Constitutional law — Taxation — Uniformity — Ordinance taxing profits of businesses and professions for current year — Tax on salaries and wages for following year.
1. An ordinance of a city imposing a tax for general revenue purposes on salaries and wages earned during the next year by residents of the city, and on salaries and wages earned in the city during the next year by non-residents and on the net profits of businesses or other activities of residents earned during the current year, and on the net proceeds, earned during the current year, of businesses and other activities conducted in the city by non-residents, was held not invalid on the ground that it violated constitutional provisions, requiring uniformity of taxation, by providing that the net proceeds of businesses and professional activities for the current year be taxed but that employees pay a tax on their salaries and wages earned for the next year. [379-82]
2. Classification for tax purposes is proper where it is made according to reasonable, just and practical rules, drawn from experience, and where it rests upon some difference which bears a reasonable and just relation to the act in respect to which the classification is proposed. [381]
3. Where the classification is sound, the tax imposed is uniform if it falls equally upon all members within such class. [381]
Constitutional law — Due process — Tax on salaries and wages — Deduction at source — Residents and non-residents — Provisions for hearing and judicial review.
4. Such ordinance was not invalid because of the fact that employees, working in the city, would have the tax on their salaries and wages deducted currently at the source, in accordance with the provisions of the ordinance, while employees, working out of the city but residing therein, would necessarily escape such deduction. [381]
5. Such ordinance was not invalid on the ground that it contained no provision for hearing, appeal or judicial review, where it required the receiver of taxes to bring suit for recovery of any amount claimed by him, and the receiver did not have authority to enter a judgment or a lien or to make a distraint, or, in any other way immediately to collect against the will of the taxpayer the amount of any tax assessed by him. Furthermore, it was not invalid as not affording opportunity for judicial review and as violating due process by reason of the provisions of Sections 12, 14 and 15 of the Act of June 27, 1939, P. L. 1199, which provide fully for judicial review. [382-3, 388]
Wages — Attachment — Exemption — Tax on salaries and wages — Deduction at source — Act of April 15, 1845, P. L. 459.
6. Such ordinance was not invalid on the ground that deduction at the source was equivalent to an attachment of wages prohibited by the Act of April 15, 1845, P. L. 459, section 5. [384-5]
7. The Act of 1845 sets up a system of attachment for debts and applies to debts only and not to taxes. [384]
Constitutional law — Privilege against self-incrimination — Tax statute — Requirement of production of books for examination.
8. Such ordinance was not invalid on the ground that it required the production of books for examination without granting immunity to the taxpayer who produced them. [385]
Constitutional law — Public officers — Compensation — Diminution during term of office — Tax on salaries.
9. Such tax was not invalid, in violation of Article III, section 13 of the Constitution, on the ground that it constituted a diminution of the compensation payable to public officers to whom the tax might be applicable. [385]
Constitutional law — Impairment of obligation of contracts — Tax on salaries and wages — Deduction by employer.
10. The provision in such ordinance requiring employers to deduct the tax from salaries and wages at the time of payment thereof did not constitute an impairment of the obligation of contracts. [386]
Constitutional law — Taxation — Double taxation — Tax on salaries and wages — Deduction by employer — Liability of employee.
11. A provision in the ordinance that liability of the employee should remain where the employer had failed to make a return and to pay the tax, applied only to cases where the employer had neglected to make the deduction and, for such reason, had failed to make a return and pay the tax, or where the employer was not subject to the jurisdiction of the city, and for such reason, had failed to make a return and payment; and, therefore, the ordinance was not invalid on the ground that it imposed a duty on the employer to deduct the tax from salaries and wages but did not relieve the employee from liability where the employer failed to pay the tax to the city. [386]
Judgments — Res judicata — Validity of tax ordinance — Constitutional questions involved.
12. Where the validity of an act or ordinance is attacked and a decision rendered sustaining it, it may be assumed that all constitutional questions involved have been decided, whether or not they were raised in the pleadings or were mentioned in the opinion. [379]
Statutes — Construction — Scope of judicial review — Wisdom or expedience of ordinance.
13. In passing upon the constitutionality of an ordinance, the court does not have power to review the wisdom or expedience of the ordinance, or to consider the propriety or justness of the tax it imposes; its duty is to consider only the constitutionality and validity of the ordinance. [387]
Argued February 1, 1940.
PER CURIAM, February 5, 1940:
The decree of the court below dismissing plaintiff's bill is affirmed on the opinion of President Judge OLIVER. Costs to be paid by the City of Philadelphia.
ORDER ON PETITION TO WITHHOLD RETURN OF RECORD AND SUPPLEMENTAL OPINION, PER CURIAM, February 10, 1940:
We have considered the petition to withhold the return of the record for an additional period of thirty days and are of opinion that the public interest requires that the petition be and it hereby is dismissed.
When this case was argued, our attention was not called by counsel to Sections 12, 14 and 15 of the recent Act of June 27, 1939, P. L. 1199, which cover, inter alia, the subject of taxation here involved and in themselves provide adequate methods whereby the taxpayer may have any assessment made against him reviewed by the Board of Revision of Taxes of Philadelphia County and may appeal from that Board to the Court of Common Pleas and from there to the appellate courts. This statute confirms our conclusion that due process of law is afforded to plaintiff and to all taxpayers.