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THE HAWAIIAN STAU, SATURDAY,' APRIL 30, 1910. ELEVEN DELEGATE KALANIANQLE harpSignS TOM SHARP, The Painter Elite Building Phone 397 Signs Of All Kinds. Scenic Work, Decorating, Giaining Paper Hanging, Etc., Etc. SSUES CHALLENGE IS GORPQRAT QNTAX CONSTITUTIONAL? (Continued from Pago 5.) the law Imposing this federal tax Is before the Supremo Court of the Uni ted States for Us consideration and It is the general expectation that this court will dccldo the question before the time arrives to pay the tax. If the court should declare the law uncon stitutional, of course no further at tempts would be mado by any of tho federal officers to collect tho tax and nothing would remain to bo done by tho companies which have made their returns. But If, for any reason, tho decision should be delayed, or If the decision should sustain the law In some parti culars and declaro It Invalid In other particulars, then It behooves com panies paying their taxes to do so un der proper protest and to follow that procedure required by tho federal statutes as a basis for any subsequent effort to recover tho taxes so paid or any part of them. Previous Income Tax Laws. It is not the purpose of this article to attempt to forecast the decision of tho Supreme Court but a brief state ment of the outlines along which that make clear the form of protest which should be used In the event that it should be necessary for companies, for their own protection, to pay their taxes under protest. , . , Income taxes levied by tho federal government arc no novelty. Such taxes panles doing business In America, that and ordinarily one Is, In tho eyes of thd tho apropriato United States Circuit their Income shall include Income law, regarded as paying his taxes vol- Court against tho local Collector of from business transacted and capital uutarlly unless he does so under coer- Internal Hovenuo, or a suit may be Invested In America-. "Incomo from clon; nnd ordinarily, In -the absenso of Instituted against tho United States In Ml sources" and "Income from capital a statute tho more tiling of a written the Court of Claims or In any United invested" would certainly Include In- protest, and a payment thereunder States District or Clrcut court accord come from real property, from per- or thereafter is not a payment under lng to tho amount Involved, sonal property and by way of Interest coercion. Income From United States Bonds- on statu and municipal bonds. It Federal Decisions Deflnlna Involun- 1,1 tho courso ot thls artlcl noth would thoroforo appear, at first blush, . . . .ink' has been said about incomo deriv- as though tho federal tax of 1894, held! ' , , . od as interest from United States Invalid In the Pollock case. " l"ulululu -.bonds. Congress, If It has power to , , , . , , , , ' I examine the federal statutes nnd learn tax incomes nt nil In tho mannor nt But if tho Pollock decis on d d not . , . . ilu ""-unies ni an, in uio manner ni- i irnm rnim wnnr in inn n rnnnr nro- . .. . .i . . . - t-. . . express overrule prior adjud.ca- ceduro t(J M , ' for ,na ZZZJZ,. incomo tax' STSurh? le'""' Th war of Interest from United pedod of th Civ War. -d ot bond.. Many of the United frnalairous cases it at least reached' y provIdes thal a" ,aws relat,nB , States bonds, however are Issued un rS'lTS var pro- under-standing of those prior adjjudi-1 . ' ZTLTtLn, ' V 8. ' b ., . ,, mlnf , ',,,, as applicable to the federal taxes on all taxes or duties of the United 'fTlLT!: I" nothing in tho states, as In the case of the recent Mt... u u i, v.am.c. California law. Kent, Judge Story, and Prof, pomeroy. And a factor In tho case which may I statute of 1902. authorzlng the Pana- After a careful examination of the ma Canal bonds. As repeals by Impll- i cases of Chescbruugh vs. United cation are not favored In tho law, It i f i "o.. .. ii i J States, 192 U. S. 253, and Herold vs. Ms probable that the statute which au tA i 'i,. .u, f 'Kahn, 159 Fed. COS, with prlv ous do-, thorlzed bonds and provided that thoy today, is so changed, that of tho nine. . 41. ' ' ' ,.,,,,, .:. , ' ... members of the present court.only four were on tho bench when tho Pol sided with tho majority while tho ' accompanied with written protest, and - that ho court would hold ha other two wrote long and vigorous dissents icislons tho writer has reached the 'ihould bo exempt from taxation woulii conclusion that It is quite doubtful ho construed with tho statute impos I whether the mere payment of taxes. IB the federal tax on corporations Note: Since this article was writ- is sufficient to make the payment in- Income derived as interest from United voluntary and to form the basis of n States bonds was not subject to tho right of recovery under the federal , federal tax on corporations, where Htnhitna. It la tlinvnfnrn nrlvlor.hln nnt SUcll bonds had been Issued lllldor ten, the death of Mr. Justice Brewer, tQ pay theg(j taxcg unU1 nfter Jun(j federa, statutes exempting