Hylton v. United States 3 Dallas 171 (1796)

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HYLTON v. UNITED STATES 3 Dallas 171 (1796)

The first case in which the Supreme Court passed on the constitutionality of an act of Congress, Hylton stands for the principle that the only direct taxes are taxes on land and capitation taxes. The Constitution provides that no capitation "or other direct tax" be imposed except in proportion to the population of the states, but that "all duties, imposts and excises " be levied uniformly, that is, at the same rate. Congress imposed a uniform tax of $16 on all carriages (horse-drawn coaches), despite protests that the tax should have been apportioned among the states according to the census. When Congress levied a direct tax it fixed the total amount of money it intended to raise, so that in a state with ten percent of the nation's population, the parties taxed (carriage-owners) would have paid ten percent of the total. Thus, if a tax on carriages were a direct tax, the amount raised in two states of equal population would be the same, but if one state had twice as many carriages as the other, the tax rate in that state would be twice as great. The contention in this case was that the carriage tax was unconstitutional because it was a direct tax uniformly levied.

The case seems to have been contrived to obtain a Court ruling on the constitutionality of Congress's tax program. To meet the requirement that federal jurisdiction attached only if the amount in litigation came to $2,000, Hylton deposed that he owned 125 carriages for his private use, each of which was subject to a $16 tax; if he lost the case, however, his debt would be discharged by paying just $16. The United States paid his counsel, alexander hamilton, who defended the tax program he had sponsored as secretary of the treasury. Notwithstanding the farcical aspects of the case, its significance cannot be overestimated: if a tax on carriages were indirect and therefore could be uniform, Congress would have the utmost flexibility in determining its tax policies. As Justice samuel chase said, "The great object of the Constitution was to give Congress a power to lay taxes adequate to the exigencies of government." Justice william paterson, having been a member of the constitutional convention of 1787, explained why the rule of apportionment applied only to capitation and land taxes, making all other taxes indirect taxes. The judgment of the Court was unanimous.

Leonard W. Levy