Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895)

Author: Justice White

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Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895)

MR. JUSTICE WHITE dissenting.

I deem it unnecessary to elaborate my reasons for adhering to the views hitherto expressed by me, and content myself with the following statement of points:

1st. The previous opinion of the court held that the inclusion of rentals from real estate in income subject to taxation laid a direct tax on the real estate itself, and was, therefore, unconstitutional and void unless apportioned. From this position I dissented on the ground that it overthrew the settled construction of the Constitution, as applied in one hundred years of practice, sanctioned by the repeated and unanimous decisions of this court and taught by every theoretical and philosophical writer on the Constitution who has expressed an opinion upon the subject.

2d. The court, in its present opinion, considers that the Constitution requires it to extend the former ruling yet further, and holds that the inclusion of revenue from personal property in an income subjected to taxation amounts to imposing a direct tax on the personal property, which is also void unless apportioned. As a tax on income from real and personal property is declared to be unconstitutional unless apportioned, because it is equivalent to a direct tax on such property, it follows that the decision now rendered holds not only that the rule of apportionment must be applied to an income tax, but also that no tax, whether direct or indirect, on either real and personal property or investments can be levied unless by apportionment. Everything said in the dissent from the previous decision applies to the ruling now announced, which, I think, aggravates and accentuates the court’s departure from the settled construction of the Constitution.

3d. The court does not now, except in some particulars, review the reasoning advanced in support of its previous conclusion, and therefore the opinion does not render it necessary for me to do more than refer to the views expressed in my former dissent, as applicable to the position now taken and then to briefly notice the new matter advanced.

4th. As, however, on the rehearing, the issues have been elaborately argued, I deem it also my duty to state why the reargument has in no way shaken, but, on the contrary, has strengthened, the convictions hitherto expressed.

5th. The reasons urged on the reargument seem to me to involve a series of contradictory theories:

a. Thus, in answering the proposition that United States v. Hylton and the cases which followed and confirmed it have settled that the word "direct," as used in the Constitution, applies only to capitation taxes and taxes on land, it is first contended that this claim is unfounded, and that nothing of the kind was so decided, and it is then argued that "a century of error" should furnish no obstacle to the reversal by this court of a continuous line of decisions interpreting the constitutional meaning of that word, if such decisions be considered wrong. Whence the "century of error" is evolved, unless the cases relied on decided that the word "direct" was not to be considered in its economic sense, does not appear from the argument.

b. In answer to the proposition that the passage of the carriage tax act and the decision in the Hylton case which declared that act constitutional involved the assumption that the word "direct" in the Constitution was to be considered as applying only to a tax on land and capitation, it is said that this view of the act and decision is faulty, and, therefore, the inference deduced from it is erroneous. At the same time, reference is made to the opinion of Mr. Madison that the carriage tax act was passed in violation of the Constitution, and hence that the decision which held it constitutional was wrong. How that distinguished statesman could have considered that the act violated the Constitution, and how he could have regarded the decision which affirmed its validity as erroneous, unless the act and decision were not in accord with his view of the meaning of the word "direct" the argument also fails to elucidate.

6th. Attention was previously called to the fact that practically all the theoretical and philosophical writers on the Constitution since the carriage tax act was passed and the Hylton case was decided have declared that the word "direct" in the Constitution applies only to taxes on land and capitation taxes. The list of writers formerly referred to, with the addition of a few others not then mentioned, includes Kent, Story, Cooley, Miller, Bancroft, the historian of the Constitution, Pomeroy, Hare, Burroughs, Ordroneaux, Black, Farrar, Flanders, Bateman, Patterson, and Von Holst. How is this overwhelming consensus of publicists, of law writers, and historians answered? By saying that their opinions ought not to be regarded because they were all misled by the dicta in the Hylton case into teaching an erroneous doctrine. How, if the Hylton case did not decide this question of direct taxation, it could have misled all these writers -- among them some of the noblest and brightest intellects which have adorned our national life -- is not explained. In other words, in order to escape the effect of the act and of the decision upon it, it is argued that they did not, by necessary implication, establish that direct taxes were only land and capitation taxes, and, in the same breath, in order to avoid the force of the harmonious interpretation of the Constitution by all the great writers who have expounded it, we are told that their views are worthless because they were misled by the Hylton case.

