| PRINCIPLES OF TAXATION. |
By DAVID A. WELLS, LL. D., D. C. L.,
CORRESPONDANT DE L'INSTITUT DE FRANCE, ETC.
XIV.—DOUBLE TAXATION.
ONE of the inevitable characteristics of a "general property tax" is the opportunity afforded for inflicting double taxation—i. e., taxation at one and the same time on the same person or property, or taxation of the same property a second time in the same year—an opportunity which the believers in this system vigorously defend, and its administrators as a rule gladly take advantage of to practically enforce. These opportunities exist mainly through two assumptions, neither of which are warranted by either reason or justice, and are alike antagonistic to any equitable and intelligent system of taxation: the first, in respect to the situs of personal property, and the second, as to origin and nature of property; and to these, in the above order, attention is next invited.
Personal property for purposes of taxation is popularly divided into two classes—namely, things movable, tangible, and visible, and things wanting in corporality or bodily presence, and therefore, as a rule, intangible and invisible. To the former has been given the general name of "chattels," and to the latter that of "credits"; under which latter name or title are included not only book accounts, bills payable, promissory notes, bonds, mortgages, deeds, bank deposits, certificates of indebtedness, and the like, but also shares of corporate stock, and possibly shares in any partnership. Adopting a popular theory, that credits are property, their aggregate value in all civilized countries can not, probably, be reasonably estimated at less than one half of the aggregate value of all chattels and real estate.
Situs of Personal Property.—As has been already pointed out, it is in the nature of an economic axiom and a fundamental legal principle that the power of every state to tax must be exclusively limited to subjects within its territory and legal jurisdiction. This economic axiom and legal principle is recognized in nearly all countries claiming to be civilized; the principal exceptions being in the States of the Federal Union, where it is violated in respect to both theory and practice—more especially in the State of Massachusetts, the statutes of which define personal estate for purposes of taxation so as to include "goods, chattels, money, and effects, wherever they are; ships, public stocks and securities, stocks in turnpikes, bridges, and moneyed corporations, within or without the State." Thus, for
