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The Utah Legislature and the Income Tax Amendment
The Utah Legislature and the Income Tax Amendment
BY STEWART L. GROW
The Sixteenth Amendment to the Constitution of the United States, which authorized a federal income tax, has probably had as much direct effect on the people of the United States as any constitutional amendment. Such a lusty child of the Constitution did not come to fife without long labor and much conflict, and Utah's participation in the birth process forms an interesting chapter.
The proposal that taxes should be raised on incomes was not a new proposal, but Congress had difficulty securing a clear-cut authority to enact a law providing for such a tax. Section 8, Article 1, of the original Constitution gives to Congress the power "to lay and collect taxes." Section 9 limits this power of tax collection by providing that "no capitation or other direct tax shall be laid unless in proportion to the census or enumeration." The question which had caused difficulty was whether the income tax constituted a direct tax. The answer came in 1895, when the U.S. Supreme Court declared unconstitutional the income tax which Congress had passed. The legal reasoning used by the court was to the effect that a tax upon income derived from property is a tax upon property, and so a direct tax.
Frequent heated discussions were held during the following years regarding the advisability of the income tax, and the question reached a climax during the administration of President William Howard Taft. Consideration was given by party leaders to the desirability of re-enacting a law similar to the one that had been declared unconstitutional. The party leaders hoped that the Supreme Court, now changed in personnel, would find it constitutional. However, President Taft took the view that such an act would tend to discredit the permanence of judicial decision. He favored a constitutional amendment; subsequently, Congress proposed the amendment to the legislatures of the several states by a resolution passed on July 12, 1909. The amendment was ratified according to a proclamation of the U.S. Secretary of State dated February 25, 1913. Forty-two states ratified it; three states, Florida, Virginia, and Pennsylvania, apparently took no action on it; and three states, Connecticut, Rhode Island, and Utah, rejected it. Our interest is in Utah, where not only did her legislature consider the amendment and reject it, but did so twice.
The Sixteenth Amendment was first presented in Utah to the dominantly Republican 1911 legislature by Republican Governor William Spry, who, in spite of the fact that the Utah State Republican party platform endorsed ratification of the amendment, urged its rejection in his formal message:
With this message, I transmit a certified copy of a resolution of Congress entitled: "Joint resolution proposing an amendment to the Constitution of the United States," forwarded to me by the Honorable Secretary of State of the United States under date of July 26th, 1910, with the request that the same be submitted to the Legislature of this State for such action as may be had. This resolution provides for an amendment to the Constitution of the United States as follows:
"Article XVI. The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
When ratified by the legislatures of three-fourths of the several states, this amendment shall be valid to all intents and purposes as a part of the Constitution of the United States.
In submitting this proposed amendment for your action, I do so with the recommendation that it be not ratified. While I believe in the taxation of incomes as an equitable method of raising revenues, and while I believe that Congress should have sufficient power to readily raise the necessary revenues in cases of emergency, I am opposed to an amendment which gives to Congress the broad power of taxing incomes at its pleasure. If incomes are to be taxed, the revenues derived therefrom, in my opinion, should go to the states from which such revenues are derived. The government has so many means of raising revenue to meet the public expense and the inland states in particular are so limited in their means to do so, that I am strongly opposed to the Federal Government, through the amendment proposed, encroaching on the rights of taxation that properly belongs to the several states.
In spite of Governor Spry's opposition, a fellow Republican, Senator Carl A. Badger, of Salt Lake City, introduced on the fourth legislative day of the session Senate Joint Resolution No. 1, favoring ratification of the amendment. His action in opposing the governor's recommendations was commented on in the Salt Lake Tribune.
Senator Carl A. Badger of Salt Lake City, Thursday introduced a joint resolution providing for the ratification by the legislature of the State of Utah of the proposed amendment to the constitution of the United States authorizing an income tax. In this action Senator Badger adopts a course precisely opposite to that advised by Gov. Spry in his message to the legislature.
The governor recommended that the legislature reject the proposed amendment, as he believed that the states and not the government should levy this tax. Senator Badger said that the governor very properly voiced his individual sentiments in his message to the legislature but that there was nothing in the message that bound the legislature to follow the recommendations of the governor.
"The proposed amendment has been endorsed by all parties and is therefore not a partisan measure," said Mr. Badger. "Nearly all the members of this legislature were elected on a platform pledged to the ratification of this proposed amendment and from that fact I believe that the resolution will be carried."
Although Senator Badger had hoped to have the resolution referred to the Committee on the Judiciary, it was referred, January 13, to the Committee on Federal Relations, which committee gave favorable consideration to the resolution and issued its report February 9.
Your Committee on Federal Relations, to whom was referred Senate Joint Resolution No. 1, by Mr. Badger, entitled, "A joint resolution ratifying the proposed amendment of the Constitution of the United States authorizing an income tax," beg leave to report that they have had the same under consideration and recommend that the same be adopted.
