Case Law
BRUSHABER v. UNION PACIFIC R. CO

BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)

U.S. Supreme Court

BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)

240 U.S. 1

FRANK R. BRUSHABER, Appt.,
v.
UNION PACIFIC RAILROAD COMPANY.
No. 140.

Argued October 14 and 15, 1915.
Decided January 24, 1916.

[240 U.S. 1, 2] Messrs. Julien T. Davies, Brainard Tolles, Garrard Glenn, and Martin A. Schenck for appellant.

Mr. Henry W. Clark for appellee.

[240 U.S. 1, 5] Solicitor General Davis, Assistant Attorney General Wallace, and Attorney General Gregory for the United
States.

[240 U.S. 1, 9]

Mr. Chief Justic e White delivered the opinion of the court:

As a stockholder of the Union Pacific Railroad Company, the appellant filed his bill to enjoin the corporation from complying
with the income tax provisions of the tariff act of October 3, 1913 ( II., chap. 16, 38 Stat. at L. 166). Because of
constitutional questions duly arising the case is here on direct appeal from a decree sustaining a motion to dismiss because no
ground for relief was stated.

The right to prevent the corporation from returning and paying the tax was based upon many averments as to the repugnancy
of the statute to the Constitution of the United States, of the peculiar relation of the corporation to the stockholders, and their
particular interests resulting from many of the administrative provisions of the assailed act, of the confusion, wrong, and
multiplicity [240 U.S. 1, 10] of suits and the absence of all means of redress which would result if the corporation paid the tax
and complied with the act in other respects without protest, as it was alleged it was its intention to do. To put out of the way a
question of jurisdiction we at once say that in view of these averments and the ruling in Pollock v. Farmers' Loan & T. Co.
157 U.S. 429 , 39 L. ed. 759, 15 Sup. Ct. Rep. 673, sustaining the right of a stockholder to sue to restrain a corporation
under proper averments from voluntarily paying a tax charged to be unconstitutional on the ground that to permit such a suit
did not violate the prohibitions of 3224, Revised Statutes (Comp. Stat. 1913, 5947), against enjoining the enforcement of
taxes, we are of opinion that the contention here made that there was no jurisdiction of the cause, since to entertain it would
violate the provisions of the Revised Statutes referred to, is without merit. Before coming to dispose of the case on the merits,
however, we observe that the defendant corporation having called the attention of the government to the pendency of the
cause and the nature of the controversy and its unwillingness to voluntarily refuse to comply with the act assailed, the United
States, as amicus curiae, has at bar been heard both orally and by brief for the purpose of sustaining the decree.

Aside from averments as to citizenship and residence, recitals as to the provisions of the statute, and statements as to the
business of the corporation, contained in the first ten paragraphs of the bill, advanced to sustain jurisdiction, the bill alleged
twenty-one constitutional objections specified in that number of paragraphs or subdivisions. As all the grounds assert a
violation of the Constitution, it follows that, in a wide sense, they all charge a repugnancy of the statute to the 16th
Amendment, under the more immediate sanction of which the statute was adopted.

The various propositions are so intermingled as to cause it to be difficult to classify them. We are of opinion, however, [240
U.S. 1, 11] that the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a
hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the
regulation of apportionment applicable to all other direct taxes. And the far-reaching effect of this erroneous assumption will
be made clear by generalizing the many contentions advanced in argument to support it, as follows: (a) The Amendment
authorizes only a particular character of direct tax without apportionment, and therefore if a tax is levied under its assumed
authority which does not partake of the characteristics exacted by the Amendment, it is outside of the Amendment, and is void
as a direct tax in the general constitutional sense because not apportioned. (b) As the Amendment authorizes a tax only upon
incomes 'from whatever source derived,' the exclusion from taxation of some income of designated persons and classes is not
authorized, and hence the constitutionality of the law must be tested by the general provisions of the Constitution as to
taxation, and thus again the tax is void for want of apportionment. (c) As the right to tax 'incomes from whatever source
derived' for which the Amendment provides must be considered as exacting intrinsic uniformity, therefore no tax comes under
the authority of the Amendment not conforming to such standard, and hence all the provisions of the assailed statute must once
more be tested solely under the general and pre-existing provisions of the Constitution, causing the statute again to be void in
the absence of apportionment. (d) As the power conferred by the Amendment is new and prospective, the attempt in the
statute to make its provisions retroactively apply is void because, so far as the retroactive period is concerned, it is governed
by the pre-existing constitutional requirement as to apportionment.

