Culliton v. Chase
Citation | 25 P.2d 81,174 Wash. 363 |
Decision Date | 08 September 1933 |
Docket Number | 24491. |
Court | United States State Supreme Court of Washington |
Parties | CULLITON et al. v. CHASE et al. McKALE'S, Inc., et al. v. SAME. |
Appeal from Superior Court, Thurston County; D. F. Wright, Judge.
Actions by William M. Culliton and others and by McKale's, Inc. and others against Samuel H. Chase and others, members of the State Tax Commission. The actions were consolidated for trial and appeal. From an adverse decree, defendants appeal.
Affirmed.
See also, 22 P.2d 1049.
G. W Hamilton and John W. Hanna, both of Olympia for appellants.
Newman H. Clark and M. F. Mathewson, both of Seattle, J. T. Trullinger, of Olympia, and Preston, Thorgimson & Turner and Lundin, Barto & Devin, all of Seattle, for respondents.
Lane & Thomspon, grinstead, laube, Laughlin & Meakim, George Donworth, Charles T. Donworth, Allen, Froude, Hilen & Askren, McMicken, Ramsey Rupp & Schweppe, Peters, Evans & McLaren, McCormack & Maxwell, and A. Emerson Cross, all of Seattle, Charles W. Hall, of Vancouver, and E. W. Anderson and Yantis & Brodie, all of Olympia, amici curiae.
Alleging that the state income tax law (Initiative No. 69, chapter 5 p. 49, Laws of 1933) was unconstitutional, respondents instituted two actions, which were consolidated for trial and appeal, against the members of the state tax commission, to secure a permanent injunction restraining defendants from enforcing the act mentioned. The trial court was of the view that the challenged act offended against the uniformity requirement of the Fourteenth Amendment to the State Constitution and was therefore void. The demurrers to the complaints were overruled and a decree was entered permanently restraining the enforcement of the act, from which decree comes this appeal.
The Fourteenth Amendment to the State Constitution reads:
The income tax law provides:
The system of granduated rates adopted by the income tax law imposes upon the taxpayer a rate of taxation that progresses and becomes larger with the increase in the amount of his taxable income.
Respondents insist that, under the constitutional definition. 'The word 'property' as used herein shall mean and include everything, whether tangible or intangible, subject to ownership,' a tax on income derived from property is a tax on the property from which the income is derived; therefore the method of classification adopted by the income tax law is violative of the requirements of the State Constitution that 'all taxes shall be uniform upon the same class of property.'
Unless the income tax constitutes a tax on property, the uniformity clause of the State Constitution is not violated. If income taxes Cooley, Taxation (4th Ed.) § 1743.
The fact that the income tax law was passed as an initiative measure is of no controlling importance, nor can it be likened to an amendment to the Constitution. The Constitution provides the means, methods, and processes for its own amendment.
Amendment 14, which replaced article 7 of our Constitution, was adopted by the people by the proper method in 1930. The income tax law was passed by the people in 1932. All laws on any subject whatever, enacted by either the people or the Legislature, must be governed by the provisions of the Constitution in force at that time. 'The people in their legislative capacity are not, however, superior to the written and fixed Constitution.' State ex rel. Berry v. Superior Court, 92 Wash. 16, 159 P. 92, 94.
The pertinent portion of Amendment 14 of our Constitution is:
The initiative act in question is clearly one for public revenue.
It would certainly defy the ingenuity of the most profound lexicographer to formulate a more comprehensive definition of 'property.' It is 'everything, whether tangible or intangible, subject to ownership.' Income is either property under our Fourteenth Amendment, or no one owns it. If that is true, any one can use our incomes who has the power to seize or obtain them by foul means. There being no other classifications in our Constitution but real and personal property and intangible property, incomes necessarily fall within the category of intangible property. No more positive, precise, and compelling language could have been used than was used in those words of our Fourteenth Amendment. It needs no technical construction to tell what those words mean. The overwhelming weight of judicial authority is that 'income' is property and a tax upon income is a tax upon property.
None of the decisions from other states have any bearing upon the law Before us, because of our peculiarly forceful constitutional definition and the difference in their constitutional authorization or restriction.
In State ex rel. Bolens v. Frear, 148 Wis. 456, 134 N.W. 673, 689, 135 N.W. 164, L. R. A. 1915B, 569, 606, Ann. Cas. 1913A, 1147, an income tax act enacted in 1911 was apparently set out in full by the court and is almost identical with our own income tax act. There are some unimportant differences not necessary to mention. The constitution of Wisconsin had been amended in 1908 (article 8, § 1). It previously had provided that 'The rule of taxation shall be uniform, and taxes shall be levied upon such property * * * as the legislature shall prescribe,' which provision was amended by the addition of the following words: 'Taxes may also be imposed on incomes, privileges and occupations, which taxes may be graduated and progressive, and reasonable exemptions may be provided.'
Previous to the adoption of this amendment, the Supreme Court of Wisconsin had held an income tax law unconstitutional. In passing upon the income tax act of 1911, the Supreme Court of that state, among other things, said:
How different from the situation here. We have no constitutional provision authorizing taxation of income as one thing and property as another. We have only the constitutional provision that property 'shall mean and include everything, whether tangible or intangible, subject to ownership.' Until we have such a constitutional amendment, the hands of the people, as well as the Legislature, in enacting laws, are tied.
It has been definitely decided in this state that an income tax is a property tax, which should set the question at rest here. Aberdeen Savings & Loan Association v. Chase, 157 Wash. 351, 289 P. 536, 290 P. 697, 71 A. L. R. 232. Even though some of us dissented from the majority decision, the dissenting opinions show that the case was thoroughly considered and the opinion of the majority should govern. In future cases, even a...
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