Respectfully,J. S. Funk, Chairman
One week later, February 16, the Senate gave its Third Reading to the resolution and passed it with a vote of twelve ayes, two nays, and four absent and not voting. The roll call indicated the following voting pattern.
Ayes: Badger (R), Burton (R), Funk (D), Iverson (R), Kelly (R), Kuchler (R), Marks (R), Olson (D), Sevy (R), Smith (R), Stookey (R), Mr. President
(R) Nays: Horsely (R), Hyde (R)
Absent: Booth (R), Lunt (R), Williams (R), Wilson (R)
Because only the results and none of the debates are recorded, the legislative journals of the Utah State Legislature are remarkably bare of any legislative color surrounding its actions. However, a Tribune writer described the Senate atmosphere at the time of passage:
Senate joint resolution No. 1 by Badger, passed the Senate Friday afternoon by a vote of 12 ayes and 2 nays, and 4 absent and not voting. The resolution ratifies the proposed amendment to the constitution of the United States authorizing an income tax.
It was passed after more than an hour of oratory, in which two members of the Senate took part. Senator Badger author of the resolution spoke for a full half-hour, during which he urged that the resolution be passed. Senator Olson spoke for nearly a half-hour in favor of the resolution, delivering the longest speech that he has yet delivered in the Senate. He was listened to with close attention, and at the close of his speech was liberally applauded by members of the senate and spectators.
In explaining his vote against the resolution, Senator Hyde said that he believed in an income tax, but not such a one as contemplated by the resolution. He said, among other things, that in his opinion the government had been trying to conserve for itself the best natural resources which rightfully belonged to the states.
It is interesting to note that up until this time no action had been taken in the House toward ratification of this amendment. Upon passage by the Senate of the ratification resolution, the same was referred to the House where it arrived February 17, and was referred to the Committee on Judiciary. Committee consideration of the measure produced a definite split in the committee's five-man membership. The minority report recommended passage of the amendment, and the majority report recommended the bill not be passed.
The House at this time was caught in the usual end of the session rush and did not get around to considering the bill until March 13, which was four calendar days over the sixty-day session limit. However, the cloth had been placed over the clock, and the session continued as of legislative day March 9. During the rush, there was little time for debate, and the majority report, which recommended that the ratification resolution not be passed, was accepted by a vote of thirty-one ayes, ten nays, and four absent and not voting. Distribution by party is as follows:
Ayes: (Those opposing ratification) Allison (R), Anderson (R), Bickmore (R), Cole (R), Crapo (R), Dahlquist (R), Day (R), Eardley (R), Ekman (R), Farnsworth (R), Funk (R), Grow (R), Hayes (R), Henrie (R), Hines (R), Holman (R), Kearns (R), Langston (R), Madsen (R), Miller (R), White (R), Packard (R), Pope (R), Richardson (R), Russell (R), Smith (R), Spencer (R), Tobias (R), Woolley(R), Ziemer (R), Mr. Speaker (R)
Nays: (Those favoring ratification) Harshberger (D), Jones (D), Meeks (R), Morris (D), Nebeker (D), Page (D), Peterson (D), Sanderson (R), Seeley (R), Welling (D) Absent: McRae (R), Stack (R), Thomely (R), Wooton (R)
The vote was split pretty well on party lines, with all but three of the Republicans voting against ratification of the income tax amendment and all of the Democrats voting for ratification. This makes an interesting political commentary inasmuch as the platforms of both parties supported ratification.
The defeat of the drive for ratification apparently caused little emotion among the populace, for the major papers devoted very little space to that item. Commented the Deseret News in a small column entitled "Legislative Sidelights,"
With the cloth over the clock to permit the legislature to continue, the bill was defeated in the House on the last day of the session.
Said the Tribune,
In attempting to interpret the party platform with reference to the liquor question the legislature overlooked the plank in the platform pledging the legislature to ratify the proposed amendment to the constitution authorizing an income tax. The Senate passed the resolution ratifying the proposed amendment but the House killed it.
One reason for the lack of interest in the defeat of the amendment may have been that it was still somewhat distant from being ratified by the necessary number of states. A report of its 1911 status indicated that
Nine more states must ratify the proposed income tax amendment before it can become a part of the federal constitution. Reports received here from the capitals of the forty-six states show that the amendment has received favorable action in the joint legislatures of twenty-six.
Vermont, Rhode Island and Utah have refused to ratify the amendment this year, while New Hampshire has taken favorable action in only one house of the legislature. Among the sixteen which have not acted, the question is pending in Louisiana, New York, Mass., Maine, Conn., Penn., and New Jersey.
The matter is scheduled to come before the Florida legislature next month. West Virginia has "postponed" action and Arkansas, Tenn., Wyoming, Minnesota and Delaware have not considered the matter.
