Tyee Realty Company v. Anderson/Opinion of the Court

Both the plaintiffs in error, the one in 393 a corporation and the other in 394 an individual, paid under protest to the collector of internal revenue, taxes assessed under the income tax section of the tariff act of October 3, 1913 (sec. II., chap. 16, 38 Stat. at L. 166, Comp. Stat. 1913, § 6319). After an adverse ruling by the Commissioner of Internal Revenue on appeals which were prosecuted conformably to the statute (Rev. Stat. §§ 3220, 3226, Comp. Stat. 1913, §§ 5944, 5949) by both the parties for a refunding to them of the taxes paid, these suits were commenced to recover the amounts paid on the ground of the repugnancy to the Constitution of the section of the statute under which the taxes had been collected, and the cases are here on direct writs of error to the judgments of the court below, sustaining demurrers to both complaints on the ground that they stated no cause of action.

Every contention relied upon for reversal in the two cases is embraced within the following propositions: (a) that the tax imposed by the statute was not sanctioned by the 16th Amendment because the statute exceeded the exceptional and limited power of direct income taxation for the first time conferred upon Congress by that Amendment, and, being outside of the Amendment, and governed solely, therefore, by the general taxing authority conferred upon Congress by the Constitution, the tax was void as an attempt to levy a direct tax without apportionment under the rule established by Pollock v. Farmers' Loan & T. Co. 157 U.S. 429, 39 L. ed. 759, 15 Sup. Ct. Rep. 673; 158 U.S. 601, 39 L. ed. 1108, 15 Sup. Ct. Rep. 912; (b) that the statute is, moreover, repugnant to the Constitution because of the provision therein contained for its retroactive operation for a designated time, and because of the illegal discriminations and inequalities which it creates, including the provision for a progressive tax on the income of individuals and the method provided in the statute for computing the taxable income of corporations.

Bue we need not now enter into an original consideration of the merits of these contentions tentions because each and all of them were considered and adversely disposed of in Brushaber v. Union P. R. Co. 240 U.S. 1, 60 L. ed.-, 36 Sup. Ct. Rep. 236. That case, therefore, is here absolutely controlling and decisive. It follows that for the reasons stated in the opinion in the Brushaber Case, the judgments in these cases must be and they are affirmed.

Mr. Justice McReynolds took no part in the consideration and decision of these cases.