On this day in history, August 24, 1894, the US Congress passed the first graduated income tax law, 2% on all income over $4,000, which lasted a year before it was declared unconstitutional by the Supreme Court and overturned.
The tax, which was imposed under the Wilson-Gorman Tariff Act, slightly reduced U.S. tariff rates from those set in the 1890 McKinley tariff and imposed a 2% tax on income over $4,000. Named after William L. Wilson and Senator Arthur P. Gorman, both Democrats, it marked the first peacetime income tax, affecting fewer than 1% of households. The income tax was introduced to compensate for revenue lost due to tariff reductions, aligning with the Democratic Party's push away from protectionism. The bill initially lowered tariff rates significantly, but protectionists in the Senate added over 600 amendments, nullifying most reforms. The "Sugar Trust" made changes favoring itself, leading to President Grover Cleveland's denunciation of the revised measure as a disgrace, though he allowed it to become law without his signature. The act was seen as an improvement over the McKinley tariff, despite its controversy. The income tax provision was considered odious by some, but was supported as the lesser of two evils compared to a tariff tax.
On April 8, 1895, the Supreme Court ruled that the taxes levied by the Wilson-Gorman Act on income from property were unconstitutional, treating them as direct taxes. Chief Justice Melville Fuller stated that taxes on real estate and the income of real estate, as well as personal property, were direct taxes. The Constitution required that direct taxes be imposed in proportion to the states' population, and the tax in question had not been apportioned, rendering it invalid. The Court did not rule that all income taxes were direct taxes but held that taxes on interest, dividends, and rents had a profound effect on the underlying assets, viewing them as direct taxes. Direct taxes were required to follow the rule of apportionment, dividing the tax collected by the number of members in the House of Representatives and multiplying by each state's representatives to determine each state's share. A separate holding regarding federal taxation of interest on state bonds was later declared "effectively overruled."
The dissenting Justices, John Marshall Harlan, Howell Edmunds Jackson, Edward Douglass White, and Henry Billings Brown, strongly disagreed with the majority. Justice White deplored the decision, arguing that it deprived the government of a necessary power of taxation. Justice Brown's dissent emphasized that the decision surrendered the taxing power to the moneyed class, nullifying not only this law but every similar law not based on an "impossible theory of apportionment."
Dollar Tree Inc., one of the largest U.S. retailers, has reached a settlement with the federal government to enhance working and safety conditions at its stores across the country. The agreement requires Dollar Tree to pay $1.35 million to the Occupational Safety and Health Administration (OSHA) and implement numerous changes in business practices. Violations included blocked aisles, hazardous work areas, unsafe stacking of boxes, and blocked fire safety equipment. OSHA will close most of its open cases against Dollar Tree, allowing the company to correct some safety issues before inspections.
Since 2018, Dollar Tree has been fined $13.1 million for violations found during 360 inspections, with fines escalating due to repeat violations. The settlement aims to address the "root causes" of common violations, with measures including increased safety staff, monitoring compliance, engineering controls, and improved business practices. Dollar Tree will also open a 24-hour hotline for safety concerns and form a committee with workers to address safety issues. The agreement runs until August 2025 and does not call for increased staffing. If OSHA receives a complaint and believes Dollar Tree isn't addressing the issue, the retailer could face a fine of up to $100,000 a day for five days. The settlement follows a similar agreement in 2015 that expired in 2018, which did not lead to systematic changes, and comes as Dollar General Corp., a competitor, also faces OSHA fines.
Former U.S. President Donald Trump is set to surrender at an Atlanta jail after being indicted in Georgia over his efforts to overturn his 2020 election loss. The conditions of his $200,000 bond package include standard provisions that bar him from making direct or indirect threats against witnesses or his 18 co-defendants in the case. This also applies to social media posts, including on Trump's platform, Truth Social. Trump is also prohibited from discussing the case with co-defendants or potential witnesses unless lawyers are present.
Legal experts believe that judges in Georgia are unlikely to revoke bail over social media posts or inflammatory statements, even as Trump is seeking the Republican nomination for the 2024 U.S. election. Judge Scott McAfee does have the power to jail Trump for egregious acts of witness tampering. Trump has been indicted in three additional cases and has pleaded not guilty in all. His social media postings have been contentious in the Washington case, leading to a protective order barring him from disclosing sensitive evidence and grand jury information. Unlike in Georgia, his bond in other cases do not explicitly restrict his social media posts.
Fulton County Superior Court Judge Scott McAfee has ruled that cameras will be allowed in the courtroom for former President Trump's Georgia arraignment, marking the first time one of Trump's criminal proceedings will be televised. The judge granted a request from four local television stations to bring in live cameras and other recording devices through September 8. The Fulton County District Attorney, Fani Willis, is planning to hold the arraignments for all the defendants, including Trump, within that window. The order does not specify whether cameras will be allowed during a trial or any other future proceedings. Trump and 18 co-defendants were charged last week over alleged efforts to overturn the 2020 election results. Cameras have been barred from all of Trump's other three criminal cases so far.
In response to the U.S. Supreme Court's decision banning race-conscious admissions at colleges and universities, law schools are modifying their admission essays. The ruling prohibits schools from considering candidates' race in admissions, leading to changes in essay questions to understand candidates' backgrounds without violating the ruling. Law school admission consultant Mike Spivey noted that the process will be less uniform and more time-intensive for applicants. Several schools, including Duke Law School and the University of Texas School of Law, have replaced open-ended diversity statements with specific prompts. Harvard Law School now requires both a "statement of purpose" and a "statement of perspective." Yale Law School offers a choice of four essay prompts, focusing on meaningful communities or changes in perspective. The University of Michigan Law School has updated its supplemental essay prompts to include nine options, aiming to understand the candidates' experiences and perspectives. The changes reflect a broadening interest in contextual information, seen as beneficial for making admissions decisions.
A former associate at the law firm Kirkland & Ellis, Zoya Kovalenko, has defeated the firm's attempt to dismiss her sex discrimination claims. U.S. District Judge Haywood Gilliam of Oakland, California, maintained most of Kovalenko's bias, retaliation, and defamation case against the firm, although he dismissed most of her claims against individual partners. Kovalenko alleged that she was treated unfairly compared to male associates and was fired in retaliation for her complaints. She also claimed that the firm and its partners overloaded her with work, cutting into her vacation time, while ensuring a male associate had a work-free vacation. Gilliam found that the individual partners could not be held liable under state and federal law, but some will have to face Kovalenko's defamation claims. One partner was dismissed from the lawsuit entirely due to jurisdictional reasons.