tax did not exist at the time the rule was prescribed. As Chief Justice Marshall said in the Dartmouth College Case: 'It is not enough to say that this particular case was not in the mind of the convention when the article was framed, nor of the American people when it was adopted. It is necessary to go further, and to say that, had this particular case been suggested, the language would have been so varied as to exclude it, or it would have been made a special exception. The case, being within the words of the rule, must be within its operation likewise, unless there be something in the literal construction so obviously absurd, or mischievous, or repugnant to the general spirit of the instrument as to justify those who expound the constitution in making it an exception.' 4 Wheat. 518, 644.

Being direct, and therefore to be laid by apportionment, is there any real difficulty in doing so? Cannot congress, if the necessity exist of raising thirty, forty, or any other number of million dollars for the support of the government, in addition to the revenue from duties, imposts, and excises, apportion the quota of each state upon the basis of the census, and thus advise it of the payment which must be made, and proceed to assess that amount of all the real and personal property and the income of all persons in the state, and collect the same, if the state does not in the meantime assume and pay its quota and collect the amount according to its own system, and in its own way? Cannot congress do this, as respects either or all these subjects of taxation, and deal with each in such manner as might be deemed expedient; as, indeed, was done in the act of July 14, 1798 (1 Stat. 597, c. 75)? Inconveniences might pos- [158 U.S. 601, 633]   sibly attend the levy of an income tax, notwithstanding the listing of receipts, when adjusted, furnishes its own valuation; but that it is apportionable is hardly denied, although it is asserted that it would operate so unequally as to be undesirable.

In the disposition of the inquiry whether a general unapportioned tax on the income of real and personal property can be sustained, under the constitution, it is apparent that the suggestion that the result of compliance with the fundamental law would lead to the abandonment of that method of taxation altogether, because of inequalities alleged to necessarily accompany its pursuit, could not be allowed to influence the conclusion; but the suggestion not unnaturally invites attention to the contention of appellants' counsel that the want of uniformity and equality in this act is such as to invalidate it. Figures drawn from the census are given, showing that enormous assets of mutual insurance companies, of building associations, of mutual savings banks, large productive property of ecclesiastical organizations, are exempted, and it is claimed that the exemptions reach so many hundred millions that the rate of taxation would perhaps have been e duced one-half, if they had not been made. We are not dealing with the act from that point of view; but, assuming the data to be substantially reliable, if the sum desired to be raised had been apportioned, it may be doubted whether any state, which paid its quota and collected the amount by its own methods, would or could, under its constitution, have allowed a large part of the property alluded to to escape taxation. If so, a better measure of equality would have been attained than would be otherwise possible, since, according to the argument for the government, the rule of equality is not prescribed by the constitution as to federal taxation, and the observance of such a rule as inherent in all just taxation is purely matter of legislative discretion.

Elaborate argument is made as to the efficacy and merits of an income tax in general, as on the one hand equal and just, and on the other elastic and certain; not that it is not open to abuse by such deductions and exemptions as might make taxation under it so wanting in uniformity and equality as in [158 U.S. 601, 634]   substance to amount to deprivation of property without due process of law; not that it is not open to fraud and evasion, and inquisitorial in its methods; but because it is pre-eminently a tax upon the rich, and enables the burden of taxes on consumption and of duties on imports to be sensibly diminished. And it is said that the United States as 'the representative of an indivisible nationality, as a political sovereign equal in authority to any other on the face of the globe, adequate to all emergencies, foreign or domestic, and having at its command for offense and defense and for all governmental purposes all the resources of the nation,' would be 'but a maimed and crippled creation after all,' unless it possesses the power to levy a tax on the income of real and personal property throughout the United States without apportionment.

The power to tax real and personal property, and the income from both, there being an apportionment, is conceded; that such a tax is a direct tax in the meaning of the constitution has not been, and, in our judgment, cannot be, successfully denied; and yet we are thus invited to hesitate in the enforcement of the mandate of the constitution, which prohibits congress from laying a direct tax on the revenue from property of the citizen without regard to state lines, and in such manner that the states cannot intervene by payment in regulation of their own resources, lest a government of delegated powers should be found to be, not less powerful, but less absolute, than the imagination of the advocate had supposed.

We are not here concerned with the question whether an income tax be or be not desirable, nor whether such a tax would enable the government to diminish taxes on consumption and duties on imports, and to enter upon what may be believed to be a reform of its fiscal and commercial system. Questions of that character belong to the controversies of political parties, and cannot be settled by judicial decision. In these cases our province is to determine whether this income tax on the revenue from property does or does not belong to the class of direct taxes. If it does, it is, being unapportioned, in violation of the constitution, and we must so declare.

Differences have often occurred in this court,-differences [158 U.S. 601, 635]   exist now,-but there has never been a time in its history when there has been a difference of opinion as to its duty to announce its deliberate conclusions unaffected by considerations not pertaining to the case in hand.

If it be true that the constitution should have been so framed that a tax of this kind could be laid, the instrument defines the way for its amendment. In no part of it was greater sagacity displayed. Except that no state, without its consent, can be deprived of its equal suffrage in the senate, the constitution may be amended upon the concurrence of two-thirds of both houses, and the ratification of the legislatures or conventions f the several states, or through a federal convention when applied for by the legislatures of two-thirds of the states, and upon like ratification. The ultimate sovereignty may be thus called into play by a slow and deliberate process, which gives time for mere hypothesis and opinion to exhaust themselves, and for the sober second thought of every part of the country to be asserted.

We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.

Being of opinion that so much of the sections of this law as lays a tax on income from real and personal property is invalid, we are brought to the question of the effect of that conclusion upon these sections as a whole.

It is elementary that the same statute may be in part constitutional and in part unconstitutional, and, if the parts are wholly independent of each other, that which is constitutional may stand, while that which is unconstitutional will be rejected. And in the case before us there is no question as to the validity of this act, except sections 27 to 37, inclusive, which relate to the subject which has been under discussion; and, as to them, we think the rule laid down by Chief Justice Shaw in Warren v. Charlestown, 2 Gray, 84, is [158 U.S. 601, 636]   applicable,-that if the different parts 'are so mutually connected with and dependent on each other, as conditions, considerations, or compensations for each other, as to warrant a belief that the legislature intended them as a whole, and that if all could not be carried into effect the legislature would not pass the residue independently, and some parts are unconstitutional, all the provisions which are thus dependent, conditional, or connected must fall with them.' Or, as the point is put by Mr. Justice Matthews in Poindexter v. Greenhow, 114 U.S. 270, 304 , 5 S. Sup. Ct. 903, 962: 'It is undoubtedly true that there may be cases where one part of a statute may be enforced, as constitutional, and another be declared inoperative and void, because unconstitutional; but these are cases where the parts are so distinctly separable that each can stand alone, and where the court is able to see, and to declare, that the intention of the legislature was that the part pronounced valid should be enforceable, even though the other part should fail. To hold otherwise would be to substitute for the law intended by the legislature one they may never have been willing, by itself, to enact.' And again, as stated by the same eminent judge in Spraigue v. Thompson, 118 U.S. 90, 95 , 6 S. Sup. Ct. 988, where it was urged that certain illegal exceptions in a section of a statute might be disregarded, but that the rest could stand: 'The insuperable difficulty with the application of that principle of construction to the present instance is that by rejecting the exceptions intended by the legislature of Georgia the statute is made to enact what, confessedly, the legislature never meant. It confers upon the statute a positive operation beyond the legislative intent, and beyond what any one can say it would have enacted, in view of the illegality of the exceptions.'

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation em- [158 U.S. 601, 637]   bodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole. Being invalid as to the greater part, and falling, as the tax would, if any part were held valid, in a direction which could not have been contemplated, except in connection with the taxation considered as an entirety, we are constrained to conclude that sections 27 to 37, inclusive, of the act, which became a law, without the signature of the president, on August 28, 1894, are wholly inoperative and void.

