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8 Wash. L. Rev. 81 (1933-1934)
Constitutionality of State Income Taxes

handle is hein.journals/washlr8 and id is 85 raw text is: CONSTITUTIONALITY OF STATE INCOME TAXES The constitutionality of state income taxation has been consid- ered by several courts with the result that some have held state income tax laws constitutional and some have held them unconsti- tutional. The courts which have passed upon the question have been confined to a consideration of the provisions of the consti- tution of the particular state and have held that such a tax is in conflict with the constitutional limitations or that such a tax is permissible as not being prohibited by the constitution. The deci- sion in each instance in which the income tax was held unconsti- tutional has been based upon the conclusion that an income tax is a property tax1 within the meaning of the term as used in the constitution under consideration. The Supreme Court of Wash- mgton has fallen in line with several jurisdictions in holding that collect the money due on the contract. Since the condition precedent here of getting taxi insurance was performed neither by D nor by N Co., but D thereafter accepted payments on the car, knowing that P had not waived the performance of the condition, D was held liable to P on the contract although D had neither expressly nor impliedly assumed in its contract with the assignor the duty of taking out this insurance. The court said that the appellant in accepting and exacting payments, assumed the cor- responding duty to perform the conditions the contract imposed as a con- sideration for their payment. It would not allow D to receive the ben- efits without performing the burdens. 'Cases holding that an income tax is not a property tax: Glasgow v. Rouse, 43 o. 479 (1869) Wanng v. Savaoinah, 60 Ga. 93 (1878) In re OpznonT of Justices, 77 N. H. 611, 93 Atl. 311 (1915) Ludlow Saylor Wire Co. v. Wollbrintck, 275 Mo. 339, 205 S. W 196 (1918) Hattiesburg Grocery Co. v. Robertson State Ra. Agent, 126 Miss. 34, 88 So. 4, 25 A. L. R. 748 (1921) Diefendorf 'v. Gallet, 10 Pac. (2d) 311 (Idaho 1932) O'Connell v. State Board of Equalization, 25 Pac. (2d) 114 (Mont. 1933). Cases holding income taxes to be property taxes: State v. Frear 148 Wis. 456, 134 N. W 673, 135 N. W 164, L. R. A. 1915 B. 569, 606 Ann. Cas. 1913 A. 1147 (1912). Since Wisconsin specifically provides for an income tax the statement by the court should not be given much weight as an authority holding income to be property. It would seem a more logical conclusion would be that Wisconsin recognizes an income tax as a sep- arate class of taxes, especially since the constitution provides for prop- erty taxes, excise taxes and income taxes. Opinion of the Justices, 220 Mass. 613, 108 N. E. 570 (1915) State v. Pinfer 30 Del. 416, 108 Atl. 43 (1919). We prefer to take the natural, logical and reasonable position that income is property, within the meaning of that word as used in the exemption clause, Sec. 1, Art. 8, of the Delaware Constitution, and we are inclined to believe that no court in this country today, in construing a constitutional provision similar to ours, would maintain the contrary position. The qualifying phrase within the meaning of that word as used in the exemption clause, Sec. 1, Art. 8, of the Delaware Constitution tempers the case and holding. The court clearly indicates that they are considering income as property only beause the word property mani- festly meant anything that was taxable under the inherent power of the legislature. Whether or not the justices would have reached the same result if they had been considering the nature of income tax generally, or under the Washington Constitution, is a question for conjecture. Eliasberg Bros. Mere. Co. -V. Grmes, 204 Ala. 492, 86 So. 56, 11 A. L. R. 300 (1920). The constitution of Alabama placed a limitation of 65/100 of 1 per cent on the value of the taxable property within the state. Here again the court was deciding that property as used in the state consti- tution was broad enough to include income taxes. The reasoning of the court is criticized by Mr. Harsch in 6 Wash. L. R. 97. In Barchrac, V. Nel- son, 182 N. E. 909 (I1. 1932), holding the tax to be a property tax the court says, money or anything of value acquired as gain or profit from capital or labor is property, and that, in the aggregate these acquisitions constitute income, and, in accordance with the axiom that the whole in- cludes all of its parts, income includes property and nothing but property.

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