The second consideration of the income tax amendment came shortly after the start of the Tenth Session of the Utah State Legislature, January 13, 1913. The party alignment in the Senate remained exactly the same as the previous legislature, with two Democrats and sixteen Republicans. In the House, however, the Democrats had picked up seven seats and now held fourteen as compared with thirty-one for the Republicans.
Inasmuch as Senator Badger did not return to the Senate in 1913, Senator Benner X. Smith, of Salt Lake, became the sponsor of ratification in the Senate. On the first day that legislative business was transacted, January 15, 1913, Smith introduced Senate Joint Resolution No. I. Comment on Senator Smith's action and the general status of the amendment are found in the following Tribune item.
The ratification of the proposed amendment to the United States Constitution authorizing the levying of an income tax is proposed in a Senate Joint Resolution introduced yesterday by Senator Benner X. Smith of Salt Lake. The resolution will lie on the table for one day, after which it will probably be referred to the Committee on State Affairs and Federal Relations.
This proposed amendment to the federal constitution was proposed by Congress and it becomes a part of the constitution when ratified by the legislatures of three fourths of the states. At present this proposed amendment has the ratification of all but two of the three-fourths of the states in the union.
Two years ago an effort by the Utah Legislature to ratify the proposed amendment failed. The Senate passed "a resolution ratifying the amendment, but the House declined to do so. Ratification two years ago was defeated largely through the efforts of Governor Spry, who opposed the amendment on the ground that the revenue from the taxation of the incomes of the residents of the state should go to the state and not to the federal government.
By the time of the second introduction of the income tax resolution in the Utah Senate, the ratification of the amendment on a national basis was almost achieved; and there developed considerable rivalry among several states throughout the nation to be the state to complete ratification. The following item is illustrative.
In an effort to beat New Jersey to the honor of being the thirty-sixth state to ratify the income tax amendment to the federal constitution, New Mexico legislative leaders tonight planned for immediate action by the house when it reassembles tomorrow afternoon.
A poll of the house shows an overwhelming majority of its members favorable to the joint resolution of ratification adopted by the Senate Saturday and it is planned to suspend the rules and rush the measure to immediate adoption.
The rivalry also took root in Utah, and Senator Smith took action to secure immediate consideration of his resolution. The Committee on State Affairs and Federal Relations had not considered the measure, so Senator Smith asked unanimous consent of the Senate to have it taken from the committee and given immediate consideration. The Senate agreed to his motion, and the resolution passed the Senate February 3 by a vote of thirteen to four. An analysis of the vote by party indicates that the two Senate Democrats favored its adoption, as did a large majority of the Republicans. Four Republicans, including Senate President Henry Gardner, voted in opposition.
The same day the Senate passed and sent to the House Senate Joint Resolution No. 1, Mr. Milton H. Welling introduced in the House a resolution of ratification. The House Journal states:
House Joint Resolution No. 4 was read first and second times and Mr. Welling moved that the rules be suspended and the resolution be taken up on Third Reading. Roll call was asked for and the motion was lost by the following vote: Ayes 18, nays 23, absent and not voting 3.
. . The resolution was referred to the Committee on Federal Relations and Memorials to Congress.
An analysis of the voting by party indicates that in the group who voted "aye," twelve were Democrats and six were Republicans. Two Democrats were absent and did not vote. The resolution, therefore, had solid support from the Democratic side and all of the opposition votes were from the Republican ranks.
The next item of business recorded in the House Journal was the transmittal from the Senate of the resolution to ratify the proposed income tax amendment. The resolution was referred to the House Committee on Resolutions.
Analysis of this action, which eliminated any possibility that Utah might be one of the states whose vote would contribute to the ratification of the Sixteenth Amendment, indicates again the party split. Of the sixteen who favored immediate consideration of the resolution to ratify the amendment, thirteen were Democrats and three were Republicans. All opposing votes to consideration came from the Republicans.
The action by the House resulted in a rather lengthy but most interesting and revealing article in the Tribune:
The income tax issue had a lively inning in the house. As a result of the house proceedings, half of the income tax question reposes in the custody of the committee on federal relations and memorials and the other half rests with the committee on resolutions.
Income tax doings began in the house when Welling of Box Elder introduced a ratification resolution. At the proper time he moved the suspension of the rules and the passage of the resolution.
"I urge this action immediately," said Mr. Welling, "in order that Utah might take advantage of the opportunity to show its progressivism. The income tax amendment is a certainty. It requires ratification by only one more state, and several states are hastening to beat one another to the honor. If Utah acts quickly she may get that honor."
Bamberger made a point of order against Welling proceeding. The point being that a motion to suspend the rules is not debatable. Welling asked Bamberger to withdraw the point. "There is no partisan question in this," he said. "All parties are agreed on it. All platforms demand it. There is no politics about it."
