Duffy v. Treasurer & Receiver General

• Decision Date: 12 November 1919
• Citation: 234 Mass. 42
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: MAURICE A. DUFFY & others v. TREASURER AND RECEIVER GENERAL.

234 Mass. 42

MAURICE A. DUFFY & others v. TREASURER AND RECEIVER GENERAL.

Supreme Judicial Court of Massachusetts, Suffolk.

November 12, 1919

October 22, 1919.

Present: RUGG, C.

J., BRALEY, DE COURCY, CROSBY, & CARROLL, JJ.

Constitutional Law Taxation, Distribution of income tax, Equal protection of laws, Due process of law. Tax, On income. No limitation in the Constitution, either before or after the Forty-fourth

Amendment, prevents the General Court from committing to a State officer or officers appointed by the Governor, rather than to the assessors and collectors of taxes of the several towns and cities, the levy and collection of the income tax. The power to tax, being a sovereign power, is an attribute of the

Commonwealth and towns and cities have no inherent power to levy taxes, but can exercise only those powers to tax which are delegated to them by the Commonwealth. The income tax, levied and collected under the provisions of St. 1916, c.

269, and statutes in amendment thereof, pursuant to the power given by the Forty-fourth Amendment to the Constitution, is a State tax assessed equally upon all inhabitants of the Commonwealth in proportion to their respective incomes from the designated sources, and levied and collected by State officers.

The design of St 1919, c. 314, providing for the distribution among the several cities, towns and taxing districts of the Commonwealth of the amounts collected as an income tax, is that the distribution shall be made in ratio to the valuation of all the property remaining subject to taxation in the several cities, towns and taxing districts.

The basis provided by St. 1919, c. 314, of distribution of the income tax among the several cities, towns and taxing districts, while it is different from that on which the collection of that tax is made, is one recognized by law and practice as just for the levying of the State tax, and is not irrational, whimsical or arbitrary.

Money distributed to the several cities and towns and taxing districts of the Commonwealth as the portion of the income tax to which they are entitled under St. 1919, c. 314, can be disbursed by them only for public uses and not in any sense for the private advantage of individuals.

The town system of government, recognized and preserved by the

Constitution, is not transcended by the provisions of St. 1919, c. 314.

The provisions of St. 1919, c. 314, do not violate the general principle of the law of taxation that the people of one district cannot be taxed for the benefit of another district. The distribution of the income tax under the provisions of St. 1919, c.

314, although not in proportion to the amounts collected from the several municipalities, is a means of apportioning the ultimate burdens of the support of government.

The Legislature is not confined to a single method in apportioning public expenses or raising the money to defray them.

St. 1919, c.

314, is not intended to be an instrument to narrow or circumvent the constitutional requirement for proportional taxes upon all property other than incomes.

Such inequalities as result from the operation of St. 1919, c. 314, do not render it unconstitutional. St. 1919, c. 314, is not in contravention of the provisions of the

Constitution of the Commonwealth requiring proportional taxation and prohibiting the payment of money from the treasury of the Commonwealth except "for the necessary defence and support of the Commonwealth; and for the protection and preservation of the inhabitants thereof," contained in art. 4 and art. 11 of c. 2, Section 1. St. 1919, c. 314, is not in violation of the guaranties, contained in the

Fourteenth Amendment to the Constitution of the United States, of equal protection of the laws and against being deprived of property without due process of law.

PETITION, filed in the Supreme Judicial Court on October 16, 1919, by three taxable inhabitants, who also were the selectmen, of the town of Milton, for a writ of mandamus commanding the Treasurer and Receiver General "(1) to desist and refrain from distributing any moneys in accordance with the provisions of St. 1919, c. 314; (2) to desist and refrain from distributing any moneys in accordance with the provisions of St. 1918, c 219; and (3) that the Treasurer and Receiver General be commanded (unless and until the General Court shall otherwise lawfully provide) to make distribution of the net distributable proceeds of the taxes coming into his hands under the provisions of St. 1916, c. 269, to and among the several cities and towns of the Commonwealth in the proportions in which the said taxes were paid and contributed by the inhabitants of said several municipalities, respectively; also a

PETITION, filed in the Supreme Judicial Court on October 16, 1919, by a taxable inhabitant of the town of Brookline, for a writ of mandamus commanding the Treasurer and Receiver General "not to distribute or pay over any portion of the tax for the year 1919 raised under the provisions of St. 1916, c. 269, from the petitioner or from any other inhabitant of the town of Brookline to any other city or town until the further order of the court."

