Page:Harvard Law Review Volume 32.djvu/411

375 INDIRECT ENCROACHMENT ON FEDERAL AUTHORITY 375 Co.,^ Erie Railroad v. Pennsylvania ® and Henderson Bridge Co. v. Kentucky ^ accepted the measure of gross earnings, some or all of which were from interstate commerce. To an untutored mind, taxes measured by gross earnings are a form of income taxes; and from now on it will be convenient to treat them as such, no matter by what name courts or legislatures may choose to call them. It will help towards seeing things as they are, if we emulate the attitude of Mr. Justice Holmes in his illuminating essay on "The Path of the Law,"^ in which, in order to point to the distinction between law and morals, he looks to the mental and emotional processes of the "bad man." For our pur- poses we may invoke that more estimable person whom we know as the "business man." This pecuniary creature will think that he is taxed on his income when his tax varies directly with the ups and downs of his income, even though judges and scholars may as- sure him that he is taxed on something entirely different. He will be primarily interested in knowing when and why such a tax must be paid and when and why it can be escaped. He will care less what such a tax is called by those versed in legal niceties than what its effect will be on his balance sheet. To him, at least, we may look for forgiveness for such imperfect coordination as may be indulged in by treating together all taxes measured by income, whether they are formally taxes on income or taxes on occupations, franchises or property. For a decade after the Ohio Express cases,® there was compara- tive quiet among those subjected to taxes that took account of earnings from interstate commerce. Parke, Davis b° Co. v. Roherts^^ sustained a tax on that part of the capital stock of a foreign cor- poration which was regarded as employed within the state, although Co. V. Taggart, 163 U. S. i, 16 Sup. Ct. Rep. 1054 (1896), 32 Harv. L. Rev. 248; Adams Express Co. v. Ohio State Auditor, 165 U. S. 194, 17 Sup. Ct. Rep. 305 (1897), 166 U. S. 185, 17 Sup. Ct. Rep. 604 (1897), 32 Harv. L. Rev. 251; Adams Express Co. V. Kentucky, 166 U. S. 171, 17 Sup. Ct. Rep. 527 (1897), 32 Harv. L. Rev. 258, note 104. Rev. 242. ^ 166 U. S. 150, 17 Sup. Ct. Rep. 532 (1897), Ibid., 258, note 104. 8 10 Harv. L. Rev. 457-78. ® Adams Express Co. v. Ohio State Auditor, note 4, supra. K» 171 U. S. 658, 19 Sup. Ct. Rep. 58 (1898).
 * 142 U. S. 217, 12 Sup. Ct. Rep. 121 (1891), 31 Harv. L. Rev. 579-80, 32 Harv. L.
 * 158 U. S. 431, IS Sup. Ct. Rep. 896 (189s), 32 Harv. L. Rev. 249.