7th. If, as is admitted, all these authors have interpreted the Hylton case as confining direct taxes to land and capitation taxes, I submit that their unanimity, instead of affording foundation for the argument that they were misled by that case, furnishes a much better and safer guide as to what its decision necessarily implied than does the contention now made, unless we are to hold that all these great minds were so feeble as to be led into concluding that the case decided what it did not decide, and unless we are to say that the true light in regard to the meaning of this word "direct" has come to no writer or thinker from that time until now.

8th. Whilst it is admitted that, in the discussions at the bar of this court in years past, when the previous cases were before it, copious reference was made to the lines of authority here advanced, and that nothing new is now urged, we are, at the same time, told that, strange as it may seem, the sources of the Constitution have been "neglected" up to the present time, and this supposed neglect is asserted in order to justify the overthrow of an interpretation of the Constitution concluded by enactments and decisions dating from the foundation of the government. How this neglect of the sources of the Constitution in the past is compatible with the admission that nothing new is here advanced is not explained.

9th. Although the opinions of Kent, Story, Cooley, and all the other teachers and writers on the Constitution are here disregarded in determining the constitutional meaning of the word "direct," the opinions of some of the same authors are cited as conclusive on other questions involved in this case. Why the opinions of these great men should be treated a "worthless" in regard to one question of constitutional law, and considered conclusive on another, remains to be discovered.

10th. The same conflict of positions is presented in other respects. Thus, in support of various views upon incidental questions, we are referred to many opinions of this court as conclusive, and, at the same time, we are told that all the decisions of this court from the Hylton case down to the Springer case in regard to direct taxation are wrong if they limit the word "direct" to land and capitation, and must, therefore, be disregarded, because "a century of error" does not suffice to determine a question. How the decisions of this court settling one principle are to be cited as authority for that principle and, at the same time, it is to be argued that other decisions, equally unanimous and concurrent, are no authority for another principle involves a logical dilemma which cannot be solved.

11th. In dissenting before, it was contended that the passage of the carriage tax act and the decision of this court thereon had been accepted by the Legislative and Executive branches of the government from that time to this, and that this acceptance had been manifested by conforming all taxes thereafter imposed to the rule of taxation thus established. This is answered by saying that there was no such acceptance, because the mere abstention from the exercise of a power affords no indication of an intention to disown the power. The fallacy here consists in confusing action with inaction. It was not reasoned in the previous dissent that mere inaction implied the lack of a governmental power, but that the definitive action in a particular way, when construed in connection with the Hylton decision, established a continuous governmental interpretation.

12th. Whilst denying that there has been any rule evolved from the Hylton case and applied by the government for the past hundred years, it is said that the results of that case were always disputed when enforced. How there could be no rule, and yet the results of the rule could be disputed, is likewise a difficulty which is not answered.

13th. The admission of the dispute was necessitated by the statement that when, in 1861, it was proposed to levy a direct tax, by apportionment, on personal property, a committee of the House of Representatives reported that, under the Hylton case, it could not be done. This fact, if accurately stated, furnishes the best evidence of the existence of the rule which the Hylton case had established, and shows that the decision now made reverses that case, and sustains the contention of the minority who voted against the carriage tax act, and whose views were defeated in its passage and repudiated in the decision upon it, and have besides been overthrown by the unbroken history of the government and by all the other adjudications of this court confirming the Hylton case.

