The law of friendly societies, and industrial and provident societies, with the acts, observations thereon, forms of rules etc., reports of leading cases at length, and a copious index

Bibliographic data

Monograph

Identifikator:: 875232663

URN:: urn:nbn:de:zbw-retromon-2698

Document type:: Monograph

Title:: The law of friendly societies, and industrial and provident societies, with the acts, observations thereon, forms of rules etc., reports of leading cases at length, and a copious index

Place of publication:: with the acts, observations thereon, forms of rules etc., reports of leading cases at length, and a copious index$gTenth edition, revised and enlarged

Publisher:: Shaw and Sons

Year of publication:: 1881

Scope:: 1 Online-Ressource (XII, 303 Seiten)

Digitisation:: 2017

Collection:: Economics Books

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APPENDIX 1 Eisner, As CoLLEcToR OF UNITED STATES INTERNAL REVENUE FOR THE THIRD Districr oF THE STATE OF NEW YORK v. MACOMBER (252 U. S. 189) ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK No. 318. Argued April 16, 1919; restored to docket for reargument May 19, 1919: reargued October 17, 20, 1919. Decided March 8. 1920 Congress was not empowered by the sixteenth amendment to tax, as income of the stockholder, without apportionment, a stock dividend made lawfully and in good faith against profits accumulated by the corporation since March 1, 1913 (p. 201). Towne v. Eisner, 245 U. S. 418. The revenue act of September 8, 1916 (ec. 463, 39 Stat. 756), plainly evinces the purpose of Congress to impose such taxes and is to that extent in conflict with rade, § 2, clause 3, and Article I, § 9, clause 4, of the Constitution, pages 199, 217. These provisions of the Constitution necessarily limit the extension, by con- struction, of the sixteenth amendment (p. 205). What is or is not ‘‘income” within the meaning of the amendment must be determined in each case according to truth and substance. without regard to form (p. 206). [ncome may be defined as the gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital (p. 207.) Mere growth or increment of value in a capital investment is not income; income is essentially a gain or profit in itself of exchangeable value, proceeding from capital, severed from it, and derived or received by the taxpayer for his sepa- rate use, benefit, and disposal (Id.). stock dividend—evincing merely a transfer of an accumulated surplus to the capital account of the corporation—takes nothing from the property of the corporation and adds nothing to that of the shareholder; a tax on such divi- dends is a tax on capital increase and not on income, and to be valid under the Constitution such taxes must be apportioned according to population in the several States (p. 208) Affirmed. \ The case is stated in the opinion. Mr. Assistant Attorney General Frierson for plaintiff in error: Stockholders have such an interest in the earnings and profits of a corporation that the same are within the power of Congress to tax as income even before they are divided. (Collector v. Hubbard, 12 Wall. 1; Southern Pacific Co. ». Lowe, 247 U. S. 330, 336; Lynch v. Turrish, 247 U. S. 221, 228; Bailey v. Railroad Co., 22 Wall. 604, 635, 636; Lynch ». Hornby, 247 U. S. 339, 343.) The right of Congress to tax undivided profits can not be destroyed by the issuance of stock certificates to represent them; and, since the certificates of stock in this case represent earnings of the corporation acerued subsequently to March 1, 1913, they are clearly made taxable as income by the act of 1916 (c. 463, 39 Stat. 756). (Peabody v. Eisner, 247 U. 8. 347; Bailey ». Railroad Co., 22 Wall, 604, 635; Swan Brewery Co. (Ltd.) ». Rex, (1914) A. C. 231, 234-236.) Towne ». Eisner (245 U. S. 418) does not control this ease. (1) It merely de- cides that the stock dividends then before the court, paid out of earnings acerued prior to March 1, 1913, were not income within the meaning of the act of 1913. Nothing said in the opinion can be construed as challenging the power of Con- gress to tax, as the income of stockholders, the profits of a corporation even before they are divided, and much less to tax a certificate of stock issued to represent such profits. (2) The most that can be said of the opinion is that it holds that HU

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