"Congress," he said, "has adopted as the minimum income for the purpose of taxation the limit of four thousand dollars. This limit may be said to divide the upper from the lower middle class, financially speaking, in the larger cities, or to divide the middle class from the wealthy in the country districts." (Opening argument by William D. Guthrie, in support of the contention that the income-tax law of 1894 was unconstitutional.)
Attention is next asked to what seems to be by far the most serious point in this whole matter, and which has not as yet attracted public attention in any marked degree. The American people have been trying an experiment as a nation which has never before been attempted by any other nation—namely, that of universal suffrage, by which the power to elect legislators and shape the policy of the Government has been put under the control of those who, through no fault of their own, have not enjoyed such educational facilities as will enable them independently to form correct opinions on great constitutional, legal, financial, or economic questions, thereby creating almost endless possibilities for injudicious legislation. How such possibilities were being made actualities in the case of the income-tax statute of 1894 can be made evident to almost any one who makes himself fully acquainted with the circumstances attendant on its inception and almost concurrent legal adjudications and contentions.
The members of the convention that framed the Constitution of the United States had the very questions before them that have already been in issue before the American people, and may at no distant day be again presented for their serious consideration. It was inequalities in methods and facilities for the raising of revenue among the States of the Confederation for the support of the Federal Government that threatened the existence of the Confederation and necessitated the assemblage of the Constitutional Convention. And the members of this convention, taught by experience, incorporated in their work the provisions respecting the exercise of the power of taxation, the meaning and validity of which are now called in question. And in so doing they gave to the people of the United States an instrument of which one great feature, if not its chief feature, and one not recognized as it ought to be, is that it guards the rights of minorities as no other governmental instrument devised by mortal
persons derived from any kind of property, including rent and the growth and produce of lands, and profits made upon the sale of land if purchased within two years. Every element that could make real or personal property a source of value to an owner was taxed. An excise duty was also imposed upon income derived from any profession, trade, employment, or avocation. The tax upon persons generally was not upon their entire income, bat on the excess over and above the sum of four thousand dollars. All persons having incomes of four thousand dollars or under were exempt.
