peculiar manner in order to include the shares of non-residents, though much simpler means were available. Property and Excise. Under this title are included those taxes on corporations and companies taxed like corporations, in which some of the property connected with their business may be used as a varying standard of assessment, as, for example, the policies of an insurance company, yet such property is not taxed as a distinct kind of property, but is used as a standard only; or in which the criterion is some purely physical quality, as the mileage of telegraph wire, or the number of tons of ore mined; or in which some other arbitrary measure is used, as the number of telegraph messages; or the tax may be fixed at a lump sum, etc. These taxes are usually called franchise taxes, a term applied also to taxes on capital stock and various forms of income taxes. It is not a tax on the franchise in an economic sense, any more than they are. That term cannot be used, therefore, either to describe these taxes or to distinguish them from others. The best term seems to be "excise" taxes; this, perhaps, conveys the idea of an arbitrary assessment according to empirical standards. These taxes may be levied in addition to a regular property tax, or they may be in lieu of all other taxes. In the latter case no question of double taxation arises, though, of course, equality may be violated, either by an inadequate or an extortionate tax. In the former case it may be assumed, primâ facie, that there is double taxation. But inequality may not really exist, for these taxes, like taxes on premiums and gross receipts, are often levied in order to reach ability or income which is not affected to a great extent by property taxes. The same kinds of companies, it will be observed, are liable to these taxes as to the gross receipts and premium taxes. It may be pointed out that specific amounts which are sometimes thus assessed have the advantage that they escape more surely the danger of being declared taxes on inter-state commerce. In Minnesota there is an "alternative" tax on the number of tons of ore mined: copper, 50 cents a ton; iron, I cent; coal, I cent, etc. These were formerly more common than to-day. Telegraph companies are commonly taxed according to their wire mileage, as in Alabama, Connecticut, Tennessee and Wisconsin. In Alabama this is in addition to a lump sum; in Tennessee companies are graded according to their total mileage in four classes, the taxes ranging from $25 to $4,000. In Wisconsin, the tax on the wire mileage is in four classes: first, second, third, and additional wires being taxed respectively, I dollar, 50 cents, 25 cents, and 20 cents each. A similar tax is found in Vermont. In Texas the tax is on the number of messages, one cent for each full message, etc. Telephone companies are often similarly taxed; sometimes the number of instruments or transmitters is the basis, as in Georgia, Tennessee, Texas and Virginia. Express companies and car compa nies are generally taxed either by a lump sum or by mileage; in Alabama both are used; in Tennessee the tax is a lump sum in several classes, according to the mileage. Insurance companies are generally taxed on receipts, as has been already shown, but sometimes by a lump sum, as in Tennessee; in some cases both kinds of taxes are used, as in Virginia. Another method of taxing insurance companies is upon their policies. Generally there is a certain relation between the value of a company's policies and its taxable ability, but the policies cannot be considered as property. This method of assessment is arbitrary in the same sense as the taxation of telegraph companies according to mileage. Thus, in Massachusetts, life insurance companies are taxed one-fourth percent. on their policies. More in the nature of a property tax, yet distinct from it in the methods of valuation and the rate of taxation, are the taxes on certain assets of insurance companies in Connecticut. The taxation of the deposits of a savings bank at a fixed percentage rate is a property tax in all but its methods of rating; such taxes are found in Massachusetts and Connecticut. Generally taxes of this kind are levied in addition to the taxes on property. This is the case, for example, in Alabama, Tennessee, Texas and Virginia. In Massachusetts taxes on capital stock are also levied. In Connecticut the taxes assessed on insurance companies, telephone and telegraph companies and savings banks, are in lieu of all other taxes on the property effected thereby. Similarly, in Wisconsin the tax on telegraph companies is instead of all property tax except that on realty. Such taxes are generally declared to be on the franchise or the privilege of doing business. In the legal view they have been distinguished from property taxes. The leading cases on this subject have arisen in regard to the taxation of savings bank deposits in Massachusetts and Connecticut. These decisions held that a specific percentage tax on deposits was not a tax on property. More recently the Supreme Court of Connecticut has declared that those doctrines had been pushed to an extreme, and virtually refused to follow them." Property and Privilege. Corresponding to the taxes on particular occupations through their income are taxes which like them are often termed privilege taxes, but which are assessed by arbitrary methods. They have generally one of two purposes, to operate as a license, or to reach those classes which have income in excess, proportionably to their property. Indicia of the most various kinds are used to determine the amount of the tax, such as the number of rooms in a hotel, the kind and number of animals drawing a vehicle, the seating capacity of a theatre, the number of attachés in a circus, the rental value of a hotel, the number of years of practice of a lawyer, and these may be further rated by the population of the town in which the person resides. In so far as they tax the income of occupations, it may generally be said that not 1 Coite vs. Soc. for Savings (1864), 32 Ct., 186, aff'd in Soc. for Savings vs. Coite (1867), 6 Wall., 594; Commw. vs. Prov. Sav. Inst. (1866), 94 Mass., 312, aff'd in Prov. Inst. Sav. vs. Mass. (1867), 6 Wall., 611. 2 Nichols vs. N. H. & N. Co. (1875), 42 Ct., 105. only double taxation is not produced, but that a more equitable assessment is made on the taxable capacity of the state. But in so far as they tax the incomes of certain occupations, and allow others needlessly to go free, such taxes cause an inequality as between occupations, and give rise to double taxation. Here, however, the incidence of taxation appears to be more uncertain than usual, and these taxes, as is commonly assumed of licenses, may be largely diffused. Like those privilege taxes which have the general character of income taxes, they are found chiefly in the southern states. CHAPTER VI. JURISDICTION: PROPERTY AND INCOME. I. WITHIN THE STATE. Realty. Land in probably every civilized community is subject to taxation, whether owned by residents or non-resients. It would be both impracticable and absurd in the highest degree to demand that a state should be deprived of this source of revenue because the owners were non-residents. "Land is governed by the law of the place where it is situated." Lands, or immovables, however, are not limited strictly to physical lands, they may include "all other things, though movable in their nature, which by the local law are deemed immovables." Illustrations of this are familiar; among other examples, Story cites mortgages. A striking case is found under the institution of slavery; "In some states the slaves were regarded as real estate (1 Hurd, Slavery, 239).” It may be stated as a rule, therefore, that "No one can be taxed in respect to his ownership of land unless the land itself is within the jurisdiction of the taxing authority; his personal liability depending on the right to reach and tax the land." Such is also the law in the United States and the several states. Tangible Personalty. From an economic point of view 1 Wharton, Conflict of Laws, & 273; Westlake, Priv. Int. Law, p. 177. * Story, Conflict of Laws, ch. xiv, 551; cf. Westlake, Priv. Int. Law, & 147. Ibid., ch. x, 447. Springer vs. United States (1880), 12 Otto, 586. Cooley, Taxation, p. 393; cf. p. 56; Hilliard, Taxation, ch. iv, 2 65. |