them from removes from the Supremo Bench one .. . .. . . - . taxation. Any companies holding such of the two survivors of the majority . fomal domand by tho loca, collector , 'J"nls would therefore want to refer in the Pollock case. jo Interna, nevcnue so that there ' to "o incomo derived from that source If the Pollock case is to bo over- may ,e no qucsti0n but that the ( ln tno same way in its protest and ap ruled by the Supremo Court at thlSjaxos arcj paid un(er coercion. penl as It would refer to Income de- tlme, tho federal tas. on, corporations, p Taxea under Protest Onlv ! rIvotl froni state or municipal bonds. In the opinion of the writer, will nro- I' -Tv" bably be sustained, as the objections to that tax, such as lack of uniformity, Illlo Tribune, April 2C: is; bcllcvo in home rule, and If I had Delegato Kalanlanaolo has written not worked hard to try to defeat tho a letter to Supervisor Stephen Desha bl introduced in Congress, the door u'nnlit hfrn hnnn nnnnnil fnr ftirflinr In which ho issues a challenge to , , , ., , . ... . legislation by Congress In purely lo- Edltod Ewallko of to Malamalama, cal matters Jn oth0r instances, and tho Democratic paper published ln the Impression would havo been given Hawaiian In this city, to' debate on tho that the peoplo f Hawaii were not land la-w amendments. It appears capable of running tnelr own affairs, that for some time past tho Malama- "i Went before them and explnln- lama has been criticizing the attltudo cd to them that tho peoplo wore cap. taken by tho Delegate In referenco to ablo of making a good law themselves. his stand on the land law proposition, History has shown, oven beforo an and'the friends of the delegate, who nexatlon, that the Hawallans were aro ablo to read Hawaiian, state that a"hie to run their o'wn government, and these attacks liavu been very bltUT i feared that if tho door were thus and havo hinted that the delegato woa opened, the next thing might be gov- not purely disinterested ln his mo- ernment by commission. 1' had to ex- tlves. plain the local situation to open tho ln his letter to Dssha tho dolegate eyes of some of tho Congressmen with states that he on his return to Ha- regard to these matters wall will come to Hilo, when he will "By thus closing tile door a good Second Notice. The law imposing federal taxes on want of power in the federal govern-1 corporations provides that all com- J BE PREPARED Chrmborlaln's Colic, Cholera nnd ww. n, th nnrin.i nf the 1 ment to tax cornoratlons. and the like panics shall bo notified of the amount Dlanhoca Remedy Is ju.st what Its Civil War by various statutes enacted 'objections, do not appear to rest ouoE thc assessments for which they ar0 name implies. For pains In the between 1801 and 1870. The income 'a sound foundation, so far as the , Respectively liable on or efore tho stomach and cramp colic it has no taxes levied ln those times were sub-'writer has been enabled to examine , ,lrst dav of .Tund. 'This Is the first equal, At this season of the year scquently abolished. In 1894, ln a time into the question. Without overruling 1,otlce whioh the company will re- when -fresh fruit is plentiful, ailments of profound peace, another Income tax tho Pollock case, however, the Sup- ceivo- Tno tax ,s thon l?ayauIc n "r of this kind aro always y-'ovalnnt !inti was levied and tho law imposing this remc Court especially in view of the before tne thirtieth day of June If you can do no hotter tnnu to keep tax was declared unconstitutional by language in the law which recites not l,altl '' that tlm. 11 is the luty i botiio of this rem .ay always at tho United States Supreme Court in that the tax imposed is a special ex- of the collector to give tho company mn,i. p0r sale by an r.jair.rB Benson 1895 in the case of Tollock vs. Farm- else tax with respecct to the carrying a second notice nnd make a demand SnlIth & Co, agents for Hawaii. ers' Loan and Trust Co. Tho Incomf on or doing business, may attempt to tor tllc payment ot tne tax. u tne tax tax of 1894 imposed a percentage tax distinguish the present law from the is n0t na,d within ten days after this on all Incomes, whether derived from income tax law Is valid In so far as second notice and demand a penalty business transacted or Invested capl-- It 'imposes a tax on Income derived-is incurred which amounts to five per, tal and whether earned by individuals from business transacted and holding cent of tno taxes and interest thereon or corporations. Tho tax was thus im- that in so far as it attempts to impose at the rate of one per cent per month , ,iortvoi frnm tho -: , , , . , 1 f rom th thirtieth day of Juno. If posed upon Incomes doriveu trom iu a tax on incomo derived from real ., , i .v,do. . , the company, before paying tho tax,' following sources: property, personal property or. by way. ,, ' , I T --nniv -i . , i i ; . , . awaits the receipt of this second no- 1. Income from real property. i of interest from state or municipal ., , , , , , 4u ! t