Our conclusions may therefore be summed up as follows:

First. We adhere to the opinion already announced,-that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.

Second. We are of opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

Third. The tax imposed by sections 27 to 37, inclusive, of the act of 1894, so far as it falls on the income of real estate, and of personal property, being a direct tax, within the meaning of the constitution, and therefore unconstitutional and void, because not apportioned according to representation, all those sections, constituting one entire scheme of taxation, are necessarily invalid.

The decrees hereinbefore entered in this court will be vacated. The decrees below will be reversed, and the cases remanded, with instructions to grant the relief prayed. [158 U.S. 601, 638]  

Mr. Justice HARLAN, dissenting.

At the former hearing of these causes, it was adjudged that, within the meaning of the constitution, a duty on incomes arising from rents was a direct tax on the lands from which such rents were derived, and therefore must be apportioned among the several states on the basis of population, and not by the rule of uniformity, throughout the United States, as prescribed in the case of duties, imposts, and excises; and the court, eight of its members being present, was equally divided upon the question whether all the other provisions of the statute relating to incomes would fall in consequence of that judgment. 15 Sup. Ct. 673.

It is appropriate now to say that, however objectionable the law would have been, after the provision for taxing incomes arising from rents was stricken out, I did not then, nor do I now, think it within the province of the court to annul the provisions relating to incomes derived from other specified sources, and take from the government the entire revenue contemplated to be raised by the taxation of incomes, simply because the clause relating to rents was held to be unconstitutional. The reasons for this view will be stated in another connection.

From the judgment heretofore rendered I dissented, announcing my entire concurrence in the views expressed by Mr. Justice WHITE in his very able opinion. I stated at that time some general conclusions reached by me upon the several questions covered by the opinion of the majority.

In dissenting from the opinion and judgment of the court on the present application for a rehearing, I alluded to particular questions discussed by the majority, and stated that in a dissenting opinion to be subsequently filed I would express my views more fully than I could then do as to what, within the meaning of the constitution, and looking at the practice of the government, as well as the decisions of this court, was a 'direct' tax, to be levied only by apportioning it among the states according to their respective numbers.

By the twet y-seventh section of the act of August 28, 1894, known as the [158 U.S. 601, 639]   'Wilson Tariff Act,' and entitled 'An act to reduce taxation, to provide revenue for the government, and for other purposes,' it was provided 'that from and after January 1st, 1895, and until January 1st, 1900, there shall be assessed, levied, collected, and paid annually upon the gains, profits, and income received in the preceding calendar year by every citizen of the United States, whether residing at home or abroad, and every person residing therein, whether said gains, profits, or income be derived from any kind of property, rents, interest, dividends, or salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever, a tax of two per centum on the amount so derived over and above four thousand dollars, and a like tax shall be levied, collected, and paid annually upon the gains, profits, and income from all property owned and of every business, trade, or profession carried on in the United States by persons residing without the United States.'

The twenty-eighth section declares what shall be included and what excluded in estimating the gains, profits, and income of any person.

The constitution declares that 'the congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.' Article 1, 8.

The only other clauses in the constitution, at the time of its adoption, relating to taxation by the general government, were the following:

'Representatives and direct taxes shall be apportioned among the several states which may be included in this Union, according to their respective numbers, which shall be determined by adding to the whole number of free persons, including those bound to service for a term of years, and excluding Indians not taxed, three-fifths of all other persons. The actual enumeration shall be made within three years after the first meeting of the congress of the United States, and [158 U.S. 601, 640]   within every subsequent term of ten years, in such manner as they shall by law direct.' Article 1, 2.

'No capitation, or other direct tax, shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be taken.' Article 1, 9.

'No tax or duty shall be laid on articles exported from any state.' Article 1, 9.

The fourteenth amendment provides that 'representatives shall be apportioned among the several states according to their respective numbers, counting the whole number of persons in each state, excluding Indians not taxed.'

It thus appears that the primary object of all taxation by the general government is to pay the debts and provide for the common defense and general welfare of the United States, and that, with the exception of the inhibition upon taxes or duties on articles exported from the states, no restriction is in terms imposed upon national taxation, except that direct taxes must be apportioned among the several states on the basis of numbers (excluding Indians not taxed), while duties, imposts, and excises must be uniform throughout the United States.

What are 'direct taxes,' within the meaning of the constitution? In the convention of 1787, Rufus King asked what was the precise meaning of 'direct' taxation, and no one answered. Madison's Papers, 5 Elliott's Debates, 451. The debates of that famous body do not show that any delegate attempted to give a clear, succinct definition of what, in his opinion, was a direct tax. Indeed, the report of those debates, upon the question now before us, is very meagre and unsatisfactory. An illustration of this is found in the case of Gouverneur Morris. It is stated that on the 12th of July, 1787, he moved to add to a clause empowering congress to vary representation according to the principles of 'wealth and number of inhabitants,' a proviso 'that taxation shall be in proportion to representation.' And he is reported to have remarked on that occasion that, while some objections lay against his motion, he supposed 'they would be removed by restraining the rule to direct taxation.' 5 Elliott's Debates ( Ed. 1888) 302. But, on the 8th of August, 1787, the work of the committee on detail being before [158 U.S. 601, 641]   the convention, Mr. Morris is reported to have remarked, 'let it not be said that direct taxation is to be proportioned to representation.' 5 Elliott's Debates (Ed. 1888) 393.

If the question propounded by Rufus King had been answered in accordance with the interpretation now given, it is not at all certain that the constitution, in its present form, would have been adopted by the convention, nor, if adopted, that it would have been accepted by the requisite number of states.

A question so difficult to be answered by able statesmen and lawyers directly concerned in the organization of the present government can now, it seems, be easily answered, after a re-examination of documents, writings, and treatises on political economy, all of which, without any exception worth noting, have been several times directly brought to the attention of this court. And whenever that has been done the result always, until now, has been that a duty on incomes, derived from taxable subjects, of whatever nature, was held not to be a direct tax within the meaning of the constitution, to be apportioned among the states on the basis of population, but could be laid, according to the rule of uniformity, upon individual citizens, corporations, and associations, without reference to numbers in the particular states in which such citizens, corporations, or associations were domiciled. Hamilton, referring to the distinction between direct and indirect taxes, said it was 'a matter of regret that terms so uncertain and vague in so important a point are to be found in the constitution,' and that it would be vain to seek 'for any antecedent settled legal meaning to the respective terms.' 7 Hamilton's Works, 845.

This court is again urged to consider this question in the light of the theories advanced by political economists. But Chief Justice Chase, delivering the judgment of this court in Bank v. Fenno, 8 Wall. 533, 541, observed that the enumeration of the different kinds of taxes that congress was authorized to impose was probably made with very little reference to the speculations of political economists, and that there was nothing in the great work of Adam Smith, published shortly before the meeting of the convention of 1787, that [158 U.S. 601, 642]   gave any light on the meaning of the words 'direct taxes' in the constitution.

From the very necessity of the case, therefore, we are compelled to look at the practice of the government after the adoption of the constitution, as well as to the course of judicial decision.

By an act of congress passed June 5, 1794 (1 Stat. 373, c. 45), specified duties were laid 'upon all carriages for the conveyance of persons' that should be kept by or for any person for his use, or to be let out to hire, or for the conveying of passengers. The case of Hylton v. U. S., 3 Dall. 171, decided in 1796, distinctly presented the question whether the duties laid upon carriages by that act was a direct tax, within the meaning of the constitution. If it was a tax of that character, it was conceded that the statute was unconstitutional, for the reason that the duties imposed by it were not apportioned among the states on the basis of numbers. As the case involved an important constitutional question, each of the justices who heard the argument delivered a separate opinion. Chief Justice Ellsworth was sworn into office on the day the decision was announced, but, not having heard the whole of the argument, declined to take any part in the judgment. It can scarcely be doubted that he approved the decision; for, while a senator in congress from Connecticut, he voted more than once for a bill laying duties on a rriages, and, with Rufus King, Robert Morris, and other distinguished statesmen, voted in the senate for the act of June 5, 1794. Ann. Cong. (3d Sess.) 1793-95, pp. 120, 849.

