Hylton v. United States, 3 Dallas (3 U.S.) 171; 1 L. Ed. 556 (1796)
Facts—This was a case brought from the circuit court in Virginia challenging the 1794 congressional law imposing a tax on carriages. It was stipulated that Hylton had 125 such vehicles (undoubtedly a ploy to establish a sufficient monetary amount to give standing in a federal court), which he refused to pay the tax on. The Circuit Court was equally divided on the constitutionality of the tax.
Question—Was the congressional tax on carriages constitutional?
Reasons—(3–1, with J. Wilson having expressed his support for the tax while riding circuit). Each justice expressed his view separately.
J. Chase argued that the constitutionality of the tax centered on the distinc- tion between direct and indirect taxes. Article I, Section 2 provides that direct taxes should be apportioned among the states by population whereas Article I, Section 8 provides that other “taxes, duties, imposts, and excises” must be laid uniformly. Chase believed the carriage tax was a duty that was constitu- tional as long as it was, like this tax, laid uniformly. Chase further registered his belief “that the direct taxes contemplated by the Constitution are only two, to wit, a capitation, or poll tax, simply, without regard to property, profession or any other circumstances; and a tax on LAND.” He further noted that “it is unnecessary, at this time, to determine whether this court, constitutionally possesses the power to declare an act of Congress void, on the ground of its being made contrary to, and in violation of, the Constitution.”
J. Patterson agreed citing the requirement for uniformity of direct taxes as the Framers’ way of protecting the Southern states that had slaves and “exten- sive tracts” of “thinly settled” and “not very productive” land. He considered taxes on “consumable commodities” to be indirect taxes, subject only to the requirement for uniformity.
J. Iredell agreed stating that “As all direct taxes must be apportioned, it is evident that the Constitution contemplated none as direct but such as could be apportioned.” Such direct taxes would include “a land or a poll tax.” J. Cushing dissented without citing his reasons.
Note—The Constitution did not define direct or indirect taxes. The Supreme Court’s decision in Pollock v. Farmers’ Loan & Trust Co. (1895) later in- validated the national income tax as an improper direct tax, but the Sixteenth Amendment subsequently overturned that decision.