f. i,i0co urniiprtv , . , r i i tlcO and demand and then, within the 2. Income, from business property uomis it js valid. In -other words, in-! . .... , , ,. i T . ,, ,,... tnnsapted , , 'ten days after its receipt, to avoid tho 3. Income from business transacted t d f coluicmning the law as a , . . . t. . , , i " nAnnlfir nnrl 1 n fnrnet nvc trr rnv 1111. I Hncluding earnings of protession- j , d , th p0Uock '7 . B . . I Pine Joh Printing Star Office,. dor protest, it will be just such an involuntary payment of tho tax as was held in the Herold case was sufficient to constitute Involuntary payment cf tho tax and basis of a rght of re- What Form the Protest Should Take. No particular form of protest is re al men), and case, the court may sustain that part 4 Income "by way of Interest on of t)0 aw wnicn m tho Pollock state or municipal bonds. c&sei it Was intimated might have . The Decisions In the Pollock Case. imposed a valid tax If standing alone. There were two hearings and two . , rrfp.c.t that nortion of tho decisions in the Pollock case, and. present.law which appears to be so covery. at both hearings and in both decisions cjcnriy opposed to tho conclusion tho Supreme Court .was unanimously reacueii m the Pollock case. And it of the opinion that, in so far as tho in may justify this sevcrenco of tho valid, quired so long as the protest advises como tax of 1894 taxed Incomo derived from the invalld parts of the law In the collector that the party paying as interest on state or municipal th(J presont case by rcaS0n of the re- the taxes claims that they ara being bonds, the law was InvMid. Beyond ference ln the law Itself to the tax illegally exacted and gives the collcc thlT noint. ln the llrst decision, the ag an .oxcise tax. ' ,tor notice that he Intends to instl- court went no further than to hold w p QhQM Be pajd tuto proceedings or suit to compel that tho tax was Invalid in so far as Protest I tholr repayment. The notica of pro- It taxed income derived from real unaer ' - ; test should conclude with a demand 'property Upon this latter point tho If the time arrives to pay taxes un- Qn thQ collector for tno repayment ot court divided by a vote of six to two, dor protest and no decision has been th(j taxeg SQ pa,d uu(Jer prot08t In Jlr Justice Jackson not participating rendered by tho Supreme Court, it tn3 protest whero p.rt of tho taxes in 'the hearing. In the second decision would he tho proper course to pay the are tQ bo ,,rotcstcd (11Ue taxes on tho of the Pollock case, the court was entire tax under protest. But should ,ncome and renltyJf should bo a Btat0. still unanimously ot the opinion that the court render Its decision before m(mt ofthe amount of lncomo derVed tho tax was invalid In tso far as it the time for the payment of the taxes from rea, .property and the amount tixed Interest derived from state or comes around and should it hold any of tnQ tftX Qn that ,ncome when tho municipal bonds, and also held that part of the tax Imposed by the present tax Qn ,t ,s to be protcsted. A like tho tax was Invalid In so fr.T as It law unconstitutional, that part of the ( statement Bhould be made with refer taxed Income trom real property and tax ought to be refused to the Col-ienco tQ ,ncomo derived from personal income from personal property. Upon lector of Internal Rovenue or at least property or ,ncome derived as Interest this last point the court divided five paid under proper protest, so that t .fnjm gtat(j 0f munlcpal bonds lt the to four Mr Justice Brown joining mlU bc recovered. If tho taxes aro tho lncomQ from hogo gour. nd Mr jSsoJ "reinforcing the ranks Paid under protest before the decl- aro be otested. AUUollgU tho ofthe mlnorUy The majority having !on Is rendered by the Supreme Court ai,parenUy doos not re(lu,ro that lir'tirLor conUn .held JJ ' C,Car'y that the Income tax of 1894, being 7 " , JI, .tat auvisame mm. u miouiu uu, valid in the particular, noted, must "p ' Appeal to Commission mil as a whole, although tho sugges- maf W "" After taxes havo bo( Uon was mado that a tax levied upon hem invanu, so " 1 ? u protest, ,f the Collector of Internal Income derived solely from the tra- T"" .t'l Hovenuo does not refund the taxes an sactlon ot business or the exercise of - m thQ " appeal must be mado to tho Comm.s- a profession might bo good under tno federal constitution as an excise tax, It lt stood alone. ers and Suit After taxes havo boen paid under to tno company paying i . . .,, n,vonllo nt Wash- What Constitutes an ( Involuntary j,ngton for tho rotund of theso tnxe.s. Payment. ! This appeal is made upon forms and Possibility of Law Being Held Invalid in California those who havo grown subject to, the regulations prescnuw Only In Part. accustomed to paying State or City by the Secretary of tho Treasurv anil It Is apparent and, indeed, is Is ft and County taxes under protest are may bo mado by a delivery to the matter of common notorlty, that tho famllar with tho practice which re- local collector