66.4 HARVARD LAW REVIEW "The element of personal ability or services in acquiring the income may be disregarded. It enters into all income and causes the returns from an occupation. But it has not been deemed important in the taxa- tion of property, and need not be deducted from an assessment." ^°° Judge Stone considered the contention more at length. He con- cedes arguendo the contention of the complainant that "it is the recipient of the income that is taxed, not his property," ^°^ and answers it by saying: "It does not necessarily follow from this definition that the plaintiff is subject to income tax only in the state of his residence. It means, rather, that he is subject to income taxation only in those jurisdictions which protect him in the production, creation, receipt, and enjoyment of his income. If he lives in Illinois, and has in Oklahoma the property or the business from which his income flows, does not the latter state truly protect him in the privilege of producing, creating, receiving, and erjoying that income when it permits and protects his business from which the income flows? How is that affected by his residence?" ^"^ "» 250 Fed. 883 (1918). 101 250 Fed. 873, 875 (1918). This statement of the complainant's contention is taken from a quotation in his brief from State ex rel. SaUie F. Moon Co. v. Wisconsin Tax Commission, 166 Wis. 287, 163 N. W. 639 (1917). Judge Campbell, in his dis- senting opinion in Shaffer v. Howard, relies on this statement of the Wisconsin court and on another from the same tribunal in Manitowoc Gas Co. v. Wisconsin Tax Commission, 161 Wis. iii, 152 N. W. 848 (1915). The Moon case held that income received by a resident stockholder after the effective date of the income tax law was taxable, although its economic source was a surplus in the hands of the corporation prior to that date. The Manitowoc Gas case held that interest due a non-resident on bonds issued by a domestic corporation was not income "derived from sources within this state" within the meaning of the Wisconsin statute, since "the law levying an income tax upon nonresidents 'upon such income as is derived from sources within the state or within its jurisdiction' must be construed to mean such income as issues directly from property or business located within the state, and not income from loans made therein, though, as here, secured by a trust deed upon property situated within the state" (161 Wis. in, 115). The inapphcability of the analysis of the Wisconsin tax in this opinion to the problem involved in Shaffer v. Howard is evident from an earUer statement of the Wisconsin court in the same case, which reads as follows: "If an income be taxed, the recipient thereof must have a domicile within the state or the property or business out of which the income issues must be situated within the state so that the income may be said to have a situs therein" (161 Wis. in, 114-15). This deprives the contention of Mr. Shaffer against the Oklahoma tax of any support from the Wisconsin court's interpretation of the basis of the Wisconsin tax. That tax was partly on persons, and partly on income, irrespective of the recipient. "» 250 Fed. 873, 875-76 (1918).
