640 HARVARD LAW REVIEW of interest on indebtedness, expenses, etc., in assessing the taxable net income. The statement that the legal character of the recip- ient and the source of the income are not significant is not meant to preclude further inquiry into the taxabiUty of income from extra-state business or from interest or other compensation paid by the national government. In determining the constitutionaHty of state taxation of such income, the legal status of the recipient is likely to be of controlling importance.^^ It is doubtless a wholly moot question whether a general state tax on gross income would pass muster with the Supreme Court. No such tax is likely to be levied. It would bear most unequally on different individuals and different enterprises. This considera- tion will probably always receive more weight from legislators than that which will be given to the opposing element that in some in- stances volume of transactions bears a closer relation to the cost of governmental supervision than does the balance at the end of the fiscal year. Such exceptional instances may be taken care of by gross-income taxes in lieu of other taxes. If, however, a state should seek to impose a general tax on gross income, it will have to reckon with Mr. Justice Pitney's opinion in the Oak Creek case, which plainly discountenances the inclusion of receipts from inter- state commerce in such a tax. No actual decision, however, pre- cludes such inclusion. All of the gross income taxes that have been declared unconstitutional have been levies on selected enter- prises. So far as words go, a general tax on gross income can be called "but a method of distributing the cost of government," as readily as can a general tax on net income. And there is an in- dication in Mr. Justice Bradley's opinion in Philadelphia &• South- ern Mail 5. S. Co. v. Pennsylvania ^° that in 1887 the Supreme Court was inchned to think that a general state income tax could levy on receipts from interstate commerce, even though the measure of the tax was gross, rather than net, income. This opinion is referred to by Mr. Justice Pitney in the Oak Creek case, in which he quotes Mr. Justice Bradley as saying: "The corporate franchises, the property, the business, the income of corporations created by a state may undoubtedly be taxed by the state; but in imposing such taxes care should be taken not to interfere " See infra, pages 649 ff. «o 122 U. S. 326, 7 Sup. Ct. Rep. 1118 (1887).