It is well to see what the justices who delivered opinions in the Hylton Case said as to the meaning of the words 'direct taxes' in the constitution.

Mr. Justice Chase said: 'As it was incumbent on the plaintiff's counsel in error, so they took great pains to prove that the tax on carriages was a direct tax; but they did not satisfy my mind. I think, at least, it may be doubted, and if I only doubted I should affirm the judgment of the circuit court. The deliberate decision of the national legislature (who did not consider a tax on carriages a direct tax, but [158 U.S. 601, 643]   thought it was with in the description of a duty) would determine me, if the case was doubtful, to receive the construction of the legislature. But I am inclined to think that a tax on carriages is not a direct tax, within the letter or meaning of the constitution. The great object of the constitution was to give congress a power to lay taxes adequate to the exigencies of government; but they were to observe two rules in imposing them, namely, the rule of uniformity, when they laid duties, imposts, or excises, and the rule of apportionment according to the census, when they laid any direct tax. ... The constitution evidently contemplated no taxes as direct taxes, but only such as congress could lay in proportion to the census. The rule of apportionment is only to be adopted in such cases where it can reasonably apply; and the subject taxed must ever determine the application of the rule. If it is proposed to tax any specific article by the rule of apportionment,-and it would evidently create great inequality and injustice,-it is unreasonable to say that the constitution intended such tax should be laid by that rule. It appears to me that a tax on carriages cannot be laid by the rule of apportionment without very great inequality and injustice. For example, suppose two states, equal in census, to pay 80,000 dollars each, by a tax on carriages of 8 dollars on every carriage; and in one state there are 100 carriages and in the other 1,000. The owners of carriages in one state would pay ten times the tax of owners in the other. A., in one state, would pay for his carriage 8 dollars, but B., in the other state, would pay for his carriage 80 dollars. ... I think an annual tax on carriages for the conveyance of persons may be considered as within the power granted to congress to lay duties. The term 'duty' is the most comprehensive next to the general term 'tax,' and practically in Great Britain (whence we take our general ideas of taxes, duties, imposts, excises, customs, etc.) embraces taxes on stamps, tolls for passage, etc., and is not confined to taxes on importation only. ... I am inclined to think-but of this I do not give a judicial opinion-that the direct taxes contemplated by the constitution are only two, to wit, a capitation or poll tax, simply, without [158 U.S. 601, 644]   regard to property, profession, or any other circumstance, and a tax on land. I doubt whether a tax by a general assessment of personal property within the United States is included within the term direct tax.'

Mr. Justice Paterson: 'What is the natural and common or technical and appropriate meaning of the words 'duty' and 'excise' it is not easy to ascertain. They present no clear and precise idea to the mind. Different persons will annex different significations to the terms. It was, however, obviously the intention of the framers of the constitution that congress should possess full power over every species of taxable property except exports. The term 'taxes' is generical, and was made use of to vest in congress plenary authority in all cases of taxation. The general division of taxes is into direct and indirect. Although the latter term is not to be found in the constitution, yet the former necessarily implies it. Indirect stands opposed to direct. Te re may, perhaps, be an indirect tax on a particular article, that cannot be comprehended within the description of duties, or imposts, or excises. In such case it will be comprised under the general denomination of 'taxes,' for the term 'tax' is the genus, and includes (1) direct taxes; (2) duties, imposts, and excises ; (3) all other classes of an indirect kind, and not within any of the classifications enumerated under the preceding heads. The question occurs, how is such a tax to be laid, uniformly or apportionately? The rule of uniformity will apply, because it is an indirect tax, and direct taxes only are to be apportioned. What are direct taxes within the meaning of the constitution? The constitution declares that a capitation tax is a direct tax, and, both in theory and practice, a tax on land is deemed to be a direct tax. In this way the terms 'direct taxes' and 'capitation' and other direct tax are satisfied. ... I never entertained a doubt that the principal, I will not say the only, objects that the framers of the constitution contemplated as falling within the rule of apportionment were a capitation tax and a tax on land. Local considerations and the particular circumstances and relative situation of the states naturally lead to this view of the subject. The provision was made [158 U.S. 601, 645]   in favor of the Southern states. They possessed a large number of slaves. They had extensive tracts of territory, thinly settled, and not very productive. A majority of the states had but few slaves, and several of them a limited territory, well settled, and in a high state of cultivation. The Southern states, if no provision had been introduced in the constitution, would have been wholly at the mercy of the other states. Congress, in such case, might tax slaves, at discretion or arbitrarily, and land in every part of the Union after the same rate or measure; so much a head in the first instance, and so much an acre in the second. To guard against imposition in these particulars was the reason of introducing the clause in the constitution, which directs that representatives and direct taxes shall be apportioned among the states according to their respective numbers. On the part of the plaintiff in error it has been contended that the rule of apportionment is to be favored, rather than the rule of uniformity, and, of course, that the instrument is to receive such a construction as will extend the former and restrict the latter. I am not of that opinion. The constitution has been considered as an accommodation system. It was the effect of mutual sacrifices and concessions. It was the work of compromise. The rule of apportionment is of this nature. It is radically wrong. It cannot be supported by any solid reasoning. Why should slaves, who are a species of property, be represented more than any other property? The rule, therefore, ought not to be extended by construction. Again, numbers do not afford a just estimate or rule of wealth. It is, indeed, a very uncertain and incompetent sign of opulence. ... If a tax upon land, where the object is simple and uniform throughout the states, is scarcely practicable, what shall we say of a tax attempted to be apportioned among, and raised and collected from, a number of dissimilar objects? The difficulty will increase with the number and variety of the things proposed for taxation. We shall be obliged to resort to intricate and endless variations and assessments, in which everything will be arbitrary, and nothing certain. There will be no rule to walk by. The rule of uniformity, on the con- [158 U.S. 601, 646]   trary, implies certainty, and leaves nothing to the will and pleasure of the assessor. In such cases the object and the sum coincide, the rule and thing unite, and of course there can be no imposition. The truth is that the articles taxed in one state should be taxed in another. In this way the spirit of jealousy is appeased, and tranquillity preserved; in this way the pressure on industry will be equal in the several states, and the relatin between the different subjects of taxation duly preserved. Apportionment is an operation on states, and involves valuations and assessments, which are arbitrary, and should not be resorted to but in case of necessity. Uniformity is an instant operation on individuals, without the intervention of assessments, or any regard to states, and is at once easy, certain, and efficacious. All taxes on expenses or consumption are indirect taxes.'