But it clearly results that the proposition and the contentions [240 U.S. 1, 12] under it, if acceded to, would cause one provision
of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a
direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned.
Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under
the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to
authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power
to impose a different tax in one state or states than was levied in another state or states. This result, instead of simplifying the
situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to
accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.

But let us by a demonstration of the error of the fundamental proposition as to the significance of the Amendment dispel the
confusion necessarily arising from the arguments deduced from it. Before coming, however, to the text of the Amendment, to
the end that its significance may be determined in the light of the previous legislative and judicial history of the subject with
which the Amendment is concerned, and with a knowledge of the conditions which presumptively led up to its adoption, and
hence of the purpose it was intended to accomplish, we make a brief statement on those subjects.

That the authority conferred upon Congress by 8 of article 1 'to lay and collect taxes, duties, imposts and excises' is
exhaustive and embraces every conceivable power of taxation has never been questioned, or, if it has, has been so often
authoritatively declared as to render it necessary only to state the doctrine. And it has also never [240 U.S. 1, 13] been
questioned from the foundation, without stopping presently to determine under which of the separate headings the power was
properly to be classed, that there was authority given, as the part was included in the whole, to lay and collect income taxes.
Again, it has never moreover been questioned that the conceded complete and all-embracing taxing power was subject, so far
as they were respectively applicable, to limitations resulting from the requirements of art. 1, 8, cl. 1, that 'all duties, imposts
and excises shall be uniform throughout the United States,' and to the limitations of art I., 2, cl. 3, that 'direct taxes shall be
apportioned among the several states,' and of art 1, 9, cl. 4, that 'no capitation, or other direct, tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be taken.' In fact, the two great subdivisions embracing the
complete and perfect delegation of the power to tax and the two correlated limitations as to such power were thus aptly stated
by Mr. Chief Justice Fuller in Pollock v. Farmers' Loan & T. Co. 157 U. S. supra, at page 557: 'In the matter of taxation, the
Constitution recognizes the two great classes of direct and indirect taxes, and lays down two rules by which their imposition
must be governed, namely: The rule of apportionment as to direct taxes, and the rule of uniformity as to duties, imposts, and
excises.' It is to be observed, however, as long ago pointed out in Veazie Bank v. Fenno, 8 Wall. 533, 541, 19 L. ed. 482,
485, that the requirements of apportionment as to one of the great classes and of uniformity as to the other class were not so
much a limitation upon the complete and all-embracing authority to tax, but in their essence were simply regulations concerning
the mode in which the plenary power was to be exerted. In the whole history of the government down to the time of the
adoption of the 16th Amendment, leaving aside some conjectures expressed of the possibility of a tax lying intermediate
between the two great classes and embraced [240 U.S. 1, 14] by neither, no question has been anywhere made as to the
correctness of these propositions. At the very beginning, however, there arose differences of opinion concerning the criteria to
be applied in determining in which of the two great subdivisions a tax would fall. Without pausing to state at length the basis of
these differences and the consequences which arose from them, as the whole subject was elaborately reviewed in Pollock v.
Farmers' Loan & T. Co. 157 U.S. 429 , 39 L. ed. 759, 15 Sup. Ct. Rep. 673, 158 U.S. 601 , 39 L. ed. 1108, 15 Sup. Ct.
Rep. 912, we make a condensed statement which is in substance taken from what was said in that case. Early the differences
were manifested in pressing on the one hand and opposing on the other, the passage of an act levying a tax without
apportionment on carriages 'for the conveyance of persons,' and when such a tax was enacted the question of its repugnancy
to the Constitution soon came to this court for determination. Hylton v. United States, 3 Dall. 171, 1 L. ed. 556. It was held
that the tax came within the class of excises, duties, and imposts, and therefore did not require apportionment, and while this
conclusion was agreed to by all the members of the court who took part in the decision of the case, there was not an exact
coincidence in the reasoning by which the conclusion was sustained. Without stating the minor differences, it may be said with
substantial accuracy that the divergent reasoning was this: On the one hand, that the tax was not in the class of direct taxes
requiring apportionment, because it was not levied directly on property because of its ownership, but rather on its use, and
was therefore an excise, duty, or impost; and on the other, that in any event the class of direct taxes included only taxes
directly levied on real estate because of its ownership. Putting out of view the difference of reasoning which led to the
concurrent conclusion in the Hylton Case, it is undoubted that it came to pass in legislative practice that the line of demarcation
between the two great classes of direct taxes on the one hand and excises, duties, and [240 U.S. 1, 15] imposts on the other,
which was exemplified by the ruling in that case, was accepted and acted upon. In the first place this is shown by the fact that
wherever (and there were a number of cases of that kind) a tax was levied directly on real estate or slaves because of
ownership, it was treated as coming within the direct class and apportionment was provided for, while no instance of
apportionment as to any other kind of tax is afforded. Again the situation is aptly illustrated by the various acts taxing incomes
derived from property of every kind and nature which were enacted beginning in 1861, and lasting during what may be termed
the Civil War period. It is not disputable that these latter taxing laws were classed under the head of excises, duties, and
imposts because it was assumed that they were of that character inasmuch as, although putting a tax burden on income of
every kind, including that derived from property real or personal, they were not taxes directly on property because of its
ownership. And this practical construction came in theory to be the accepted one, since it was adopted without dissent by the
most eminent of the text writers. 1 Kent, Com. 254, 256; 1 Story, Const. 955; Cooley, Const. Lim. 5th ed. *480; Miller,
Constitution, 237; Pom. Const. Law, 281; 1 Hare, Const. Law, 249, 250; Burroughs, Taxn. 502; Ordronaux, Constitutional
Legislation, 225.