Bamberger insisted on his point of order and demanded a reference of the resolution to a committee. The Speaker referred it to the committee on federal relations and memorials, after the motion to suspend had been defeated.
"I am perfectly willing that it should go to that committee if my friend from Garfield [Mr. Henrie] wants it to go there. I want it to go just where he desired it should go," said Mr. Welling.
There was a broad smile at this little dig at the chairman of the judiciary committee, whose requests for committee references have uniformly prevailed over those of Welling.
When the Senate resolution came into the House Welling again moved a suspension of the rules. After much talk, none of which touched the question the rules were suspended and the resolution was on for final disposition.
Welling moved its adoption. Barker of Weber said if there was to be an income tax the state should get the benefit of it. Welling said much the same thing.
"I should like to ask the gentleman from Garfield," said Welling, "Whether or not he was elected on a platform declaring for the amendment?"
"I don't know whether I was or not," said Henrie. "I was elected to come here and use my best judgment, and that is what I propose to do, and I shall vote against this resolution." . . .
There was more wrangling before the motion was put. Welling declaring that the proposed action was intended to kill the resolution. "If it goes to a committee," said he, "it will never again see the light of day."
The motion to send the resolutions to the committee on resolutions prevailed.
Contrary to Mr. Welling's prediction, the resolutions did again see the "light of day" but only long enough to suffer defeat. Mr. Welling's own House Joint Resolution No. 4 was reported out unfavorably by the Committee on Federal Relations and Memorials to Congress, and on February 10 the House adopted the adverse committee report. No roll call vote was taken. Apparently the Democrats intended to force the issue when the Senate resolution came before the House. On February 7, the Committee on Resolutions made an adverse report on Senate Resolution No. 1, and on February 13, the unfavorable committee report was taken up by the House and accepted, thus killing Utah's ratification of the income tax amendment. Evidently, the committee report was included with many other reports and was passed during the press of session-end business, for the Democrats did not even make an issue of it. In fact they voted to defeat ratification, although at the time they did not know it. The Tribune recorded the incident.
The usually alert and watchful Democratic minority membership of the house went to sleep yesterday, and permitted, without protest, the encompassing of the death of the income tax amendment ratification resolution. In fact, the Democrats voted for its death, manifestly not knowing what they were voting on.
The matter came before the house on the adverse reports by the Committee on resolutions on Senator Smith's senate joint resolution No. 1 which put Utah's legislature in line with other states as ratifying the income tax amendment. The adverse report was adopted without a dissenting voice.
Afterwards Democratic members declared they did not realize what they were voting on when they supported the motion to adopt the adverse report. Under a ruling of Speaker Seely made yesterday in another matter a reconsideration may be asked today and if the Democrats take advantage of the opportunity they, at least, may go on record as favoring the income tax.
A resolution for ratification was introduced in the house early in the session. That resolution was killed Monday on adverse report, the idea being that the matter would again come up when Senator Smith's resolution should be reported out. Yesterday Senator Smith's resolution was reported out and killed, thus ending income tax ratification unless later action is taken.
No indication that the ratification resolution ever again came before the House is found in its records. By the time the House defeated the ratification, sufficient states had already ratified to put the amendment into effect; therefore, Utah's action had no effect on the amendment itself but does represent a revealing chapter in her legislative history.
The aftermath of the defeat of the amendment by the Republicans of the House produced some interesting comments in the newspapers of the day. The following are typical.
With respect to the rejection of the income tax amendment by Utah, that was an act of party perfidy that cannot possibly be excused. The State platform of the dominant party explicitly approved that amendment and pledged the party to its ratification; but when the Legislature met there was opposition, and the amendment was unwisely and treacherously rejected. Not one word can be said in favor of that rejection. It was a shameful betrayal of a pledge to the public, a repudiation of an election pledge which must react to the shame of all concerned in it.
Another paper observed:
Pledges made by a political party in its platform are no less binding than the promises of an individual. The latter is honor bound to keep his faith with his fellows, to redeem his pledges . . . and this is true in the same and larger sense of a political party.
No individual is greater than his party; when elected on a party platform the electors understand that the office-holder concurs in that platform and will be guided by it. It is then no longer a matter of conscience or of individual opinion .... As to those whose consciences impel them to follow personal convictions rather than party pledges, one can only regret that those consciences had not asserted themselves before election in order that their possessors might have been square with the people.
And still another paper editorialized:
The present State Legislature will be remembered as the worst pledge-breaking body that ever assembled in the State of Utah.
Senators and Representatives seem to vie with each other in making excuses for disregarding their solemn promises to the public
Shall boys and girls of Utah be brought up to regard pledgebreaking as essential to political preferment and official success?
With such journalistic brickbats, Utah's experience with the ratification of the Sixteenth Amendment to the Constitution of the United States ended.
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