Mr. Justice Iredell: '(1) All direct taxes must be apportioned. (2) All duties, imposts, and excises must be uniform. If the carriage tax be a direct tax, within the meaning of the constitution, it must be apportioned. If it be a duty, impost, or excise, within the meaning of the constitution, it must be uniform. If it can be considered as a tax neither direct, within the meaning of the constitution, nor comprehended within the term 'duty,' 'impost,' or 'excise,' there is no provision in the constitution, one way or another, and then it must be left to such an operation of the power as if the authority to lay taxes had been given generally in all instances, without saying whether they should be apportioned or uniform; and in that case I should presume the tax ought to be uniform, because the present constitution was particularly intended to affect individuals, and not states, except in particular cases specified, and this is the leading distinction between the articles of confederation and the present constitution. As all direct taxes must be apportioned, it is evident that the constitution contemplated none as direct but such as could be apportioned. If this cannot be apportioned, it is, therefore, not a direct tax, in the sense of the constitution. That this tax cannot be apportioned is evident.' 'Such an arbitrary method of taxing different states differently is a suggestion [158 U.S. 601, 647]   altogether new, and would lead, if practiced, to such dangerous consequences, that it will require very powerful arguments to show that the method of taxing would be in any manner compatible with the constitution, with which at present I deem it utterly irreconcilable; it being altogether destructive of the notion of a common interest, upon which the very principles of the constitution are founded, so far as the condition of the United States will admit.' 'Some difficulties may occur which we do not at present foresee. Perhaps a direct tax, in the sense of the constitution, can mean nothing but a tax on something inseparably annexed to the soil; something capable of apportionment under all such circumstances.' 'It is sufficient, on the present occasion, for the court to be satisfied that this is not a direct tax contemplated by the constitution, in order to affirm the present judgment; since, if it cannot beapportioned, it must necessarily be uniform. I am clearly of opinion this is not a direct tax, in the sense of the constitution, and therefore that the judgment ought to be affirmed.'

Mr. Justice Wilson: 'As there were only four judges, including myself, who attended the argument of this cause, I should have thought it proper to join in the decision, though I had before expressed a judicial opinion on the subject, in the circuit court of Virginia, did not the unanimity of the other three judges relieve me from the necessity. I shall now, however, only add that my sentiments, in favor of the constitutionality of the tax in question, have not been changed.'

The scope of the decision in the Hylton Case will appear from what this court has said in later cases, to which I will hereafter refer.

It is appropriate to observe, in this connection, that the importance of the Hylton Case was not overlooked by the statesmen of that day. It was argued by eminent lawyers, and we may well assume that nothing was left unsaid that was necessary to a full understanding of the question involved. Edmund Pendleton, of Virginia, concurring with Madison that a tax on carriages was a direct tax, within the meaning of the constitution, prepared a paper on the subject, and [158 U.S. 601, 648]   incloe d it to Mr. Giles, then a senator from Virginia. Under date of February 7, 1796, Madison wrote to Pendleton: 'I read with real pleasure the paper you put into the hands of Mr. Giles, which is unquestionably a most simple and lucid view of the subject, and well deserving the attention of the court which is to determine on it. The paper will be printed in the newspapers in time for the judges to have the benefit of it. I did not find that it needed any of those corrections which you so liberally committed to my hand. It has been though unnecessary to prefix your name; but Mr. Giles will let an intimation appear, along with the remarks, that they proceed from a quarter that claims hand. It has been thought unnecessary to a question on which my mind was more satisfied, and yet I have very little expectation that it will be viewed by the court in the same light it is by me.' 2 Mad. Writings, 77. And on March 6, 1796, two days before the Hylton Case was decided, Madison wrote to Jefferson: 'The court has not given judgment yet on the carriage tax. It is said the judges will be unanimous for its constitutionality.' 2 Mad. Writings, 87. Mr. Justice Iredell, in his Diary, said: 'At this term Oliver Ellsworth took his seat as chief justice. The first case that came up was that of Hylton v. The United States. This was a very important cause, as it involved a question of constitutional law. The point was the constitutionality of the law of congress of 1794, laying duties upon carriages. If a direct tax, it could only be laid in proportion to the census, which has not as yet been taken. The counsel of Hylton, Campbell and Ingersoll, contended that the tax was a direct tax, and were opposed by Lee and Hamilton. The court unanimously agreed that the tax was constitutional, and delivered their opinions seriatim.' Again: 'The day before yesterday Mr. Hamilton spoke in our court, attended by the most crowded audience I ever saw there, both houses of congress being almost deserted on the occasion. Though he was in very ill health, he spoke with astonishing ability, and in a most pleasing manner, and was listened to with the profoundest attention. His speech lasted about three hours. It was on the question whether the car- [158 U.S. 601, 649]   riage tax, as laid, was a constitutional one.' 2 McRee, Life of Iredell, 459, 461.

Turning now to the acts of congress passed after the decision in the Hylton Case, we find that by the acts of July 14, 1798 (1 Stat. 597, c. 75 ), August 2, 1813 (3 Stat. 53, c. 37), January 9, 1815 (3 Stat. 164, c. 21 ), and March 5, 1816 (3 Stat. 255, c. 24), direct taxes were assessed upon lands, improvements, dwelling houses, and slaves, and apportioned among the several states. And by the act of August 5, 1861 (12 Stat. 294, 297, c. 45), entitled 'An act to provide increased revenues from imports, to pay interest on the debt, and for other purposes,' a direct tax was assessed and apportioned among the states on lands, improvements, and dwelling houses only.

Instances of duties upon tangible personal property are found in the act of January 18, 1815 (3 Stat. 180, c. 22), imposing duties upon certain goods, wares, and merchandise manufactured or made for sale within the United States, or the territories thereof, namely, upon pig iron, castings of iron, bar iron, rolled or slit iron, nails, brads, or sprigs, candles of white wax, mould candles of tallow, hats, caps, umbrellas, and parasols, paper, playing and visiting cards, saddles, bridles, books, beer, ale, porter, and tobacco; and also in the act of January 18, 1815 (3 Stat, 186, c. 23), which laid a duty, graduated by value, upon 'all household furniture kept for use,' and upon gold and silver watches.

It may be observed, in passing, that the above statutes, with one exception, were all enacted during the administration of President Madison, and were approved by him.

Instances of duties upon intangible personal property are afforded by the stamp act of July 6, 1797 (1 Stat. 527, c. 11), which, among other things, levied stamp dt ies upon bonds, notes, and certificates of stock. Similar duties had been made familiar to the American people by the British stamp act of 1765 (26 British St. at Large, 179), and were understood by the delegates to the convention of 1787 to be included among the duties mentioned in the constitution. 1 Elliot, Deb. 368; 5 Elliot, Deb. 432.

The reason slaves were included in the earlier acts as proper [158 U.S. 601, 650]   subjects of direct taxation is thus explained by this court in Bank v. Fenno, above cited: 'As persons, slaves were proper subjects of a capitation tax, which is described in the constitution as a direct tax; as property, they were, by the laws of some, if not most, of the states, classed as real property, descendible to heirs. Under the first view, they would be subject to the tax of 1798, as a capitation tax; under the latter, they would be subject to the taxation of the other years, as realty. That the latter view was that taken by the framers of the acts after 1798 becomes highly probable, when it is considered that, in the states where slaves were held, much of the value which would otherwise have attached to land passed into the slaves. If, indeed, the land only had been valued, without the slaves, the land would have been subject to much heavier proportional imposition in those states than in states where there were no slaves; for the proportion of tax imposed on each state was determined by population, without reference to the subjects on which it was to be assessed. The fact, then, that slaves were valued, under the act referred to, far from showing, as some have supposed, that congress regarded personal property as a proper object of direct taxation under the constitution, shows only that congress, after 1798, regarded slaves, for the purposes of taxation, as realty.' 8 Wall. 543.

Recurring to the course of legislation, it will be found that by the above act of August 5, 1861, congress not only laid and apportioned among the states a direct tax of $20,000,000 upon lands, improvements, and dwelling houses, but it provided that there should be 'levied, collected, and paid upon the annual income of every person residing in the United States, whether such income is derived from any kind of property, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any source whatever, if such annual income exceeds the sum of eight hundred dollars, a tax of three per centum on the amount of such excess of each income above eight hundred dollars,' etc. 12 Stat. 309, c. 45.