Upon the lapsing of a considerable period after the repeal of the income tax laws referred to, in 1894 [28 Stat. at L. 509,
chap. 349], an act was passed laying a tax on incomes from all classes of property and other sources of revenue which was
not apportioned, and which therefore was of course assumed to come within the classification of excises, duties, and imposts
which were subject to the rule of uniformity, but not to the rule of apportionment. The constitutional validity of this law was
challenged on the ground that it did not fall within the class of excises, duties, and imposts, [240 U.S. 1, 16] but was direct in the
constitutional sense, and was therefore void for want of apportionment, and that question came to this court and was passed
upon in Pollock v. Farmers' Loan & T. Co. 157 U.S. 429 , 39 L. ed. 759, 15 Sup. Ct. Rep. 673, 158 U.S. 601 , 39 L. ed.
1108, 15 Sup. Ct. Rep. 912. The court, fully recognizing in the passage which we have previously quoted the allembracing
character of the two great classifications, including, on the one hand, direct taxes subject to apportionment, and on the other,
excises, duties, and imposts subject to uniformity, held the law to be unconstitutional in substance for these reasons:
Concluding that the classification of direct was adopted for the purpose of rendering it impossible to burden by taxation
accumulations of property, real or personal, except subject to the regulation of apportionment, it was held that the duty existed
to fix what was a direct tax in the constitutional sense so as to accomplish this purpose contemplated by the Constitution. (
157 U.S. 581 .) Coming to consider the validity of the tax from this point of view, while not questioning at all that in common
understanding it was direct merely on income and only indirect on property, it was held that, considering the substance of
things, it was direct on property in a constitutional sense, since to burden an income by a tax was, from the point of substance,
to burden the property from which the income was derived, and thus accomplish the very thing which the provision as to
apportionment of direct taxes was adopted to prevent. As this conclusion but enforced a regulation as to the mode of
exercising power under particular circumstances, it did not in any way dispute the all-embracing taxing authority possessed by
Congress, including necessarily therein the power to impose income taxes if only they conformed to the constitutional
regulations which were applicable to them. Moreover, in addition, the conclusion reached in the Pollock Case did not in any
degree involve holding that income taxes generically and necessarily came within the class [240 U.S. 1, 17] of direct taxes on
property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced
as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as
to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and
consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would
not apply to it. Nothing could serve to make this clearer than to recall that in the Pollock Case, in so far as the law taxed
incomes from other classes of property than real estate and invested personal property, that is, income from 'professions,
trades, employments, or vocations' ( 158 U.S. 637 ), its validity was recognized; indeed, it was expressly declared that no
dispute was made upon that subject, and attention was called to the fact that taxes on such income had been sustained as
excise taxes in the past. Id. p. 635. The whole law was, however, declared unconstitutional on the ground that to permit it to
thus operate would relieve real estate and invested personal property from taxation and 'would leave the burden of the tax to
be borne by professions, trades, employments, or vacations; and in that way what was intended as a tax on capital would
remain, in substance, a tax on occupations and labor' ( id. p. 637),-a result which, it was held, could not have been
contemplated by Congress.

