States, of course, have the power to tax nonresidents on income derived from sources within their borders (Travis v Yale Towne Mfg. Co., 252 U.S. 60, 75; Shaffer v Carter, 252 U.S. 37, 52). Similarly, progressive tax systems, which apportion the tax burden based on the taxpayer's ability to pay, are unquestionably constitutional (Brushaber v Union Pac. R.R., 240 U.S. 1, 25), and indeed are "widespread among the United States and firmly imbedded in the federal tax structure" (Wheeler v State, 127 Vt. 361, 365, 249 A.2d 887, 890, appeal dismissed for want of a substantial Federal question 396 U.S. 4). Dismissal for want of a substantial constitutional question operates as a decision on the merits (see, Washington v Yakima Indian Nation, 439 U.S. 463, 476, n 20).
They allege this is demonstrated on Form 103-A when the commissioner of taxes uses a special adjustment figure of 54% rather than the 100% special adjustment figure used by the appellants in their computation of Form 103-A. The appellants further contend the failure to impose this limitation upon high tax bracket residents of New Hampshire in the same manner as those high tax bracket residents of Vermont has the effect of destroying the formula set forth in Wheeler v. State, 127 Vt. 361, 364, 249 A.2d 887 (1969), appeal dismissed, 396 U.S. 4 (1969), rehearing denied, 396 U.S. 949 (1969), which provides the non-resident taxpayer is to pay to the State of Vermont a tax which bears that same proportion to the Vermont income tax on his entire income, as his Vermont taxable income bears to his entire taxable income. The resolution of this argument requires us to look to the purpose of the ceiling contained within 32 V.S.A. § 5828 which is to place a limit upon the amount of income tax an individual may be held liable for in a given year.
That contention has been squarely addressed and clearly rejected. See Maxwell v. Bugbee, 250 U.S. 525, 538-43, 40 S.Ct. 2, 5-7, 63 L.Ed. 1124 (1919); see also Wheeler v. State, 127 Vt. 361, 249 A.2d 887, 890-91, appeal dismissed for want of a substantial federal question, 396 U.S. 4, 90 S.Ct. 24, 24 L.Ed.2d 4 (1969) (per curiam). We reject it as well.
See Thorpe v. Mahin, 43 Ill.2d 36, 49, 250 N.E.2d 633, 640 (1969), and cases cited therein. See also Wheeler v. State, 127 Vt. 361, 249 A.2d 887 (1969). In structuring the Vermont gift tax law, the Legislature has "borrowed" not only the federal determination of taxable gifts but also the federal rate schedule.
Per Curiam. An amendment to the Vermont income tax laws prompted a retesting of the issue settled in Wheeler v. State, 127 Vt. 361, 249 A.2d 887. That case validated the application of progressive tax rates, based on the total taxable earnings, to income earned in Vermont by a non-resident taxpayer. The present case, raising the identical question under the new law, has followed the prescribed route from the initial appeal to the tax commissioner through the county court to this tribunal.
Brief for Appellant at 14-15. See also Wheeler v. State, 127 Vt. 361, 249 A.2d 887 (1969), appeal dismissed, 396 U.S. 4, 90 S.Ct. 24, 24 L.Ed.2d 4 (1969). The reasoning of these cases is that property not itself taxable can be used as a measure of the tax imposed on property within the state and that to do so is "in no just sense a tax on the foreign property."
of debate and controversy of which one may assume Congress was aware. If Congress was aware of similar tax methods but failed to prohibit them in the Act, this court should not imply such a prohibition merely on the basis of a policy of protecting military personnel from state taxation. A second reason for rejecting plaintiff's legislative history arguments is that plaintiff's position asks this court to construe the statute with an eye to deciding how Congress would have confronted this issue in 1942, rather than how Congress did confront this issue at that time. If Congress in 1942 did not anticipate the operation of the Kansas tax laws or decided that the courts had proscribed the operation of the Kansas tax laws as unconstitutional, then there is no reason to construe the Soldiers' and Sailors' Civil Relief Act as if it addressed these practices. If a "loophole" in the law has developed because states and courts no longer consider these practices unconstitutional and unfair (see Wheeler v. State of Vermont, 127 Vt. 361, 249 A.2d 887 (1969)), the loophole should be closed by legislative action — not by a strained judicial construction of the law. This leads to the third reason for rejecting plaintiff's legislative history arguments. For some years now, Congress has undoubtedly been aware of the tax practices in question.
Beebe v. Rupert, 114 Vt. 172, 41 A.2d 149 (1945). See also, Wheeler v. State, 127 Vt. 361, 249 A.2d 887 (1969) appeal dismissed 396 U.S. 4, 90 S.Ct. 24, 24 L.Ed.2d 4, reh. denied (1969). Consequently, the court concludes a plain and certain remedy exists in the Vermont state courts within the meaning of 28 U.S.C. § 1341.
See Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483, 489 (1955). Moreover, granting tax relief based on the income of taxpayers is not irrational. See Wheeler v. State, 127 Vt. 361, 365-66, 249 A.2d 887, 890 (1969) (upholding constitutionality of Vermont's progressive income tax); Miller v. Heffernan, 378 A.2d 572, 576 (Conn. 1977) (taxing dividends of only those with adjusted gross incomes of $20,000 or more does not deny equal protection to higher income taxpayers); see also Schweiker v. Hogan, 457 U.S. 569, 590-91 (1982) (upholding constitutionality of federal legislation that granted benefits on basis of income).
Further, if indeed § 5825 is ambiguous as to the point of law raised in this appeal, the Court fails to recognize that § 5916 was enacted merely to clarify the question left in doubt by the previous statute. Because I believe that taxpayers are not entitled to a credit under the statute's plain meaning, and that taxpayers' constitutional challenges to the statute on equal protection, proportional contribution, and common benefits grounds are wholly without merit, see Oxx v. Department of Taxes, 159 Vt. 371, 376, 618 A.2d 1321, 1324 (1992) (statute is constitutional if it is reasonably related to legitimate public purpose); Fleury v. Kessel/Duff Constr. Co., 149 Vt. 360, 362, 543 A.2d 703, 704 (1988) (one who seeks to void statute undertakes very weighty burden); Wheeler v. State, 127 Vt. 361, 366, 249 A.2d 887, 891 (1969) (party challenging constitutionality of statute has burden to demonstrate discrimination to extent that it is arbitrary and unreasonable), I dissent. ____________________________________________ Superior Judge, Specially Assigned