Subsequent statutes greatly extended the area of taxation. By the act of July 1, 1862, a duty was imposed on [158 U.S. 601, 651]   the gross amount of all receipts for the transportation of passengers by railroads, steam vessels, and ferryboats; on all dividends in scrip or money declared due or paid by banks, trust companies, insurance companies, and upon 'the annual gains, profits, or income of every person residing in the United States, whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any source whatever,' etc. 12 Stat. 473, c. 119. The act of June 30, 1864, as did the previous act of 1862, imposed a duty on gains, profits, or income from whatever kind of property or from whatever source derived, including 'rents.' 13 Stat. 281, c. 173. The act of March 3, 1865, increased the amount of such duty. 13 Stat. 479, c. 78. All subsequent acts of congress retained the provision imposing a duty on income derived from rents and from every kind of property. 14 Stat. 4, 5, c. 15; Id. 477, 480, c. 169; 16 Stat. 256, c. 255.

What has been the course of judicial decision touching the clause of the constitution that relates to direct taxes? And, particularly, what, in the opinion of this court, was the scope and effect of the decision in Hylton v. U. S.?

In Insurance Co. v. Soule, 7 Wall. 433, 444, the question was presn ted whether the duty imposed by the act of June 30, 1864, as amended by that of July 13, 1866, on the dividends and undistributed sums,-that is, on the incomes, from whatever source, of insurance companies,-was a direct tax that could only be laid by apportionment among the states. The point was distinctly made in argument that 'an income tax is, and always heretofore has been, regarded as being a direct tax, as much so as a poll tax or a land tax. If it be a direct tax, then the constitution is imperative that it shall be apportioned.' Mr. Justice Swayne, delivering the unanimous judgment of this court, said: 'What are direct taxes was elaborately argued and considered by this court in Hylton v. U. S., decided in the year 1796 ... The views expressed in this [that] case are adopted by Chancellor Kent and Justice [158 U.S. 601, 652]   Story in their examination of the subject.' 'The taxing power is given in the most comprehensive terms. The only limitations imposed are that direct taxes, including the capitation tax, shall be apportioned; that duties, imposts, and excises shall be uniform; and that no duties shall be imposed upon articles exported from any state. With these exceptions the exercise of the power is, in all respects, unfettered. If a tax upon carriages, kept for his own use by the owner, is not a direct tax, we can see no ground upon which a tax upon the business of an insurance company can be held to belong to that class of revenue charges.' 'The consequences which would follow the apportionment of the tax in question among the states and territories of the Union, in the manner prescribed by the constitution, must not be overlooked. They are very obvious. Where such corporations are numerous and rich, it might be light; where none exist, it could not be collected; where they are few and poor, it would fall upon them with such weight as to involve annihilation. It cannot be supposed that the framers of the constitution intended that any tax should be apportioned the collection of which on that principle would be attended with such results. The consequences are fatal to the proposition. To the question under consideration it must be answered that the tax to which it relates is not a direct tax, but a duty or excise; that it was obligatory on the plaintiff to pay it.'

In Bank v. Fenno, 8 Wall. 533, the principal question was whether a tax on state bank notes issued for circulation was a direct tax. On behalf of the bank it was contended by distinguished counsel that the tax was a direct one, and that it was invalid, because not apportioned among the states agreeably to the constitution. In explanation of the nature of direct taxes, they relied largely (so the authorized report of the case states) on the writings of Adam Smith, and on other treatises, English and American, on political economy. In the discussion of the case, reference was made by counsel to the former decisions in Hylton v. U. S., and Insurance Co. v. Soule. Chief Justice Chase, delivering the judgment of the court, after observing (as I have [158 U.S. 601, 653]   already stated) that the works of political economists gave no valuable light on the question as to what, in the constitutional sense, were direct taxes, entered upon an examination of the numerous acts of congress imposing taxes. That examination, he announced on behalf of this court, showed 'that personal property, contracts, occupations, and the like, have never been regarded by congress as proper subjects of direct tax.' 'It may be rightly affirmed, therefore, that in the practical construction of the constitution by congress direct taxes have been limited to taxes on land and appurtenances, and taxes on polls, or capitation taxes. And this construction is entitled to great consideration, especially in the absence of anything adverse to it in the discussions of the convention which framed, and of the conventions which ratified, the constitution.' Referring to certain observations of Madison, King, and Ellsworth in the convention of 1787, he said: A ll this doubtless shows uncertainty as to the true meaning of the term 'direct tax'; but it indicates also an understanding that direct taxes were such as may be levied by capitation, and on lands, appurtenances, or, perhaps, by valuation and assessment of personal property upon general lists, for these were the subjects from which the states at that time usually raised their principal supplies. This view received the sanction of this court two years before the enactment of the first law imposing direct taxes eo nomine.' The case last referred to was Hylton v. U. S. After a careful examination of the opinions in that case, Chief Justice Chase proceeded: 'It may safely be assumed, therefore, as the unanimous judgment of the court [in the Hylton Case], that a tax on carriages is not a direct tax. And it may further be taken as established, upon the testimony of Paterson, that the words 'direct taxes,' as used in the constitution, comprehended only capitation taxes, and taxes on land, and perhaps taxes on personal property by general valuation and assessment of the various descriptions possessed within the several states. It follows, necessarily, that the power to tax without apportionment extends to all other objects. Taxes on other objects are included under the heads of taxes not direct, duties, imposts, and excises, and must [158 U.S. 601, 654]   be laid and collected by the rule of uniformity. The tax under consideration is a tax on bank circulation, and may very well be classed under the head of duties. Certainly, it is not, in the sense of the constitution, a direct tax. It may be said to come within the same category of taxation as the tax on incomes of insurance companies, which this court at the last term, in the case of Insurance Co. v. Soule, 7 Wall. 434, held not to be a direct tax.'

In Scholey v. Rew, 23 Wall. 331, 337, the question was whether a duty laid by the act of July 13, 1866 (14 Stat. 140, 141), upon successions, was a direct tax, within the meaning of the constitution of the United States. The act provided that the duty 'shall be paid at the time when the successor, or any person in his right or on his behalf, shall become entitled in possession to his succession, or to the receipt of the income and profits thereof.' The act further provided that 'the term 'real estate' should include 'all lands, tenements, and hereditaments, corporeal and incorporeal,' and that the term 'succession' should denote 'the devolution of title to any real estate." Also: 'That every past or future disposition of real estate by will, deed, or laws of descent, by reason whereof any person shall become beneficially entitled, in possession or expectancy, to any real estate, or the income thereof, upon the death of any person ... entitled by reason of any such disposition, a 'succession ;" and that 'the interest of any successor in moneys to arise from the sale of real estate, under any trust for the sale thereof, shall be deemed to be a succession chargeable with duty under this act, and the said duty shall be paid by the trustee, executor, or other person having control of the funds.' It is important also to observe that this succession tax was made a lien on the land 'in respect whereof' it was laid, and was to be 'collected by the same officers, in the same manner, and by the same processes as direct taxes upon lands, under the authority of the United States.' A duty was also imposed by the same act on legacies and distributive shares of personal property.

It would seem that this case was one that involved directly [158 U.S. 601, 655]   the meaning of the words 'direct taxes' in the constitution. In the argument of that case it was conceded by the counsel for the taxpayer that the opinions in the Hylton Case recognized a tax on land and a capitation tax to be the only direct taxes contemplated by the constitution. But counsel said: 'The present is a tax on land, if ever one was. No doubt, it is to be paid by the owner of the land, if he can be made to pay it, but that is true of any tax that ever was or ever cn be imposed on property. And as if to prove how directly the property, and not the property owner, is aimed at, the duty is made a specific lien and charge upon the land 'in respect whereof' it is assessed. More than this, as if to show how identical, in the opinion of congress, this duty was with the avowedly direct tax upon lands which it had levied but a year or two before, it enacts that this succession tax alone, out of a great revenue system, should be collected by the same officers, in the same manner, and by the same processes, as direct taxes upon lands under the authority of the United States.'