This is the text of the Amendment:

'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without
apportionment among the several states, and without regard to any census or enumeration.'

It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense,-an authority
already possessed and never questioned, [240 U.S. 1, 18] -or to limit and distinguish between one kind of income taxes and
another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment
from a consideration of the source whence the income was derived. Indeed, in the light of the history which we have given and
of the decision in the Pollock Case, and the ground upon which the ruling in that case was based, there is no escape from the
conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the
Pollock Case was decided; that is, of determining whether a tax on income was direct not by a consideration of the burden
placed on the taxed income upon which it directly operated, but by taking into view the burden which resulted on the property
from which the income was derived, since in express terms the Amendment provides that income taxes, from whatever source
the income may be derived, shall not be subject to the regulation of apportionment. From this in substance it indisputably
arises, first, that all the contentions which we have previously noticed concerning the assumed limitations to be implied from
the language of the Amendment as to the nature and character of the income taxes which it authorizes find no support in the
text and are in irreconcilable conflict with the very purpose which the Amendment was adopted to accomplish. Second, that
the contention that the Amendment treats a tax on income as a direct tax although it is relieved from apportionment and is
necessarily therefore not subject to the rule of uniformity as such rule only applies to taxes which are not direct, thus
destroying the two great classifications which have been recognized and enforced from the beginning, is also wholly without
foundation since the command of the Amendment that all income taxes shall not be subject to apportionment by a
consideration of the sources from which the taxed income may be derived [240 U.S. 1, 19] forbids the application to such taxes
of the rule applied in the Pollock Case by which alone such taxes were removed from the great class of excises, duties, and
imposts subject to the rule of uniformity, and were placed under the other or direct class. This must be unless it can be said
that although the Constitution, as a result of the Amendment, in express terms excludes the criterion of source of income, that
criterion yet remains for the purpose of destroying the classifications of the Constitution by taking an excise out of the class to
which it belongs and transferring it to a class in which it cannot be placed consistently with the requirements of the
Constitution. Indeed, from another point of view, the Amendment demonstrates that no such purpose was intended, and on
the contrary shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their
operation. We say this because it is to be observed that although from the date of the Hylton Case, because of statements
made in the opinions in that case, it had come to be accepted that direct taxes in the constitutional sense were confined to
taxes levied directly on real estate because of its ownership, the Amendment contains nothing repudiation or challenging the
ruling in the Pollock Case that the word 'direct' had a broader significance, since it embraced also taxes levied directly on
personal property because of its ownership, and therefore the Amendment at least impliedly makes such wider significance a
part of the Constitution,-a condition which clearly demonstrates that the purpose was not to change the existing interpretation
except to the extent necessary to accomplish the result intended; that is, the prevention of the resort to the sources from which
a taxed income was derived in order to cause a direct tax on the income to be a direct tax on the source itself, and thereby to
take an income tax out of the class of excises, duties, and imposts, and place it in the class of direct taxes. [240 U.S. 1, 20] We
come, then, to ascertain the merits of the many contentions made in the light of the Constitution as it now stands; that is to say,
including within its terms the provisions of the 16th Amendment as correctly interpreted. We first dispose of two propositions
assailing the validity of the statute on the one hand because of its repugnancy to the Constitution in other respects, and
especially because its enactment was not authorized by the 16th Amendment.

