But it is probable that the disposition to tax everything susceptible of
taxation does not spring so much from the notion that more may thus be obtained,
as from the notion that as a matter of justice everything should be taxed.
That all species of property shall be equally taxed, is enjoined by many
of our State constitutions, and that it should be so, at least so far as
direct taxation is concerned, is regarded by most of our people as a self-evident
truth — the idea being that every one should contribute to public expenses
in proportion to his means, or, as it is sometimes phrased, that all property,
being equally protected by the State, should equally contribute to the expenses
of the State.
But under no system that any of our legislatures have yet been able to devise
is all property equally taxed; nor can it be equally taxed. And if it were
possible to even approximate to the equal taxation of all property, this
would not be to secure that equality which justice demands. For, as is evident
in the case of mortgages, etc., to equally tax all property would infallibly
be to levy a higher rate of taxation upon some than upon others; and even
if the same proportion could be taken from the means of every member of the
community, that would no more conform to the dictates of equality than would
the levy upon each of an equal sum; for, as the demand for a sum which would
not be felt by the rich man would fall with crushing weight on the poor man,
so to take the same proportion of their means would be a very different thing
to him who has barely enough, and to him who has a large surplus.
Quite as fallacious is the idea that all property should be equally taxed,
because equally protected. The fact is that all property is not equally protected,
cannot be equally protected, and ought not to be equally protected, if by
protection anything more is meant than the mere preservation of the peace.
The protection of property is not the end, it is only one of the incidents,
of government. As John Stuart Mill says: "The ends of government are
as comprehensive as those of the social union. They consist of all the good
and all the immunity from evil which the existence of government can be made,
either directly or indirectly, to bestow." And to say that government
should impartially protect and equally tax all property, is like saying that
the farmer should bestow the same care upon everything he may find growing
in his fields, whether weeds or grain.
That there is no obligation to equally tax all property is fully realized
in regard to property brought from abroad. No one contends for a tariff which
should equally tax all such property. The protectionists assert that the
leading idea in determining what should be taxed and what not taxed, and
the different rates which various imports should bear, ought to be the promotion
of the general good by the encouragement and protection of industry. Their
opponents, on the other hand, do not deny the propriety of such exemptions
and discriminations. They merely deny that industry can be protected and
encouraged by the endeavor to shield certain classes of producers from foreign
competition; and, in the enactment of a purely revenue tariff, they would
make the same kind of exemptions and discriminations, with a view to the
collection of the revenue with the smallest cost and least interference with
trade. Both parties equally recognize the general good as the true guiding
principle in taxation of this kind.
Even in internal taxation the same principle is largely recognized. On certain
businesses and certain manufactures we impose taxes not imposed upon others,
on the ground that it is for the public good that such businesses and manufactures
should be restricted. With similar regard to the public good, we exempt certain
species of property from taxation, as cotton factories in Georgia, growing
crops in California, property devoted to religious and charitable uses in
New York, the bonds of the United States, by Federal law, etc.
Evidently this regard for the general good is the true principle of taxation.
The more it is examined the more clearly it will be seen that there is no
valid reason why we should, in any case, attempt to tax all property. That
equality should be the rule and aim of taxation is true, and this for the
reason given in the Declaration of Independence, that all men are created
equal. But equality does not require that all men should be taxed alike,
or that all things should be taxed alike. It merely requires that whatever
taxes are imposed shall be equally imposed upon the persons or things in
like conditions or situations; it merely requires that no citizen shall be
given an advantage, or put at a disadvantage, as compared with other citizens.
The true purposes of government are well stated in the preamble to the Constitution
of the United States, as they are in the Declaration of Independence. To
insure the general peace, to promote the general welfare, to secure to each
individual the inalienable rights to life, liberty, and the pursuit of happiness — these
are the proper ends of government, and are therefore the ends which in every
scheme of taxation should be kept in mind. ... read the whole article