This interpretation of the constitution was rejected by every member of this court. Mr. Justice Clifford, delivering the unanimous judgment of the court, said: 'Support to the first objection is attempted to be drawn from that clause of the constitution which provides that direct taxes shall be apportioned among the several states which may be included within the Union, according to their respective numbers; and also from the clause which provides that no capitation or other direct tax shall be laid unless in proportion to the census or amended enumeration; but it is clear that the tax or duty levied by the act under consideration is not a 'direct tax' within the meaning of either of those provisions. Instead of that it is plainly an excise tax or duty, authorized by section eight of article one, which vests power in congress to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare. Such a tax or duty is neither a tax on land nor a capitation exaction, as subsequently appears from the language of the section imposing the tax or duty, as well as from the preceding section, which provides that the term 'succession' shall denote the devolution [158 U.S. 601, 656]   of real estate; and the section which imposes the tax or duty also contains a corresponding clause, which provides that the term 'successor' shall denote the person so entitled, and that the term 'predecessor' shall denote the grantor, testator, ancestor, or other person from whom the interest of the successor has been or shall be derived.' Again: 'Whether direct taxes, in the sense of the constitution, comprehend any other tax than a capitation tax and a tax on land, is a question not absolutely decided, nor is it necessary to determine it in the present case, as it is expressly decided that the term does not include the tax on income, which cannot be distinguished in principle from a succession tax such as the one involved in the present controversy. Insurance Co. v. Soule, 7 Wall. 446; Bank v. Fenno, 8 Wall. 546; Clarke v. Sickel, 14 Int. Rev. Rec. 6, Fed. Cas. No. 2,862. Neither duties nor excises were regarded as direct taxes by the authors of The Federalist, No. 36, p. 273; Hamilton's Works, 847; License Tax Cases, 5 Wall. 462.' 'Exactions for the support of the government may assume the form of duties, imposts, or excises, or they may also assume the form of license fees for permission to carry on particular occupations or to enjoy special franchises, or they may be specific in form, as when levied upon corporations in reference to the amount of capital stock, or to the business done or profits earned by the individual or corporation. Cooley, Const. Lim. 495; Provident Inst. v. Massachusetts, 6 Wall. 626; Bank v. Apthorp, 12 Mass. 252. Sufficient appears in the prior suggestions to define the language employed, and to point out what is the true intent and meaning of the provision, and to make it plain that the exaction is not a tax upon the land, and that it was rightfully levied, if the findings of the court show that the plaintiff became entitled, in the language of the section, or acquired the estate or the right to the income thereof by the devolution of the title to the same, as assumed by the United States.'

The meaning of the words 'direct taxes' was again the subject of consideration by this court in Springer v. U. S., 102 U.S. 586, 599 , 600 S., 602 A reference to the printed arguments in that case will show that this question was most [158 U.S. 601, 657]   thoroughly examined, every member of the court participating in the decision. The question presented was as to the constitutionality of the act of June 30, 1864 (13 Stat. 281, c. 173), as amended by the act of 1865 ( 13 Stat. 469, c. 78), so far as it levied a duty upon gains, profits, and income derived from every kind of property, and from every trade, profession, or employment. The contention of Mr. Springer was that such a tax was a direct tax that could not be levied except by apportioning the same among the states, on the basis of numbers. In support of his position he cited numerous authorities, among them all or most of the leading works on political economy and taxation. Mr. Justice Swayne, again delivering the unanimous judgment of this court, referred to the proceedings and debates in the convention of 1787, to The Federalist, to all the acts of congress imposing taxation, and to the previous cases of Hylton v. U. S.; Insurance Co. v. Soule; Bank v. Fenno, and Scholey v. Rew. Among other things, he said: 'It does not appear that any tax like the one here in question was ever regarded or treated by congress as a direct tax. This uniform practical construction of the constitution touching so important a point, through so long a period, by the legislative and executive departments of the government, though not conclusive, is a consideration of great weight.' Allluding to the observations by one of the judges in the Hylton Case as to the evils of an apportioned tax on specific personal property, he said: 'It was well held that, where such evils would attend the apportionment of a tax, the constitution could not have intended that an apportionment should be made. This view applies with even greater force to the tax in question in this case. Where the population is large, and the incomes are few and small, it would be intolerably oppressive.' After examining the cases above cited, he concludes, speaking for the entire court: 'All these cases are undistinguishable in principle from the case now before us, and they are decisive against the plaintiff in error. The question, what is a direct tax? is one exclusively in American Jurisprudence. The text writers of the country are in entire accord upon the subject. Mr. Justice Story says [158 U.S. 601, 658]   that all taxes are usually divided into two classes,-those which are direct, and those which are indirect,-and that 'under the former denomination are included taxes on land or real property, and, under the latter, taxes on consumption. 1 Story, Const. 950. Chancellor Kent, speaking of the case of Hylton v. U. S., says: 'The better opinion seems to be that the direct taxes contemplated by the constitution were only two, viz. a capitation or poll tax and a tax on land.' 1 Kent, Comm. 257. See, also, Cooley, Tax'n, p. 5, note 2; Pom. Const. Law, 157; Shar. Bl. Comm. 308, note; Rawle, Const. 30; Serg. Const. Law, 305. We are not aware that any writer, since Hylton v. U. S. was decided, has expressed a view of the subject different from that of these authors. Our conclusions are that 'direct taxes,' within the meaning of the constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate, and that the tax of which the plaintiff in error complains is within the category of an excise or duty.'

One additional authority may be cited,-Clarke v. Sickel, reported in 14 Int. Rev. Rec. 6, Fed. Cas. No. 2,862, and referred to in the opinion of this court in Scholey v. Rew. It was decided by Mr. Justice Strong at the circuit in 1871. That case involved the validity of a tax on income derived from an annuity bequeathed by the will of the plaintiff's husband, and charged (as the record of that case shows) upon his entire estate, real and personal. The eminent jurist who decided the case said: 'The pleadings in all those cases raise the question whether the act of congress of June 30, 1864, and its supplements, far as they impose a tax upon the annual gains, profits, or income of every person residing in the United States, or of any citizen of the United States residing abroad, are within the power conferred by the constitution upon congress. If it be true, as has been argued, that the income tax is a 'capitation or other direct tax,' within the meaning of the constitution, it is undoubtedly prohibited by the first and ninth sections of the first article, for it is not 'apportioned among the states.' But I am of opinion that it is not a 'capitation or other direct tax,' in the sense in which the [158 U.S. 601, 659]   framers of the constitution, and the people of the states who adopted it, understood such taxes.' The significance of this language is manifest when the fact is recalled that the act of 1864 provided, among other things, that (with certain specified exceptions) there should be levied, collected, and paid annually upon the annual gains, profits, or income of every person residing in the United States, or of any citizen of the United States residing abroad, whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation, carried on in the United States or elsewhere, or from any other source whatever. 13 Stat. 281, 285, c. 173.

From this history of legislation and of judicial decisions, it is manifest:

That in the judgment of the members of this court, as constituted when the Hylton Case was decided (all of whom were statesmen and lawyers of distinction; two, Wilson and Paterson, being recognized as great leaders in the convention of 1787), the only taxes that could certainly be regarded as direct taxes, within the meaning of the constitution, were capitation taxes and taxes on lands.

That in their opinion a tax on real estate was properly classified as a direct tax, because, in the words of Justice Iredell, it was 'a tax on something inseparably annexed to the soil,' 'something capable of apportionment,' though, in the opinion of Mr. Justice Paterson, apportionment even of a tax on land was 'scarcely practicable.'

That while the Hylton Case did not, in terms, involve a decision in respect of lands, what was said by the judges on the subject was not, strictly speaking, obiter dicta, because the principle or rule that would determine whether a tax on carriages was a direct tax would necessarily indicate whether a tax on lands belonged to that class.

