The Constitution provides that capitation and other direct taxes levied by Congress shall be apportioned among the States in proportion to their respective populations. In a number of instances the constitutionality of federal taxes not thus apportioned has been questioned upon the ground that they were, within the constitutional meaning of the word, direct taxes. The decision of the Supreme Court in each of these cases in which this point has been raised has supplied an authoritative determination only as to the direct or indirect character of the particular taxes in ques tion. From these decisions, however, a judicial definition of direct taxes may be drawn which makes the term include all taxes levied upon property, real or personal, or upon the income derived from such property, and all capitation or poll taxes. A review of the cases will show that only within recent years has the court been willing to adopt this comprehensive definition, and, when it finally did so, the decision came as a surprise to very many of the lawyers and courts of the country.

67 Four justices dissented. They say: "Here, the small duty imposed, without reference to the kind, quality, or value of the articles exported, renders it certain that when Congress imposed such duty specifically on the vellum, parchment, or paper upon which the bill of lading was written or printed, it meant what is so plainly said; and no ground exists to impute a purpose by indirection to tax the articles exported." The dissenting justices also urge that the practice of the government for more than a century should be held controlling.

68 192 U. S. 418; 24 Sup. Ct. Rep. 383; 48 L. ed. 504.

69 Two justices dissented, holding that inasmuch as there was no appreciable interval of time between the commencement of manufacture and the preparation for exportation, it could not be reasonably said that the articles had become a part of the general mass of property in the locality of manufacture, and as such subject to a tax that could be distinguished from a tax upon the articles as subject of export.

70 For a discussion of direct taxes with reference to the Territories and the District of Columbia, see Chapter XXVI (The District Of Columbia. 162. The Government Of The District Of Columbia).

In 1798 in Hylton v. United States71 it was held that a tax on carriages was not a direct tax. Chase in his opinion said: "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 to be laid by that rule. ... 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 regard to property, profession, or any other circumstance; and a tax on land."

Paterson in his opinion said: "Whether direct taxes, in the sense of the Constitution, comprehend any other tax, than a capitation tax and a tax on land, is a questionable point. If Congress, for instance, should tax, in the aggregate or mass, things that generally pervade all the States in the Union, then, perhaps, the rule of apportionment would be the most proper, especially if an assessment was to intervene. This appears from the practice of some of the States to have been considered as a direct tax. Whether it be so, under the Constitution of the United States, is a matter of some difficulty; but as it is not before the court, it would be improper to give any decisive opinion upon it. 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."

71 3 Dall. 171; 1 L. ed. 556.

Iredell, in his opinion, said: "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."

In Pacific Insurance Co. v. Soule72 a tax on receipts of insurance companies was held to be not a direct tax, the dicta in Hylton v. United States being relied upon as authority.

In Veazie Bank v. Fenno73 a tax on the circulating notes of state banks was held to be an indirect tax.

In Scholey v. Rew74 a tax on succession to real estate was held indirect, the tax being declared to be one not on the land, but upon the right of succession. The court say: "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." 75

72 7 Wall. 433; 19 L. ed. 95.

73 8 Wall. 533; 19 L. ed. 482. 74 23 Wall. 331; 23 L. ed. 99.

75 Citing Ins. Co. v. Soule, 7 Wall. 433; 19 L. ed. 95; Veazie Bank v. Fenno, 8 Wall. 533; 19 L. ed. 482.

In Springer v. United States76 the income taxes provided for by the law of 1862 were held not to be direct taxes. After enumerating the various direct taxes previously levied, the court say: "It will thus be seen that wherever the government has imposed a tax which it recognized as a direct tax, it has never been applied to any objects but real estate and slaves. The latter application may be accounted for upon two grounds: 1. In some of the States slaves were regarded as real estate; and, 2, such an extension of the tax lessened the burden upon the real estate where slavery existed, while the result to the National Treasury was the same. . . . 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." After reviewing earlier cases and citing the opinions of leading commentators, the opinion concludes: "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."