Van Dyke v. City of Milwaukee
| Citation | 150 N.W. 509,159 Wis. 460 |
| Parties | VAN DYKE v. CITY OF MILWAUKEE. |
| Decision Date | 13 January 1915 |
| Court | United States State Supreme Court of Wisconsin |
OPINION TEXT STARTS HERE
On rehearing. Denied.
For former opinion, see 146 N. W. 812.
Van Dyke, Shaw, Muskat & Van Dyke and Geo. D. Van Dyke, all of Milwaukee, for respondent.
Upon the rehearing we have been favored with a brief in behalf of defendant and oral argument by its counsel, and also by Mr. Lyons in behalf of the Tax Commission. The argument takes a three-fold aspect. Statutory rules of construction permitting the one contended for by defendant are called to our attention. The construction given the statute by the Tax Commission is urged in its behalf, and an inconvenience in the administration of the law as construed by the court is alleged because the personal property tax and the income tax would appear upon different tax rolls.
[1][2] No exception need be taken to the rules of statutory construction contended for. They are correct and useful where applicable. But when a statute, giving its language its ordinary and natural meaning, expresses a result neither absurd nor harsh, but on the contrary one in harmony with the general scheme of the law, namely, that an income tax shall, substantially, become a substitute for a personal property tax, then such natural and ordinary meaning should be given to the language used, and there is no room for construction. A tax was levied upon incomes for 1911. A tax upon personal property was levied for said year. The statute says that a person who has paid a tax upon his personal property during any year may have the same offset for the taxes due upon the income of such person during said year. Plaintiff paid a tax upon his personal property for 1911. He paid a tax upon his income during said year. The statute says the first may be applied in payment of the latter. Any other construction would lead to a double taxation of a vast amount of personal property in 1911, such as moneys, credits, stocks, and bonds which have since been exempted from taxation. No intent to impose a double tax thereon can be gathered from the statute. On the contrary, it aims to avoid double taxation. Such was the construction given it in the Income Tax Cases, 148 Wis. 456, 505, 134 N. W. 673, 688, where it said:
“By the present law it is quite clear that personal property taxation for all practical purposes becomes a thing of the past.”
It became a thing of the past from the time of the inception of the Income Tax Law, and not from one year thereafter. As stated in the former opinion, it is the period of time for which each tax is paid that is made the basis of the right to offset, and not the time when the income tax becomes due.
[3] The construction given laws by administrative departments are certainly entitled to weight--especially when long acquiesced in. But a practically contemporaneous construction of an administrative department cannot be successfully invoked to override a plain meaning of the statute. The inconvenience alluded to is more fanciful than real, as the tax receipt itself gives the right to offset, and that the taxpayer must produce.
The conclusion reached in the former opinion is adhered to.
When this case was first decided, I intended to state my reasons for dissenting, but pressure from other work was so great that I did not do so. I take this occasion to state my views.
I think the word “income,” as used in the constitutional amendment and in the statute, refers to net earnings or profits rather than to gross receipts, and that it does not include capital which is taxable under the uniformity rule. If a manufacturing company sells goods to the amount of $100,000 in a year for cash, its gross receipts amount to this sum; but we do not ordinarily understand that this sum is income if it has cost the company $105,000 to manufacture and market the goods which produced the return. It will hardly do to say the illustration is not pat because no distribution is ordinarily made of gross receipts. If the money is not taxable as income in the hands of the corporation, I fail to see how it could become income in the hands of the stockholders by turning it over to them. If the property of a corporation consists of a building and the grounds on which it stands, that property represents the capital of the company regardless of the amount of outstanding stock. The stock simply evidences ownership of a fractional part of the capital and other assets of the company. Its actual value may differ widely from its face value. If the capital is converted to cash, the proceeds is still capital, and, if the money is distributed among the stockholders, it is a distribution of capital. The certificates of stock, which had a value before the distribution, cease to have any. They have simply been converted into another species of property. Now if the Legislature can declare the dividend so received income, it may also declare that the proceeds derived by an individual from the sale of a farm or a house and lot or any other species of property is income. This would amount to a tax on transfers of property instead of a tax on profits. Income does not mean one thing where a corporation is involved and another where an individual is affected. A corporation the 1st of January in any year may own a large quantity of standing timber. It may cut $50,000 worth of such timber and make a profit of $10,000 on its operations over and above the value of the timber standing. According to the idea of the court, the entire $60,000 if distributed is...
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Trefry v. Putnam
...comes into his right to possession. Edwards v. Keith, 231 Fed. 110, 145 C. C. A. 298;Van Dyke v. Milwaukee, 159 Wis. 460, 146 N. W. 812,150 N. W. 509. The contention that stock dividends are not taxable as income, because in this commonwealth they are treated as capital and not as income as......
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...court has never so held. Button v. Hoffman, 61 Wis. 20, 20 N. W. 667, 50 Am. Rep. 131;Van Dyke v. Milwaukee, 159 Wis. 460, 146 N. W. 812, 150 N. W. 509. In the latter case it was held that dividends declared after the passage of the income tax law out of profits of the corporation made befo......
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... ... and he cites, in support of this conclusion, Van Dyke v ... City of Milwaukee, 159 Wis. 460, 146 N.W. 812, 150 N.W ... 509. Conceding that this ... ...
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...within the meaning of the law. Section 1087m2, Stats. The present case is ruled by Van Dyke v. Milwaukee, 159 Wis. 460, 146 N. W. 812, 150 N. W. 509; therefore little need be said here. In the Van Dyke Case it was held that dividends derived from stock are conclusively presumed as against s......