That, in the judgment of all the judges in the Hylton Case, no tax was a direct one that could not be apportioned among the states, on the basis of numbers, with some approach to justice and equality among the people of the several states who owned the property or subject taxed, for the reason, in [158 U.S. 601, 660]   the words of Mr. Justice Chase, that the framers of the constitution cannot be supposed to have contemplated taxation by a rule that 'would evidently create great inequality and injustice'; or, in the words of Mr. Justice Paterson, would be 'absurd and inequitable'; or, in the words of Mr. Justice Iredell, would lead, if practiced, to 'dangerous consequences,' and be 'altogether destructive of the notion of a common interest, upon which the very principles of the constitution are founded.'

That by the judgment in the Hylton Case a tax on specific personal property, owned by the taxpayer, and used or let to hire, was not a direct tax, to be apportioned among the states on the basis of numbers.

That from the foundation of the government, until 1861, congress, following the declarations of the judges in the Hylton Case, restricted direct taxation to real estate and slaves, and in 1861 to real estate exclusively, and has never, by any statute, indicated its belief that personal property, however assessed or valued, was the subject of 'direct taxes' to be appointioned among the states.

That by the above two acts of January 18, 1815, the validity of which has never been questioned, congress, by laying duties, according to the rule of uniformity, upon the numerous ari cles of personal property mentioned in those acts, indicated its belief that duties on personal property were not direct taxes, to be apportioned among the states on the basis of numbers, but were duties to be laid by the rule of uniformity, and without regard to the population of the respective states.

That, in 1861 and subsequent years, congress imposed, without apportionment among the states on the basis of numbers, but by the rule of uniformity, duties on income derived from every kind of property, real and personal, including income derived from rents, and from trades, professions, and employments, etc. And lastly--

That upon every occasion when it has considered the question whether a duty on incomes was a direct tax, within the meaning of the constitution, this court has, without a dissent- [158 U.S. 601, 661]   ing voice, determined it in the negative, always proceeding on the ground that capitation taxes and taxes on land were the only direct taxes contemplated by the framers of the constitution.

The view I have given of Hylton v. U. S. is sustained by Mr. Justice Story's statement of the grounds upon which the court proceeded in that case. He says: 'The grounds of this decision, as stated in the various opinions of the judges, were-First, the doubt whether any taxes were direct, in the sense of the constitution, but capitation and land taxes, as has been already suggested; secondly, that in cases of doubt the rule of apportionment ought not to be favored, because it was matter of compromise, and in itself radically indefensible and wrong; thirdly, the monstrous inequality and injustice of the carriage tax, if laid by the rule of apportionment, which would show that no tax of this sort could have been contemplated by the convention as within the rule of apportionment; fourthly, that the terms of the constitution were satisfied by confining the clause respecting direct taxes to capitation and land taxes; fifthly, that, accurately speaking, all taxes on expenses or consumption are indirect taxes, and a tax on carriages is of this kind; and, sixthly (what is probably of most cogency and force, and, of itself, decisive), that no tax could be a direct one, in the sense of the constitution, which was not capable of apportionment according to the rule laid down in the constitution.' 1 Story, Const. 705, 956.

If the above summary as to the practice of the government, and the course of decision in this court, fairly states what was the situation, legislative and judicial, at the time the suits now before us were instituted, it ought not to be deemed necessary, in determining a question which this court has said was 'exclusively in American jurisprudence,' to ascertain what were the views and speculations of European writers and theorists in respect of the nature of taxation, and the principles by which taxation should be controlled, nor as to what, on merely economic or scientific grounds, and under the systems of government prevailing in Europe, should be deemed direct [158 U.S. 601, 662]   taxes, and what indirect taxes. Norought this court to be embarrassed by the circumstance that statesmen of the early period of our history differed as to the principles or methods of national taxation, or as to what should be deemed direct taxes to be apportioned among the states, and what indirect taxes, duties, imposts, and excises, that must be laid by some rule of uniformity applicable to the whole country, without reference to the relative population of particular states. Undoubtedly, as already observed, Madison was of opinion that a tax on carriages was a direct tax, within the meaning of the constitution, and should be apportioned among the states on the basis of numbers. But this court, in the Hylton Case, rejected his view of the constitution, sustained that of Hamilton; and subsequently Madison, as president, approved acts of congress imposing taxes upon personal property without apportioning the same among the states. The taxes which, in the opinion of Hamilton, ought to be apportin ed among the states, were not left by him in doubt, for, in a draft of the constitution prepared by him in 1787, it was provided that 'taxes on lands, houses, and other real estate, and capitation taxes, shall be proportioned in each state by the whole number of free persons, except Indians not taxed, and by three-fifths of all other persons.' 2 Hamilton, Works, p. 406, art. 7, 4. The practice of a century, in harmony with the decisions of this court, under which uncounted millions have been collected by taxation, ought to be sufficient to close the door against further inquiry, based upon the speculations of theorists, and the varying opinions of statesmen who participated in the discussions, sometimes very bitter, relating to the form of government to be established in place of the articles of confederation, under which, it has been well said, congress could declare everything and do nothing.

But this view has not been accepted in the present cases, and the questions involved in them have been examined just as if they had not been settled by the long practice of the government, as well as by judicial decisions covering the entire period since 1796, and giving sanction to that practice. It seems to me that the court has not given to the maxim of stare decisis [158 U.S. 601, 663]   the full effect to which it is entitled. While obedience to that maxim is not expressly enjoined by the constitution, the principle that decisions resting upon a particular interpretation of that instrument should not be lightly disregarded, where such interpretation has been long accepted and acted upon by other branches of the government and by the public, underlies our American jurisprudence. There are many constitutional questions which were earnestly debated by statesmen and lawyers in the early days of the republic. But, having been determined by the judgments of this court, they have ceased to be the subjects of discussion. While, in a large sense, constitutional questions may not be considered as finally settled, unless settled rightly, it is certain that a departure by this court from a settled course of decisions on grave constitutional questions, under which vast transactions have occurred, and under which the government has been administered during great crises, will shake public confidence in the stability of the law.

Since the Hylton Case was decided this country has gone through two great wars, under legislation based on the principles of constitutional law previously announced by this court. The recent Civil War, involving the very existence of the nation, was brought to a successful end, and the authority of the Union restored, in part, by the use of vast amounts of money raised under statutes imposing duties on incomes derived from every kind of property, real and personal, not by the unequal rule of apportionment among the states on the basis of numbers, but by the rule of uniformity, operating upon individuals and corporations in all the states. And we are now asked to declare-and the judgment this day rendered in effect declares-that the enormous sums thus taken from the people, and so used, were taken in violation of the supreme law of the land. The supremacy of the nation was re-established against armed rebellion seeking to destroy its life, but it seems that that consummation, so devoutly wished, and to effect which so many valuable lives were sacrificed, was attended with a disregard of the constitution by which the Union was ordained. [158 U.S. 601, 664]   The policy of the government in the matter of taxation for its support, as well as the decisions of this court, have been in harmony with the views expressed by Oliver Ellsworth before he became the chief justice of this court. In the Connecticut convention of 1788, when considering that clause of the proposed constitution giving congress power to lay and collect taxes, duties, imposts, and excises, in order to pay the debts and provide for the common defense and general welfare of the United States, that far-seeing statesman-e cond to none of the Revolutionary period, and whom John Adams declared to be the firmest pillar of Washington's administration in the senate-said: 'The first objection is that this clause extends to all the objects of taxation.' 'The state debt, which now lies heavy upon us, arose from the want of powers in the federal system. Give the necessary powers to the national government, and the state will not be again necessitated to involve itself in debt for its defense in war. It will lie upon the national government to defend all the states,-to defend all its members from hostile attacks. The United States will bear the whole burden of war. It is necessary that the power of the general legislature should extend to all the objects of taxation; that government should be able to command all the resources of the country,-because no man can tell what our exigencies may be. Wars have now become rather wars of the purse than of the sword. Government must therefore be able to command the whole power of the purse; otherwise a hostile nation may look into our constitution, see what resources are in the power of government, and calculate to go a little beyond us. Thus they may obtain a decided superiority over us, and reduce us to the utmost distress. A government which can command but half its resources is like a man but with one arm to defend himself.' Fland. Chief Justices (2d Series) 150.