14th. The decision here announced, holding that the tax on the income from real estate and the tax on the income from personal property and investments are direct, and therefore require apportionment, rests necessarily on the proposition that the word "direct" in the Constitution must be construed in the economic sense; that is to say, whether a tax be direct or indirect is to be tested by ascertaining whether it is capable of being shifted from the one who immediately pays it to an ultimate consumer. If it cannot be so shifted, it is direct; if it can be, it is indirect. But the word in this sense applies not only to the income from real estate and personal property, but also to business gains, professional earnings, salaries, and all of the many sources from which human activity evolves profit or income without invested capital. These latter the opinion holds to be taxable without apportionment, upon the theory that taxes on them are "excises," and therefore do not require apportionment according to the previous decisions of this court on the subject of income taxation. These decisions, Hylton v. United States, 3 Dall. 171; Pacific Insurance Co. v. Soule, 7 Wall. 433; Veazie Bank v. Fenno, 8 Wall. 533; Scholey v. Rew, 23 Wall. 331; Springer v. United States, 102 U.S. 586, hold that the word "direct" in the Constitution refers only to direct taxes on land, and therefore has a constitutional significance wholly different from the sense given to that word by the economists. The ruling now announced overthrows all these decisions. It also subverts the economic signification of the word "direct" which it seemingly adopts. Under that meaning, taxes on business gains, professional earnings, and salaries are as much direct, and, indeed, even more so, than would be taxes on invested personal property. It follows, I submit, that the decision now rendered accepts a rule and at once in part overthrows it. In other words, the necessary result of the conclusion is to repudiate the decision of this court, previously rendered, on the ground that they misinterpreted the word "direct" by not giving it its economic sense, and then to decline to follow the economic sense because of the previous decisions. Thus, the adoption of the economic meaning of the word destroys the decisions, and they, in turn, destroy the rule established. It follows, it seems to me, that the conclusion now announced rests neither upon the economic sense of the word "direct" or the constitutional significance of that term. But it must rest upon one or the other to be sustained. Resting on neither, it has, to my mind, no foundation in reason whatever.

15th. This contradiction points in the strongest way to what I conceive to be the error of changing, at this late day, a settled construction of the Constitution. It demonstrates, I think, how conclusively the previous cases have determined every question involved in this, and shows that the doctrine cannot be now laid down that the word "direct" in the Constitution is to be interpreted in the economic sense, and be consistently maintained.

16th. The injustice of the conclusion points to the error of adopting it. It takes invested wealth and reads it into the Constitution as a favored and protected class of property, which cannot be taxed without apportionment, whilst it leaves the occupation of the minister, the doctor, the professor, the lawyer, the inventor, the author, the merchant, the mechanic, and all other forms of industry upon which the prosperity of a people must depend subject to taxation without that condition. A rule which works out this result, which, it seems to me, stultifies the Constitution by making it an instrument of the most grievous wrong, should not be adopted, especially when, in order to do so, the decisions of this court, the opinions of the law writers and publicists, tradition, practice, and the settled policy of the government must be overthrown.

17th. Nor is the wrong which this conclusion involves mitigated by the contention that the doctrine of apportionment, now here applied to indirect as well as direct taxes on all real estate and invested personal property, leaves the government with ample power to reach such property by taxation, and make it bear its just part of the public burdens. On the contrary, instead of doing this, it really deprives the government of the ability to tax such property at all, because the tax, it is now held, must be imposed by the rules of apportionment according to population. The absolute inequality and injustice of taxing wealth by reference to population and without regard to the amount of the wealth taxed are so manifest that this system should not be extended beyond the settled rule which confines it to direct taxes on real estate. To destroy the fixed interpretation of the Constitution by which the rule of apportionment according to population is confined to direct taxes on real estate so as to make that rule include indirect taxes on real estate and taxes, whether direct or indirect, on invested personal property, stocks, bonds, etc. reads into the Constitution the most flagrantly unjust, unequal, and wrongful system of taxation known to any civilized government. This strikes me too clear for argument. I can conceive of no greater injustice than would result from imposing on one million of people in one State, having only ten millions of invested wealth, the same amount of tax as that imposed on the like number of people in another State having fifty times that amount of invested wealth. The application of the rule of apportionment by population to invested personal wealth would not only work out this wrong, but would ultimately prove a self-destructive process, from the facility with which such property changes its situs. If so taxed, all property of this character would soon be transferred to the States where the sum of accumulated wealth was greatest in proportion to population, and where therefore the burden of taxation would be lightest, and thus the mighty wrong resulting from the very nature of the extension of the rule would be aggravated. It is clear then, I think, that the admission of the power of taxation in regard to invested personal property, coupled with the restriction that the tax mast be distributed by population, and not by wealth, involves a substantial denial of the power itself, because the condition renders its exercise practically impossible. To say a thing can only be done in a way which must necessarily bring about the grossest wrong is to delusively admit the existence of the power while substantially denying it. And the grievous results sure to follow from any attempt to adopt such system are so obvious that my mind cannot fail to see that if a tax on invested personal property were imposed by the rule of population, and there were no other means of preventing its enforcement, the red spectre of revolution would shake our institutions to their foundation.