The statute was enacted October 3, 1913, and provided for a general yearly income tax from December to December of
each year. Exceptionally, however, it fixed a first period embracing only the time from March 1, to December 31, 1913, and
this limited retroactivity is assailed as repugnant to the due process clause of the 5th Amendment, and as inconsistent with the
16th Amendment itself. But the date of the retroactivity did not extend beyond the time when the Amendment was operative,
and there can be no dispute that there was power by virtue of the Amendment during that period to levy the tax, without
apportionment, and so far as the limitations of the Constitution in other respects are concerned, the contention is not open,
since in Stockdale v. Atlantic Ins. Co. 20 Wall. 323, 331, 22 L. ed. 348, 351, in sustaining a provision in a prior income tax
law which was assailed because of its retroactive character, it was said:

'The right of Congress to have imposed this tax by a new statute, although the measure of it was governed by the
income of the past year, cannot be doubted; much less can it be doubted that it could impose such a tax on the income
of the current year, though part of that year had elapsed when the statute was passed. The joint resolution of July 4th,
1864 [13 Stat. at L. 417], imposed a tax of 5 per cent upon all income of the previous year, although one tax on it had
already been paid, and no one doubted the validity of the tax or attempted to resist it.' [240 U.S. 1, 21] The statute
provides that the tax should not apply to enumerated organizations or corporations, such as labor, agricultural or
horticultural organizations, mutual savings banks, etc., and the argument is that as the Amendment authorized a tax on
incomes 'from whatever source derived,' by implication it excluded the power to make these exemptions. But this is
only a form of expressing the erroneous contention as to the meaning of the Amendment, which we have already
disposed of. And so far as this alleged illegality is based on other provisions of the Constitution, the contention is also
not open, since it was expressly considered and disposed of in Flint v. Stone Tracy Co. 220 U.S. 108, 173 , 55 S. L.
ed. 389, 422, 31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312

Without expressly stating all the other contentions, we summarize them to a degree adequate to enable us to typify and
dispose of all of them.

1. The statute levies one tax called a normal tax on all incomes of individuals up to $20,000, and from that amount up, by
gradations, a progressively increasing tax, called an additional tax, is imposed. No tax, however, is levied upon incomes of
unmarried individuals amounting to $3, 000 or less, nor upon incomes of married persons amounting to $4,000 or less. The
progressive tax and the exempted amounts, it is said, are based on wealth alone, and the tax is therefore repugnant to the due
process clause of the 5th Amendment.

2. The act provides for collecting the tax at the source; that is, makes it the duty of corporations, etc., to retain and pay the
sum of the tax on interest due on bonds and mortgages, unless the owner to whom the interest is payable gives a notice that he
claims an exemption. This duty cast upon corporations, because of the cost to which they are subjected, is asserted to be
repugnant to due process of law as a taking of their property without compensation, and we recapitulate various contentions
as to discrimination against corporations and against individuals, [240 U.S. 1, 22] predicated on provisions of the act dealing with
the subject.

(a) Corporations indebted upon coupon and registered bonds are discriminated against, since corporations not so indebted
are relieved of any labor or expense involved in deducting and paying the taxes of individuals on the income derived from
bonds.

(b) Of the class of corporations indebted as above stated, the law further discriminates against those which have assumed the
payment of taxes on their bonds, since although some or all of their bondholders may be exempt from taxation, the
corporations have no means of ascertaining such fact, and it would therefore result that taxes would often be paid by such
corporations when no taxes were owing by the individuals to the government.

(c) The law discriminates against owners of corporate bonds in favor of individuals none of whose income is derived from
such property, since bondholders are, during the interval between the deducting and the paying of the tax on their bonds,
deprived of the use of the money so withheld.

