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Keywords

lawsuitdefendantappealtax lawcorporation
tax lawcorporationappellantlevy

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Bachrach v. Nelson, 349 Ill. 579, 182 N.E. 909

Facts

Walter Bachrach, a taxpayer in Illinois, filed a lawsuit to test the constitutionality of the Income Tax Law, which was enacted in 1932. The law imposed a graduated income tax on residents and nonresidents based on their net income. Bachrach's suit was consolidated with another suit by David H. McMaster, who also challenged the law. The circuit court found that the law was unconstitutional, leading to an appeal by the defendants.

Walter Bachrach, as a resident, citizen, and taxpayer of Illinois, for himself and all other taxpayers similarly situated, for the purpose of testing the constitutionality of the Income Tax Law and to enjoin the appellants from incurring any expenses or making any disbursements from the state treasury under the second act above mentioned.

Issue

Is the Income Tax Law of 1932 unconstitutional under the Illinois Constitution?

Is the Income Tax Law of 1932 unconstitutional under the Illinois Constitution?

Rule

The Illinois Constitution mandates that taxes must be levied on property by valuation, ensuring that every person and corporation pays a tax in proportion to the value of their property.

The general assembly shall provide such revenue as may be needful by levying a tax, by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her or its property.

Analysis

The court analyzed the provisions of the Illinois Constitution, particularly sections 1 and 2 of article 9, which limit the General Assembly's power to impose taxes on property based on valuation. The court concluded that the Income Tax Law, which taxes income rather than property, violates these constitutional provisions.

The court analyzed the provisions of the Illinois Constitution, particularly sections 1 and 2 of article 9, which limit the General Assembly's power to impose taxes on property based on valuation.

Conclusion

The court affirmed the lower court's ruling that the Income Tax Law was unconstitutional, thereby preventing the state from enforcing the law.

The court affirmed the lower court's ruling that the Income Tax Law was unconstitutional, thereby preventing the state from enforcing the law.

Who won?

Walter Bachrach and David H. McMaster prevailed in the case because the court found the Income Tax Law unconstitutional, violating the Illinois Constitution's provisions on taxation.

Walter Bachrach and David H. McMaster prevailed in the case because the court found the Income Tax Law unconstitutional.

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