The respondent filed a demurrer in each case. The cases came on to be heard before Pierce, J., upon the petitions and demurrers, and, being of the opinion that the questions raised by the demurrer in each case so affected the merits of the controversy that, before further proceedings, the matters ought to be determined by this court, the single justice reported each case for determination by this court, the case to stand for hearing upon the merits if the demurrer was overruled and, if the demurrer was sustained, the petition to be dismissed unless the petitioner should desire to amend it, if it could be amended so as to be maintained.

Article 44 of the Amendments to the Constitution reads as follows: "Full power and authority are hereby given and granted to the General Court to impose and levy a tax on income in the manner hereinafter provided. Such tax may be at different rates upon income derived from different classes of property, but shall be levied at a uniform rate throughout the Commonwealth upon incomes derived from the same class of property. The General Court may tax income not derived from property at a lower rate than income derived from property, and may grant reasonable exemptions and abatements. Any class of property the income from which is taxed under the provisions of this article may be exempted from the imposition and levying of proportional and reasonable assessments, rates and taxes, as at present authorized by the Constitution. This article shall not be construed to limit the power of the General Court to impose and levy reasonable duties and excises."

St. 1918, c.

219, is as follows:

"On or before the fifteenth day of November in the year nineteen hundred and nineteen the Treasurer and Receiver General shall pay to each city or town, and to each fire, water, improvement, light and watch district having the power of taxation, an amount equal to the difference between the average amount of the tax levied upon personal property in such city, town or district in the years nineteen hundred and fifteen and nineteen hundred and sixteen and the average amount, computed by the Tax Commissioner, of the tax upon the personal property actually assessed in such city, town or district for the years nineteen hundred and seventeen and nineteen hundred and eighteen. If the amount of taxes collected from incomes shall exceed the sum necessary to make the said payments, the balance shall be distributed among the several cities and towns in proportion to the amount of the State tax imposed upon each of them in the year nineteen hundred and nineteen: provided, that of the aforesaid excess the Commonwealth shall retain a sum sufficient to reimburse it for the expenses incurred under chapter two hundred and sixty-nine of the General Acts of nineteen hundred and sixteen and amendments thereof during the year nineteen hundred and nineteen, and abated taxes repaid thereunder during that year. In years subsequent to nineteen hundred and nineteen, the taxes collected under the provisions of said chapter two hundred and sixty-nine and amendments thereof shall be distributed as the General Court may determine."

St. 1919, c.

314, is as follows:

"Section 1. The taxes collected by the Commonwealth upon incomes under the provisions of chapter two hundred and sixty-nine of the General Acts of nineteen hundred and sixteen, and acts in amendment thereof, shall, on or before the fifteenth day of November in each year, be distributed among and paid to the several cities, towns and districts by the Treasurer and Receiver General in the manner following, namely, -- to each city, town and district such proportion of an amount equal to the difference between the average amount of the tax levied upon personal property in such city, town or district in the years nineteen hundred and fifteen and nineteen hundred and sixteen, and the average amount, computed by the Tax Commissioner, that would be produced by a tax upon the personal property actually assessed in each city, town or district for the years nineteen hundred and seventeen and nineteen hundred and eighteen at an average of the same rates of taxation as prevailed therein in the years nineteen hundred and fifteen and nineteen hundred and sixteen, as is ninety per cent thereof for the year nineteen hundred and nineteen, as is eighty per cent thereof for the year nineteen hundred and twenty, as is seventy per cent thereof for the year nineteen hundred and twenty-one, as is sixty per cent thereof for the year nineteen hundred and twenty-two, as is fifty per cent thereof for the...