Let us examine the grounds upon which the decision of the majority rests, and look at some of the consequences that may result from the principles now announced. I have a deep, abiding conviction, which my sense of duty compels me to express, that it is not possible for this court to have [158 U.S. 601, 665]   rendered any judgment more to be regretted than the one just rendered.

Assuming it to be the settled construction of the constitution that the general government cannot tax lands, eo nomine, except by apportioning the tax among the states according to their respective numbers, does it follow that a tax on incomes derived from rents is a direct tax on the real estate from which such rents arise?

In my judgment, a tax on income derived from real property ought not to be, and until now has never been, regarded by any court as a direct tax on such property, within the meaning of the constitution. As the great mass of lands in most of the states do not bring any rents, and as incomes from rents vary in the different states, such a tax cannot possibly be apportioned among the states, on the basis merely of numbers, with any approach to equality of right among taxpayers, any more than a tax on carriages or other personal property could be so apportioned. And in view of former adjudications, beginning with the Hylton Case, and ending with the Springer Case, a decision now that a tax on income from real property can be laid and collected only by apportioning the same among the states on the basis of numbers may not improperly be regarded as a judicial revolution that may sow the seeds of hate and distrust among the people of different sections of our common country.

The principal authorities relied upon to prove that a tax on rents is a direct tax on the lands from which such rents are derived are the decisions of this court holding that the states cannot, in any form, directly or indirectly, burden the exercise by congress of the powers committed to it by the constitution,2 and those which hold that the national government cannot, in any form, directly or indirectly, burden the agencies [158 U.S. 601, 666]   or instrumentalities employed by the states in the exercise of their powers. 3 No one of the cases of either class involved any question as to what were 'direct taxes,' within the meaning of the constitution. They were cases in which it was held that the governmental power in question could not be burdened or impaired at all, or in any mode, directly or indirectly, by the government that attempted to do so. Every one must concede that those cases would have been decided just as they were decided ift here were no provision whatever in the constitution relating to direct taxes, or to taxation in any other mode. All property in this country, except the property and the agencies and instrumentalities of the states, may be taxed, in some form, by the national government in order to pay the debts and provide for the common defense and general welfare of the United States; some, by direct taxation apportioned among the states on the basis of numbers; other kinds, by duties, imposts, and excises, under the rule of uniformity applicable throughout the United States to individuals and corporations, and without reference to population in any state. Decisions, therefore, which hold that a state can neither directly nor indirectly obstruct the execution by the general government of the powers committed to it, nor burden with taxation the property and agencies of the United States, and decisions that the United States can neither directly nor indirectly burden nor tax the property or agencies of the state, nor interfere with the governmental powers belonging to the states, do not even tend to establish the proposition that a duty which, by its indirect operation, may affect the value of the use of particular property, is a direct tax on such property, within the meaning of the constitution.

In determining whether a tax on income from rents is a direct tax, within the meaning of the constitution, the inquiry is not whether it may in some way indirectly affect the land or the landowner, but whether it is a direct tax on the thing [158 U.S. 601, 667]   taxed,-the land. The circumstance that such a tax may possibly have the effect to diminish the value of the use of the land is neither decisive of the question, nor important. While a tax on the land itself, whether at a fixed rate applicable to all lands, without regard to their value, or by the acre, or according to their market value, might be deemed a direct tax, within the meaning of the constitution, as interpreted in the Hylton Case, a duty on rents is a duty on something distinct and entirely separate from, although issuing out of, the land.

At the original hearing of this cause, we were referred on this point to the statement by Coke to the effect that: 'If a man seised of land in fee by his deed granteth to another the profits of those lands, to have and to hold to him and his heirs, and maketh livery secundum formam chartae, the whole land itself doth pass. For what is the land but the profits thereof? for thereby vesture, herbage, trees, mines, all whatsoever parcel of that land, doth pass. Co. Litt. 45.' (4b.)

Of course, a grant, without limitation as to time, to a particular person and his heirs, of the profits of certain lands, accompanied by livery of seisin, would be construed as passing the lands themselves, unless a different interpretation were required by some statute. In this connection, 1 Jarm. Wills (5th Ed.) 798, is cited in support of the general proposition that a devise of the rents and profits or of the income of lands passes the land itself, both at law and equity. But the editor, after using this language, adds: 'And since the act 1 Vict. c. 26, such a devise carries a fee simple; but before that act it carried no more than an estate for life, unless words of inheritance were added.' Among the authorities cited by the editor in reference to devises of the incomes of lands are Humphrey v. Humphrey, 1 Sim. (N. S.) 53, 540, and Mannox v. Greener, L. R. 14 Eq. 456, 462. In the first of those cases the court held that 'an unlimited gift of the income of a fund' passed the capital; in the other, that 'a gift of the income of the land, unrestricted, is simply a gift of the fee simple of the land.' So, in Fox v. Phelps, 17 Wend. 393, 402, Justice Bronson, speaking for the court, said: 'An [158 U.S. 601, 668]   unlimited disposition of rents and profits or income of an estate will sometimes carry the estate itself. Kerry v. Derrick, Cro. Jac. 104; Phillips v. Chamberlaine, 4 Ves. 51. In Newland v. Shephard, 2 P. Wms. 194, a devise of the produce and interest of the estate to certain grandchildren for a limited period was held to pass the estate itself. But the authority of this case was denied by Lord Hardwicke in Fonnereau v. Fonnereau, 3 Atk. 316. The rule cannot apply where, as in this case, the rents and profits are only given for a limited period. Earl v. Grim, 1 Johns. Ch. 494.' But who will say that a devise of rent already due, or profits already earned, is a devise of the land itself? Or who would say that a devise of rents, profits, or income of land for any period expressly limited, would pass the fee or the ownership of the land itself? The statute under examination in these causes expires by its own terms at the end of five years. It imposes an annual tax on the income of lands received the preceding year. It does not touch the lands themselves, nor interfere with their sale at the pleasure of the owner. It does not apply to lands from which no rent is derived. It gives no lien upon the lands to secure the payment of the duty laid on rents that may accrue to the landlord from them. It does not apply to rents due and payable by contract, and not collected, but only to such as are received by the taxpayer. But whether a grant or devise, with or without limitation or restriction, as to time, of the rents and profits or of the income of land, passes the land itself, is wholly immaterial in the present causes. We are dealing here with questions relating to taxation for public purposes of income from rents, and not with any question as to the passing of title, by deed or will, to the real estate from which such rents may arise.

It has been well observed, on behalf of the government, that rents have nothing in common with land; that taking wrongful possession of land is trespass, while the taking of rent may, under some circumstances, be stealing; that the land goes to the heir, while the rent money goes to the personal representative; one has a fixed situs, while the other may be determined by law, but generally is that of the owner; [158 U.S. 601, 669]   that one is taxed, and can be taxed only, by the sovereignty within which it lies, while the other may be taxed, and can be taxed only, by the sovereignty under whose dominion the owner is; that a tax on land is generally a lien on the land, while that on personalty almost universally is not; and that, in their nature, lands and rents arising from land have not a single attribute in common. A tax on land reaches the land itself, whether it is rented or not. The citizen's residence may be reached by a land tax, although he derives no rent from it. But a duty on rents will not reach him, unless he rents his residence to some one else, and receives the rent. A tax with respect to the money that a landlord receives for rent is personal to him, because it relates to his revenue from a designated source, and does not, in any sense,-unless it be otherwise provide