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.
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