18th. This demonstrates the fallacy of the proposition that the interpretation of the Constitution now announced concedes to the national government ample means to sustain itself by taxation in an extraordinary emergency. It leaves only the tariff or impost, excise taxation, and the direct or indirect taxes on the vital energies of the country, which, as I have said, the opinion now holds are not subject to the rule of apportionment. In case of foreign war, embargo, blockade, or other international complications, the means of support from tariff taxation would disappear; none of the accumulated invested property of the country could be reached, except according to the impracticable rule of apportionment, and even indirect taxation on real estate would be unavailable, for the opinion now announces that the rule of apportionment applies to an indirect as well as a direct tax on such property. The government would thus be practically deprived of the means of support.

19th. The claim that the States may pay the amount of the apportioned tax and thus save the injustice to their citizens resulting from its enforcement, does not render the conclusion less hurtful. In the first place, the fact that the State may pay the sum apportioned in no way lessens the evil, because the tax, being assessed by population and not by wealth, must, however paid, operate the injustice which I have just stated. Moreover, the contention that a State could by payment of the whole sum of a tax on personal property, apportioned according to population, relieve the citizen from grievous wrong to result from its enforcement against his property, is an admission that the collection of such tax against the property of the citizen, because of its injustice, would be practically impossible. If substantially impossible of enforcement against the citizen’s property, it would be equally so as against the State, for there would be no obligation on the State to pay, and thus there would be no power whatever to enforce. Hence, the decision now rendered, so far as taxing real and personal property and invested wealth is concerned, reduces the government of the United States to the paralyzed condition which existed under the Confederation, and to remove which the Constitution of the United States was adopted.

20th. The suggestion that, if the construction now adopted by the court brings about hurtful results, it can be cured by an amendment to the Constitution, instead of sustaining the conclusion reached, shows its fallacy. The Hylton case was decided more than one hundred years ago. The income tax laws of the past were enacted also years ago. At the time they were passed, the debates and reports conclusively show that they were made to conform to the rulings in the Hylton case. Since all thee things were done, the Constitution has been repeatedly amended. These amendments followed the civil war, and were adopted for the purpose of supplying defects in the national power. Can it be doubted that, if an intimation had been conveyed that the decisions of this court would or could be overruled, so as to deprive the government of an essential power of taxation, the amendments would have rendered such a change of ruling impossible? The adoption of the amendments, none of which repudiated the uniform policy of the government, was practically a ratification of that policy and an acquiescence in the settled rule of interpretation theretofore adopted.

21st. It is, I submit, greatly to be deplored that, after more than one hundred years of our national existence, after the government has withstood the strain of foreign wars and the dread ordeal of civil strife, and its people have become united and powerful, this court should consider itself compelled to go back to a long repudiated and rejected theory of the Constitution by which the government is deprived of an inherent attribute of its being, a necessary power of taxation.


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Chicago: White, "White, J., Dissenting," Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895) in 158 U.S. 601 158 U.S. 707–158 U.S. 715. Original Sources, accessed October 4, 2022, http://www.originalsources.com/Document.aspx?DocID=LIL489ECT93Y9YP.

MLA: White. "White, J., Dissenting." Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895), in 158 U.S. 601, pp. 158 U.S. 707–158 U.S. 715. Original Sources. 4 Oct. 2022. http://www.originalsources.com/Document.aspx?DocID=LIL489ECT93Y9YP.

Harvard: White, 'White, J., Dissenting' in Pollock v. Farmers’ Loan & Trust Company, 158 U.S. 601 (1895). cited in 1895, 158 U.S. 601, pp.158 U.S. 707–158 U.S. 715. Original Sources, retrieved 4 October 2022, from http://www.originalsources.com/Document.aspx?DocID=LIL489ECT93Y9YP.