Direct taxes within the meaning of the constitution are only capitation taxes and taxes on real estate ; Springer v. U. S., 102 U. S. 586.
It was held that the income tax law of 1894 was a direct tax and unconstitutional. The first decision left, the constitutional question in doubt, the court being equally divided ; Pollock v. Trust Co., 157 U. SI 429, 15 Sup. Ct. 673, 39 L. Ed. 759. On re-argument before a full court the decision was by a majority of one only. The points settled by the opin ion of the court were, substantially, these: Direct taxes must be apportioned among the several states in accordance with numbers. Taxes on real estate are direct taxes, and taxes on the rent or income of real estate are the same. Taxes on personal property or on the income of personal property are likewise direct taxes. The act of 1894, so far as it falls on the income of real estate and of per sonal property, is a direct tax on the proper ty and therefore void, because not apportion ed according to representation ; Pollock v. Trust Co., 158 U. S. 601, 15 Sup. Ct. 912, 39 L. Ed. 1108.
See infra as to the 16th amendment to the constitution and the Income Tax Act of Oct. 3, 1913.
Excise taxes have been repeatedly sustain ed by the courts: Thus, on the use of car riages ; Hylton v. U. S., 3 Dall. (U. S.) 171, 1 L. Ed. 556 ; on sales at exchanges or boards of trade ; Nicol -v. Ames, 173 U. S. 509, 19 Sup. Ct. 522, 43 L. Ed. 786; on the trans mission of property from the dead to the living ; Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969 ; on agreements to sell shares of stock denominated "calls" ; Treat v. White, 181 U. S. 264, 21 Sup. Ct. 611, 45 L. Ed. 853 ; on tobacco manufac tured for consumption (between the begin ning of manufacture and consumption); Pat ton v. Brady, 184 U. S. 608, 22 Sup. Ct. 493, 46 L. Ed. 713; on the sales of shares of stock ; Thomas v. U. S., 192 U. S. 363, 24 Sup. Ct. 305, 48 L. Ed. 481; on transfers of property intended to take effect in possession or en joyment at or after the death of the grantor ; Keeney v. Comptroller of New York, 222 U. S. 525, 32 Sup. Ct. 105, 56 L. Ed. 299; 38 L. R. A. (N. S.) 1139 ; on sugar refining; Spreck els S. R. Co. v. McClain, 192 U. S. 397, 24 Sup. Ct. 376, 48 L. Ed. 496 ; on conducting commercial agencies (unless its effect is to violate a federal statute, such as burdening interstate commerce) ; U. S. F. & G. Co. v. Kentucky, 231 U. S. 394, 34 Sup. Ct. 122, 58 L. Ed. 283. The internal revenue tax on the sale of liquor is not a tax on property or the profits of the business, but a charge on the busiriess; South Carolina v. U. S., 199 U. S. 437, 26 Sup. Ct. 110, 50 L. Ed. 261, 4 Ann. Cas. 737. The provision of the constitution that "all duties, imposts and excises shall be uniform throughout the United States" re fers purely to geographical uniformity, and is synonymous with the expression "operate generally throughout the United States ;"1 Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969. These words were used comprehensively to cover customs and ex ) cise duties on importations, consumption, manufacture and sale of certain commodi ties, privileges, particular business transac tions, vocations ; Thomas v. U. S., 192 U. S.
363, 24 Sup. Ct. 305, 48 L. Ed. 481.
Public Purpose. No tax is valid which is not laid for a public purpose; Citizens' S. & L. Ass'n v. Topeka, 20 Wall. (U. S.) 655, 22 L. Ed. 455, where it was said that there are limitations on the powers of the three branches of the government which grow out of the essential nature of all free govern ments-implied reservations of individual rights without which the social compact could not exist, and among these is that taxation must be for a public purpose; such are (ac cording to Cooley, Tax. 18) to preserve the Public order; to make compensation to pub lic officers, etc. ; to erect, etc., public build ings ; to pay the expenses of legislation, and of administering the laws, etc. ; also, to pro vide secular instruction ; Cooley, Tax., 2d,ed. 119-124; Kelly v. Pittsburgh, 104 U. S. 81, 26 L. Ed. 658; but not in a school founded by a charitable bequest, though a majority of the trustees were to be chosen (but from certain religious societies) by the inhabitants of the town ; Jenkins v. Andover, 103 Mass. 94. A town may tax itself for the erection of a state educational institution within its limits; Merrick v. Amherst, 12 Allen (Mass.) 500. The support of public charities is a public purpose, and money raised by taxa tion may be applied to private charitable in stitutions. Taxation for the purpose of giv ing or loaning money to private business en terprises is illegal ; Lowell v. Boston, 111 Mass. 454, 15 Am. Rep. 39. In some cases, governments have applied public funds to pay equitable claims (upon which no legal right exists), such as for the destruction of private property in war, or for loss incurred in a contract for the construction of a pub lic work ; Cooley, Tax. 91. Taxes may be levied for the construction and repair of canals, railroads, highways, roads, etc.; Coo ley, Tax. 94 ; Chicago, B. &. Q. R. Co. v. Otoe Co., 16 Wall. (U. S.) 667, 21 L. Ed. 375 ; Pine Grove Tp. v. Talcott, 19 Wall. (U. S.) 666, 22 L. Ed. 227; (Miller and Davis, JJ., dissenting in both of these last two cases ; see also the opinion, rendered by Miller, J., in Citizens' S. & L. Ass'n v. Topeka, 20 Wall. [U. S.] 655, 22 L. Ed. 455); and the construction of a free bridge in a city ; Philadelphia v. Field, 58 Pa. 320 ; and for the payment of the pub lic debt, if lawfully incurred ; and for pro tection against fire ; Kelly v. Pittsburgh, 104 U. S. 81, 26 L. Ed. 658. Taxation to provide municipal gas and water works is lawful ; Wells v. Atlanta, 43 Ga. 67 ; Van Sicklen v. Burlington, 27 Vt. 70; and for the preserva tion of the public health ; Western S. F. Soc. v. Philadelphia, 31 Pa. 175, 72 Am. Dec. 730 ; Cooley, Tax. 101. Municipalities may pay money by way of bounties to those who vol unteer as soldiers in time of actual or threat ened hostility ; Speer v. School Directors, 50 Pa. 150 ; but not to provide amusements for the people, or to celebrate the declaration of independence, etc. ; Hood v. Lynn, 1 Al len (Mass.) 103 ; Hodges v. Buffalo, 2 Den. (N. Y.) 110; the purchase and support of public parks is lawful; Cooley, Tax. 61, 129, 615.