(d) Again, corporate bondholders are discriminated against because the law does not release them from payment of taxes on
their bonds even after the taxes have been deducted by the corporation, and therefore if, after deduction, the corporation
should fail, the bondholders would be compelled to pay the tax a second time.

(e) Owners of bonds the taxes on which have been assumed by the corporation are discriminated against because the
payment of the taxes by the corporation does not relieve the bondholders of their duty to include the income from such bonds
in making a return of all income, the result being a double payment of the taxes, labor and expense in applying for a refund,
and a deprivation of the use of the sum of the taxes during the interval which elapses before they are refunded. [240 U.S. 1, 23]
3. The provision limiting the amount of interest paid which may be deducted from gross income of corporations for the
purpose of fixing the taxable income to interest on indebtedness not exceeding one half the sum of bonded indebtedness and
paidup capital stock is also charged to be wanting in due process because discriminating between different classes of
corporations and individuals.

4. It is urged that want of due process results from the provision allowing individuals to deduct from their gross income
dividends paid them by corporations whose incomes are taxed, and not giving such right of deduction to corporations.

5. Want of due process is also asserted to result from the fact that the act allows a deduction of $3,000 or $4,000 to those
who pay the normal tax, that is, whose incomes are $20,000 or less, and does not allow the deduction to those whose
incomes are greater than $20,000; that is, such persons are not allowed, for the purpose of the additional or progressive tax, a
second right to deduct the $3,000 or $4,000 which they have already enjoyed. And a further violation of due process is
based on the fact that for the purpose of the additional tax no second right to deduct dividends received from corporations is
permitted.

6. In various forms of statement, want of due process, it is moreover insisted, arises from the provisions of the act allowing a
deduction for the purpose of ascertaining the taxable income of stated amounts, on the ground that the provisions discriminate
between married and single people, and discriminate between husbands and wives who are living together and those who are
not.

7. Discrimination and want of due process result, it is said, from the fact that the owners of houses in which they live are not
compelled to estimate the rental value in making up their incomes, while those who are living in rented houses and pay rent are
not allowed, in making up their taxable income, to deduct rent which they have [240 U.S. 1, 24] paid, and that want of due
process also results from the fact that although family expenses are not, as a rule, permitted to be deducted from gross, to
arrive at taxable, income, farmers are permitted to omit from their income return certain products of the farm which are
susceptible of use by them for sustaining their families during the year.

So far as these numerous and minute, not to say in many respects hypercritical, contentions are based upon an assumed
violation of the uniformity clause, their want of legal merit is at once apparent, since it is settled that that clause exacts only a
geographical uniformity, and there is not a semblance of ground in any of the propositions for assuming that a violation of such
uniformity is complained of. Knowlton v. Moore, 178 U.S. 41 , 44 L. ed. 969, 20 Sup. Ct. Rep. 747; Patton v. Brady, 184
U.S. 608, 622 , 46 S. L. ed. 713, 720, 22 Sup. Ct. Rep. 493; Flint v. Stone Tracy Co. 220 U.S. 107, 158 , 55 S. L. ed.
389, 416, 31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312; Billings v. United States, 232 U.S. 261, 282 , 58 S. L. ed. 596,
605, 34 Sup. Ct. Rep. 421.

