VIII. THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT 85
America's embarrassing position if the late war had come before adoption of Income Tax Amendment. Limitations of federal taxing power under the Constitution. Meaning of "uniformity." Apportionment of "direct taxes." The Supreme Court decision in the Income Tax cases in 1894 a reversal of long settled ideas. The Income Tax Amendment an example of recall of judicial decisions. Implied limitations on federal taxing power (compensation of federal judges, due process clause of the Constitution, no power to tax property or governmental activities of the states).
IX. CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS? 97
No express prohibition of such taxation; it lies in an implied limitation inherent in our dual system of government. Discussion of doctrine and its development by the Supreme Court. Effect of the Income Tax Amendment. Present dissatisfaction with doctrine and efforts to abolish it.
X. IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL? 106
Nature of the tax. An interference with state power to grant corporate franchises. Nature of our dual government and Supreme Court decisions on the subject discussed. The debate in Congress.
XI. THE CORPORATION TAX DECISION 122
Importance of the decision likely to be overlooked. Criticism of the
Court's arguments. Effects of the decision.
XII. THE FEDERAL GOVERNMENT AND THE TRUSTS 129
Origin and history of Sherman Act. Its meaning now clear. Earlier uncertainties owing chiefly to two questions—What is interstate trade and Does the act enlarge the common-law rule as to what restraints were unlawful? How these questions have been settled. Statement of the common-law rule. Incompatibility between the law and present economic conditions. Suggestions for legal reform. The holding company device, its abuses and the possibility of abolishing it. Advantages of the scheme of federal incorporation.