for transmission to tho rnn-ress In passing tho law impo-'quires as tho only basis for n suit to commissioner. If tho decision of the In? federal tax on corporations an J recover tho taxes so paid under, pro-lyorse decision by tho Commissioner of other companies Intended to profit by clso tax with respect to tho carrying internal Revenue, suit may bo brought SsuS th0 flHnB Wlth ,U0 to recover tho taxes within two years decision and make this tax strictly a collector of a notice or protest at ho after tho time when tho tax was paid excise tax Tho law Itself characterizes timo of paying the taxes, in which undor protest If tho Commissioner tho tax Imposed as a "special cxcWe tho points of protest aro specifically ( 0f internal Rovonuo delays to render tax with respect to tho carrying on cr urged. This, It should bo remomber. ( i,Is decision upon tho appeal for more doing business." But In describing od. Is tho appropriate proceduro ln than six months from tho dato of ap tho Incomo which forms tho basis of. California with roforenco to State or p0nl, suit may bo brought wthout a tho amount of tho tax, tho law pro- city and county taxes only by graco waiting an ndvorso decision of tho vldes with roforenco to American of tho California- statute. Ordinarily clmmisslonor. If tho decision of tho rnmnmlca that "Income from all.ono wno pays luxua voiumuui in "v uuuiiiubmuiiui id sources' vldes, with referenco to foreign lies that Incomo from vu.ono wnu puja iuaub iuiuiuu... u.iuiiiidoiuiiu. . ... ,-( shall bo Included and pro- entitled to recovor them back sub- will be refunded without suit. Suit ;?:. ;fjj?: JJ.v.; with referenco to foreign com- sequontly oven If erroneous or illegal; to recovor taxes may bo brought in' ;?;:; V.;.; , "Vogue" WALLPAPERS "Vogue" papers represent a now order of things decorative. They are designed and colored to mako proper settings for fur nishings and to produce richer and better effects than has ever been obtained with wall papers. See tho beautiful samples In our show room. Lewers & Cooke, Limited. 177 S. King Street, Honolulu. DELEGATE KALANIANAOLE. - - , call a mass meeting or tho citizens of thing has been accomplished for Ha this city. Ho will then challenge wall, and a precedent has been set Ewallko to appear on tho platform by Congress themselves that wo as a with him and to make his charges, peoplo are capable and ablo to run when tho delegate will answer them, our own affairs Thoy not only leavo In discussing tho amendments tho lt to us to voto for the plebiscite, but delegate writes, referring to tho ds- go further and say Jhat after wo have feat of the clause, providing for ad- decided what wo want to do, It Is up vances to bo made by tho govern- to our own legislature whether to ment to homesteaders as follows: enact a prohibition bill or not This, "Congress wants tho people to bo you will see, shows the high opinion self-supporting and not to bo do- in which wo aro being held as to our pendent on others. What tho gov- fitness to legislate for ourselves It ernment wants Is people who can has been shown, not only to Con work for themselves, and that kind of gross, but to tho wholo world, that people who work themselves up and we are ablo to run our own homo af look after themselves are tho kind fairs. who mako good citizens and good "Had the prohibition bill boon pass Americans. Another objection to tho cd by Congress tho enemies of tho amendment was that such a method welfare of Hawaii could use this pre hnd never' been employed hero be- cedent In tho future This on tho face forc( and that they aid not soo wny of lt would bo tho opening wedgo for thoy should uso lt oven for Hawaii." anybody to come hero and ask Con The del agate also explains his stand gross to pass legislation for Hawaii, on the prohibition measure at great but as it is now, I havo stopped It for length. The bulk of tho letter Is In good, of course unless we should go Hawaiian, and parts of It read about to tho extent of passing laws dotrl as follows: mental to tho Interest of the Torrl I "Possibly- tho Hawallans do not un- tory and tho peoplo therein, derstand about these questions. Now "Tho question was, not as to who they leavo tho matter to tho peoplo ther wo wanted prohibition or not, hero is what I want to oxplnln to tho but as to whether wo wanted homo peoplo of Hawaii Tho main reasnirrulo or not." .. .o. Reach for New Business! The other islands team with people who would patronize Hono lulu if they knew what, when and or whom to buy. The Semi-Weekly Star goes into the homes of those people. Through the Semi-Weekly Star you can inform the Consumers of Kauai, Maui, Hawaii and Molokai what you have to sell, and they will do the rest. An Ad. in the Semi-Weekly Star costs one-third as much as the daily rate. A trial will convince any merchant that he has opened the way into new fields of profitable business. For further information call or telephone the business office of THE HAWAIIAN STAR. -: 4A -is I 1 itti ft n A