Cook v. Tait, 220
| Decision Date | 05 May 1924 |
| Docket Number | No. 220,220 |
| Citation | 44 S.Ct. 444,68 L.Ed. 895,265 U.S. 47 |
| Parties | COOK v. TAIT, Collector of Internal Revenue |
| Court | U.S. Supreme Court |
Messrs. Charles Claflin Allen and Charles Claflin Allen, Jr., both of St. Louis, Mo., for plaintiff in error.
[Argument of Counsel from pages 47-49 intentionally omitted] Mr. Solicitor General Beck, of Washington, D. C., for defendant in error.
[Argument of Counsels from pages 50-52 intentionally omitted] Mr. Justice McKENNA delivered the opinion of the Court.
Action by plaintiff in error, who will be referred to as plaintiff, to recover the sum of $298.34 as the first installment of an income tax paid, it is charged, under the threats and demands of Tait.
The tax was imposed under the Revenue Act of 1921, which provides by section 210 (42 Stat. 227, 233 [Comp. St. Ann. Supp. 1923, § 6336 1/8 e]):
'That, in lieu of the tax imposed by section 210 of the Revenue Act of 1918, there shall be levied, collected, and paid for each taxable year upon the net income of every individual a normal tax of 8 per centum of the amount of the net income in excess of the credits provided in section 216: Provided, that in the case of a citizen or resident of the United States the rate upon the first $4,000 of such excess amount shall be 4 per centum.'1
Plaintiff is a native citizen of the United States, and was such when he took up his residence and became domiciled in the city of Mexico. A demand was made upon him by defendant in error, designated defendant, to make a return of his income for the purpose of taxation under the revenue laws of the United States. Plaintiff complied with the demand, but under protest; the income having been derived from property situated in the city of Mexico. A tax was assessed against him in the sum of $1,193.38, the first installment of which he paid, and for it, as we have said this action was brought.
The question in the case, and which was presented by the demurrer to the declaration is, as expressed by plaintiff, whether Congress has power to impose a tax upon income received by a native citizen of the United States who, at the time the income was received, was permanently resident and domiciled in the city of Mexico, the income being from real and personal property located in Mexico.
Plaintiff assigns against the power, not only his rights under the Constitution of the United States, but under international law, and in support of the assignments cites many cases. It will be observed that the foundation of the assignments is the fact that the citizen receiving the income and the property of which it is the product are outside of the territorial limits of the United States. These two facts, the contention is, exclude the existence of the power to tax. Or to put the contention another way, to the existence of the power and its exercise, the person receiving the income and the property from which he receives it must both be within the territorial limits of the United States to be within the taxing power of the United States. The contention is not justified, and that it is not justified is the necessary deduction of recent cases. In United States v. Bennett, 232 U. S. 299, 34 Sup. Ct. 433, 58 L. Ed. 612, the power of the United States to tax a foreign-built yacht owned and used during the taxing period outside of the United States by a citizen domiciled in the United States was sustained. The tax passed on was imposed by a tariff act,2 but necessarily the power does not depend upon the form by which it is exerted.
It will be observed that the case contained only one of the conditions of the present case, the property taxed was outside of the United States. In United States v. Goelet, 232 U. § 293, 34 Sup. Ct. 431, 58 L. Ed. 610, the yacht taxed was outside of the United States, but owned by a citizen of the United States who was ...
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