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U.S. Supreme Court

Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916)

Brushaber v. Union Pacific Railroad Company

No. 140

Argued October 14, 15, 1915

Decided January 24, 1916

240 U.S. 1


Under proper averments, a stockholder's suit to restrain a corporation from voluntarily paying a tax charged to be unconstitutional is not violative of Rev.Stat. § 3224, and the district court has jurisdiction to entertain the action. Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429.

In this case -- that of a stockholder against a corporation to restrain the latter from voluntarily paying the income tax imposed by the Tariff Act of 1913 -- the defendant corporation notified the government of the pendency of the action and the United States was heard as amicus curiae in support of the constitutionality of the Act.

The Sixteenth Amendment was obviously intended to simplify the situation and make clear the limitations on the taxing power of Congress and not to create radical and destructive changes in our constitutional system.

The Sixteenth Amendment does not purport to confer power to levy income taxes in a generic sense, as that authority was already possessed, chanrobles.com-red

Page 240 U. S. 2

or to limit and distinguish between one kind of income tax and another, but its purpose is to relieve all income taxes when imposed from apportionment from consideration of the source whence the income is derived.

The Income Tax provisions of the Tariff Act of 1913 are not unconstitutional by reason of retroactive operation, the period covered not extending prior to the time when the Amendment was operative, nor are those provisions unconstitutional under the due process provision of the Fifth Amendment, nor do they deny due process of law, nor equal protection of the law by reason of the classifications therein of things or persons subject to the tax.

The provisions for collecting income at the source do not deny due process of law by reason of duties imposed upon corporations without compensation in connection with the payment of the tax by others.

The uniformity of taxation required by the federal Constitution is geographical. Knowlton v. Moore, 178 U. S. 41.

The Fifth Amendment is not a limitation upon the taxing power conferred upon Congress by the Constitution.

Arguments as to the expediency of levying a tax which is within the power of Congress to levy are beyond judicial cognizance.

When there are differences between the subjects that are taxed, Congress does not transcend the limit of its taxing power by taxing them differently.

A want of due process of law does not arise from want of wisdom in Congress in levying taxes, and thus give the courts power to overrule the action of Congress by declaring it to be unconstitutional.

The facts, which involve the construction of the Sixteenth Amendment and other provisions of the Constitution of the United States, and the constitutionality of the income tax provisions of the Tariff Act of October 9, 1913, are stated in the opinion. chanrobles.com-red

Page 240 U. S. 9


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