So far as the due process clause of the 5th Amendment is relied upon, it suffices to say that there is no basis for such reliance,
since it is equally well settled that such clause is not a limitation upon the taxing power conferred upon Congress by the
Constitution; in other words, that the Constitution does not conflict with itself by conferring, upon the one hand, a taxing
power, and taking the same power away, on the other, by the limitations of the due process clause. Treat v. White, 181 U.S.
264 , 45 L. ed. 853, 21 Sup. Ct. Rep. 611; Patton v. Brady, 184 U.S. 608 , 46 L. ed. 713, 22 Sup. Ct. Rep. 493; McCray
v. United States, 195 U.S. 27, 61 , 49 S. L. ed. 78, 97, 24 Sup. Ct. Rep. 769, 1 Ann. Cas. 561; Flint v. Stone Tracy Co.
220 U.S. 107, 158 , 55 S. L. ed. 389, 416, 31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312; Billings v. United States, 232
U.S. 261, 282 , 58 S. L. ed. 596, 605, 34 Sup. Ct. Rep. 421. And no change in the situation here would arise even if it be
conceded, as we think it must be, that this doctrine would have no application in a case where, although there was a seeming
exercise of the taxing power, the act complained of was so arbitrary as to constrain to the conclusion that it was not the
exertion of taxation, but a confiscation of property; that is, a taking [240 U.S. 1, 25] of the same in violation of the 5th
Amendment; or, what is equivalent thereto, was so wanting in basis for classification as to produce such a gross and patent
inequality as to inevitably lead to the same conclusion. We say this because none of the propositions relied upon in the
remotest degree present such questions. It is true that it is elaborately insisted that although there be no express constitutional
provision prohibiting it, the progressive feature of the tax causes it to transcend the conception of all taxation and to be a mere
arbitrary abuse of power which must be treated as wanting in due process. But the proposition disregards the fact that in the
very early history of the government a progressive tax was imposed by Congress, and that such authority was exerted in
some, if not all, of the various income taxes enacted prior to 1894 to which we have previously adverted. And over and
above all this the contention but disregards the further fact that its absolute want of foundation in reason was plainly pointed
out in Knowlton v. Moore, 178 U.S. 41 , 44 L. ed. 969, 20 Sup. Ct. Rep. 747, and the right to urge it was necessarily
foreclosed by the ruling in that case made. In this situation it is, of course, superfluous to say that arguments as to the
expediency of levying such taxes, or of the economic mistake or wrong involved in their imposition, are beyond judicial
cognizance. Besides this demonstration of the want of merit in the contention based upon the progressive feature of the tax,
the error in the others is equally well established either by prior decisions or by the adequate bases for classification which are
apparent on the face of the assailed provisions; that is, the distinction between individuals and corporations, the difference
between various kinds of corporations, etc., etc. Ibid.; Flint v. Stone Tracy Co. 220 U.S. 107, 158 , 55 S. L. ed. 389, 416,
31 Sup. Ct. Rep. 342, Ann. Cas. 1912B, 1312; Billings v. United States, 232 U.S. 261, 282 , 58 S. L. ed. 596, 605, 34
Sup. Ct. Rep. 421; First Nat. Bank v. Kentucky, 9 Wall. 353, 19 L. ed. 701; National Safe Deposit Co. v. Stead, 232 U.S.
58, 70 , 58 S. L. ed. 504, 510, 34 Sup. Ct. Rep. 209. In fact, comprehensively surveying all the contentions [240 U.S. 1, 26]
relied upon, aside from the erroneous construction of the Amendment which we have previously disposed of, we cannot
escape the conclusion that they all rest upon the mistaken theory that although there be differences between the subjects
taxed, to differently tax them transcends the limit of taxation and amounts to a want of due process, and that where a tax
levied is believed by one who resists its enforcement to be wanting in wisdom and to operate injustice, from that fact in the
nature of things there arises a want of due process of law and a resulting authority in the judiciary to exceed its powers and
correct what is assumed to be mistaken or unwise exertions by the legislative authority of its lawful powers, even although
there be no semblance of warrant in the Constitution for so doing.

We have not referred to a contention that because certain administrative powers to enforce the act were conferred by the
statute upon the Secretary of the Treasury, therefore it was void as unwarrantedly delegating legislative authority, because we
think to state the proposition is to answer it. Marshall Field & Co. v. Clark, 143 U.S. 649 , 36 L. ed. 294, 12 Sup. Ct. Rep.
495; Buttfield v. Stranahan, 192 U.S. 470, 496 , 48 S. L. ed. 525, 535, 24 Sup. Ct. Rep. 349; Oceanic Steam Nav. Co. v.
Stranahan, 214 U.S. 320 , 53 L. ed. 1013, 29 Sup. Ct. Rep. 671.

AFFIRMED.

Mr. Justice McReynolds took no part in the consideration and decision of this case.

"But even if the Congress itself should make a law which is contrary to the Constitution, must the people obey it? - No." -- Arthur J. Stansbury,
Author: "An Elementary Catechism on the Constitution" (1828)

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