tion is conferred as part of the more general power. Everything to which the legislative power extends may be the subject of taxation, whether it be person or property, or possession, franchise or privilege, or occupation or right. Nothing but express constitutional limitation upon legislative authority can exclude anything to which the authority extends from the grasp of the taxing power, if the legislature in its discretion. shall at any time select it for revenue purposes and not only is the power unlimited in its reach as to subjects, but in its very nature it acknowledges no limits, and may be carried to any extent which the government may find expedient. It may, therefore, be employed again and again upon the same subjects, even to the extent of exhaustion and destruction, and may thus become in its exercise a power to destroy. If the power be threatened with abuse, security must be found in the responsibility of the legislature which imposes the tax to the constituency who are to pay it. The judiciary can afford no redress against oppressive taxation, so long as the legislature, in imposing it, shall keep within the limits of legislative authority and violate no express provision of the constitution. The necessity for imposing it addresses itself to the legislative discretion, and it is or may be an urgent necessity which will admit of no property or other conflicting right in the citizen while it remains unsatisfied." "But," says Judge Cooley, "great as is the power of any sovereignty to levy and collect taxes from its citizens, it is not in a constitutional country without limitations which are of a very distinct and positive nature."22 "It is unfit," says Chief Justice Marshall, "for the judicial department to inquire what degree of taxation 22 Cooley Taxation (2d ed.) 54. 12-BOYD WC is the legitimate use, and what degree may amount to the abuse of the power. "23 § 84. Subjects of taxation.-It is to be borne in mind that though the state is practically unlimited as to the extent of the burden it may impose in the way of taxation, yet this power must be exercised within well defined limitations as to the subjects of taxation. "The power of taxation," says the Supreme Court of the United States, "however vast in its character, and searching in its extent, is necessarily limited to subjects within the jurisdiction of the state. These subjects are persons, property and business. Whatever form taxation may assume, whether as duties, imposts, excises or licenses, it must relate to one of these subjects. It is not possible to conceive of any other, though as applied to them the taxation may be exercised in a great variety of ways. It may touch property in every shape in its natural condition, in its manufactured form, and in its various transmutations. And the amount of the taxation may be determined by the value of the property, or its use, or its capacity, or its productiveness. It may touch business in the almost infinite forms in which it is conducted, in professions, in commerce, in manufactures and in transportation."24 To similar effect Chief Justice Marshall said: "The power of legislation, and consequently of taxation, operates on all persons and property belonging to the body politic. This is an original principle, which has its foundation in society itself. It is granted by all for the benefit of all. It resides in the government as part of itself, and need not be reserved where property of any description, or the right to use it in any manner, is granted to indi23 McCullough v. Maryland, 4 Wheat. (U. S.) 316, 430, 4 L. ed. 415. 24 State Tax on Foreign Held Bonds, 15 Wall. (U. S.) 315. viduals or corporate bodies. However absolute the right of an individual may be, it is still in the nature of that right that it must bear a portion of the public burdens; and that portion must be determined by the legislature. This vital power may be abused; * but the interest, wisdom and justice of the representative body, and its relations with its constituents, furnish the only security where there is no express contract, against unjust and excessive taxation, as well as against unwise. legislation generally."25 § 85. Similarity of attributes of general taxation and eminent domain.-The underlying principle of special taxation, general taxation and eminent domain is the same, namely, that for the tax collected a return shall be given back to the individual whose property is appropriated. "Taxation and eminent domain indeed rest substantially on the same foundation, as each implies the taking of private property for the public use on compensation made; but the compensation is different in the two cases. When taxation takes money for the public use, the taxpayer receives, or is supposed to receive, his just compensation in the protection which government affords to life, liberty and property, in the public conveniences which it provides, and in the increase in the value of possessions which comes from the use to which the government applies the money raised by the tax; and these benefits amply support the individual burden."26 "The theory of the law is, that full compensation is then received in every instance. It is not, it is true, a compensation made in money, but, as in every other case of taxation, the person taxed is to receive a benefit from the expenditure of the moneys collected."27 25 Providence Bank v. Billings, 4 Pet. (U. S.) 514, 561, 7 L. ed. 171. 26 Cooley Const. Lim. (7th ed.), p. 715. 27 Cooley Taxation (2d ed.), p. 625. § 86. Necessity that purpose of tax be a public purpose. "It is the first requisite of lawful taxation," says Judge Cooley, "that the purpose for which it is laid shall be a public purpose. The decision to lay a tax for a given purpose involves a legislative conclusion that the purpose is one for which a tax may be laid; in other words, is a public purpose. But the determination of the legislature on this question is not, like its decision on ordinary questions of public policy, conclusive either on the other departments of the government, or on the people. The question, what is and what is not a public purpose, is one of law; and though unquestionably the legislature has large discretion in selecting the object for which taxes shall be laid, its decision is not final. In any case in which the legislature shall have clearly exceeded its authority in this regard and levied a tax for a purpose not public, it is competent for any one who in person or property is affected by the tax, to appeal to the courts for protection."28 § 87. The public purpose for which taxes may be levied. The regulation of private rights for a public purpose under the police power is as much an appropriation of property as the direct taking of property under the taxing power. Thus one of the powers of exercising the police power is to levy a tax for regulative purposes instead of for revenue. "There are some cases in which levies are made and collected under the general designation of taxes, or under some term employed in revenue laws to indicate a particular class of taxes, where the imposition of the burden may fairly be referred to some other authority than to that branch of the sovereign power of the state under which the public revenues are apportioned and collected. The reason is, that the imposition has not 28 Cooley Taxation (2d ed.), p. 55. for its object the raising of revenue, but looks rather to the regulation of relative rights, privileges and duties as between individuals, to the conservation of order in the political society, to the encouragement of industry, and the discouragement of pernicious employments. Legislation for these purposes it would seem proper to look upon as being made in the exercise of that authority which is inherent in every sovereignty, to make all such rules and regulations as are needful to secure and preserve the public order, and to protect each individual in the enjoyment of his own rights and privileges by requiring the observance of rules of order, fairness and good neighborhood, by all around him. This manifestation of the sovereign authority is usually spoken of as the police power."29 Industrial insurance would seem in part to come within the scope of regulative legislation above referred to, since the fund necessary to be raised to protect the employed class must necessarily be created through the exercise of some form of the taxing power, and, moreover, the primary object of such regulative legislation is to readjust relations between certain classes of society to the development of the public welfare. Therefore in determining whether such legislation be constitutional or not, one is confronted with the limitations placed by the Fifth Amendment upon the exercise of the police power by the state in the form of the taxing power. What then is a public purpose, from the standpoint of such regulative legislation? "In the first place, taxation having for its only legitimate object the raising of money for public purposes and the proper needs of government, the exaction of moneys from the citizens for other purposes is not a 29 Cooley Taxation (3d ed.), 1125. |