concurring.
I agree that the judgment must be reversed; but on a different ground. It was stipulated before the state board which upheld the tax that it was levied upon “ that portion of the mentioned dividends which were directly declared from interest accruing from United States Bonds issued under and by virtue of the Acts of Congress passed April 24th, 1917 and September 24th, 1917.” A similar stipulation was entered into in the court below. Thus, the dividends were earmarked as the direct proceeds of the interest on the war bonds. The later Act provided, in terms, the former in substance, that the bonds “ shall be exempt both as to principal and interest from all taxation now or hereafter imposed by . . . any state . . . upon the income or profits of individuals, partnerships, associations or corporations.” The provision creating the exemption was clearly within the power of Congress “ to borrow money on the credit of the United States,” Art. I, § 8, Par. 2, and was also within its war powers. As a matter of statutory construction, a dividend paid directly from the interest seems to me within the exemption expressly conferred. The tax levied was, therefore, void because it violated that exemption.
I do not think it" can properly be said that the state statute discriminates against Government bonds. The statute makes no reference to them or to any particular class of securities. The tax imposed upon the stockholder results, not from discrimination practiced by. a State against the Federal Government, but from the fact that the corporation happened to earn its dividend from securities on which, under the Wisconsin law, it was not required *717to pay a tax. Compare State ex rel. Columbia Construction Co. v. Tax Commission, 166 Wis. 369. The operation. and effect of the statute would be precisely the same if the dividend had been paid out of any other corporate income exempt from the state tax; from interest upon other tax exempt bonds, if any; or out of income from the part of a business carried on in another State, United States Glue Co. v. Oak Creek, 247 U. S. 321; State ex rel. Arpin v. Eberhardt, 158 Wis. 20; Van Dyke v. Milwaukee, 159 Wis. 460, 466, or out of rentals or mipe royalties received from land without the State, or out of profits received from the sale of property having a situs out of the State, Wisconsin Statutes, 71.02(3) (see State ex rel. Mariner v. Hampel, 172 Wis. 67); or out of dividends received from banks, Wisconsin Statutes, 71.05(1) (e).
The purpose of the Legislature was solely to prevent double taxation by the State of Wisconsin, of the income received by individuals in the form of dividends. The deduction allowed is limited to that necessary to prevent double taxation. Under the Wisconsin law as originally enacted in 1911 the individual was allowed to deduct from the aggregate income on which the tax was payable all “dividends or incomes received . . . from stocks or interest in any corporation . . . , the income of which shall have been assessed under the provisions of this act.” The proviso here in question, namely: “that where only part of the income of any corporation . . . shall have been assessed under, the act only a corresponding part of the dividepd or income received therefrom shall be deducted,” was added in* 1913, four years before the United States entered the World War.’ At that time there were substantially no Government bonds outstanding except those used by national banks as the basis for note issues. And in view of the exemptions enumerated above, it can. not well be said, even after the war, that the tax upon dividends paid out of interest on United *718States bonds furnishes the most conspicuous instance of the operation of the section in question.
Moreover, under the Wisconsin law, the source out of which the dividend was declared is immaterial. The thing received as income is taxable to him who receives it although the fund or property out of which it was paid was exempt from taxation in the hands of the payor. “ It is the relation that exists between the person sought to be taxed and the property claimed as income to him that determines whether there shall be a tax.” State ex rel. Sallie F. Moon Co. v. Wisconsin Tax Commission, 166 Wis. 287, 290. Compare Paine v. City of Oshkosh, 190 Wis. 69.
Mr. Justice Stone concurs in this opinion.