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Vol. II.)

YOUNGBLOOD v. Sexton.

(No. 12.

a

invalid. It is only the recognition of an existing and a conceded fact, and one that the courts could not, if they would, refuse to recognize.

The idea that the state lends its countenance to any particular traffic by taxing it, seems to us to rest upon a very transparent fallacy. It certainly overlooks or disregards some ideas that must always underlie taxation. Taxes are not favors; they are burdens. They are necessary, it is true, to the existence of government; but they are not the less burdens, and are only submitted to because of the necessity. It is deemed advisable to make careful provision to preclude these burdens becoming needlessly oppressive; but it is conceded by all the authorities that under some circumstances they may be carried to an extent that will be ruinous to individuals. It would be a remarkable proposition, under such circumstances, that a thing is sanctioned and countenanced by the government, when this burden which may prove disastrous is imposed upon it, while on the other hand, it is frowned upon and condemned when the burden is withheld. It is safe to predict that if such were the legal doctrine, any citizen would prefer to be visited with the untaxed frowns of government rather than with testimonials of approval, which are represented by the demands of the tax-gatherer.

It may be supposed that some idea of special protection is involved when a business is taxed, taxation and protection being reciprocal. If the tax upon any particular thing was the consideration for the protection, given to the owner in respect to it, this might be so ; but the maxim of reciprocity in taxation has no such meaning. No government ever undertakes to tax all it protects. If a government were to levy only poll-taxes, it would not be on the idea that it was to protect only the persons of its citizens, leaving their property open to rapine and plunder. In this state our taxes are derived mainly from real estate ; but it has never been suggested that real estate was entitled to special consideration in consequence. In Great Britain real estate pays a relatively insignificant portion of the taxes, although in the social and political state it is more important than all other property. As a general fact the United States has not taxed real property, and though during the recent rebellion it taxed most kinds of business for war purposes, the number of subjects taxed has been several times reduced by legislation since, and may reasonably be expected to be farther reduced hereafter. But the business taxed is no more protected than the business not taxed ; and the fisheries which are favored by bounties are as much protected as either. All this is only an apportionment of taxation by the selection of subjects which under all the circumstances it is deemed wise and politic to subject to the burden. Whether a person in respect to his property or his occupation falls within the category of taxables or not is immaterial, as affecting his claim to protection from the government. It is enough for him that the government has selected for itself its own subjects for taxation and prescribed its own rules. It is his liability to taxation at the will of the government that entitles him to protection, and not the circumstance of his being actually taxed. And the taxation of a thing may be, and often is, when police purposes are had in view, a means of expressing disapproval instead of approbation of what is taxed.

There has undoubtedly been felt and expressed a strong sentimental

Vol. II.)

YOUNGBLOOD 0. SEXTON.

(No. 12.

objection to the doing of anything by the state that even seemed to be a lending of its countenance to a business which the objectors regarded as evil in itself, especially to the state participating in the profits of a pernicious trade. But the objection never found expression in laws forbidding the taxation of liquors or of the business of dealing in them. Indeed, in this state, liquors have always been taxable as property; and so have been the implements by means of which forbidden games of chance have been carried on. Yet, when the keeper of billiard tables is compelled to pay a tax, it can be no defence to him, either in law or in morals, that he is compelled to do so from the profits of an illegal business. To refuse to receive the tax under such circumstances would tend to encourage the business, instead of restraining it; and would not only be unwise, because of exempting one man from his fair share of taxation, but also because it would tend to defeat the state policy which forbids games of chance or hazard.

The idea that a thing is favored because it is taxed may be examined in the light of the practice of this state in some other particulars. It has always been the custom, in apportioning taxes by valuation, to make some discriminations based on reasons of public policy. As an illustration we may mention the case of property devoted to educational or charitable purposes, and which as a rule has been exempted from general taxation. The general belief has been that the interest and welfare of the whole community would be best subserved by abstracting from any imposition of the burdens of government upon such property. And the legislature,

: in apportioning the taxes, has accepted this general belief, and acted upon it. It has been done as a matter of favor and by way of encouragement; and yet if the argument against the tax in this case is sound, we do not see why the state should not have evidenced its approbation of educational and charitable institutions by taking special care that they should feel its burdens, while at the same time it stigmatized other things which were regarded as immoral or pernicious, by refusing to permit them to appear on the tax roll. A tax roll might undoubtedly be made in this manner a roll of reputable names or even a roll of honor, but how any sound public policy would be subserved by it must require considerable ingenuity to point out. It would assuredly not be such policy as states have usually acted upon. While in the selection of objects for taxation, revenue is to be considered and kept in view, it is impossible to exclude other considerations. In proposing a tax it might always be a question whether it should be imposed upon persons or upon property by value, and if so upon what property or business, and if so what kinds of business, or whether it should not be a combination of all these. . One method might be the easiest for the collection of the necessary revenue, but most injurious or unequal in its results. One might discourage industry, and another encourage it. One might collect the tax from luxuries and therefore fall mainly upon the rich, while another would collect it from necessaries and be oppressive to the poor. The whole question would be quite as much one of policy as of necessity, and a legislator would be unfit for his office who did not look beyond the proposed tax to its probable results. This is especially true in every case where the tax has reference to police as well as revenue. A particular business may then be taxed while others

Vol. II.)

YOUNGBLOOD 0. Sexton.

(No. 12.

are spared, not only because for any reason it can best bear the burden, but also because such surroundings attach themselves to the business taxed as to render the discouragement and discipline of heavy taxation wise and politic. In the few cases in which the right to do this has been denied on the ground of inequality, the courts have affirmed it as being beyond question. See Durach's Appeal, 62 Penn. St. 491, 494 ; Fletcher v. Oliver, 25 Ark. 289; State v. Parker, 32 N. J. 426, 431. The federal government has gone to a great extent in the same direction, levying duties in some cases which, in their results, are prohibitory, and in the case of the state banks, purposely taxing them out of existence. Veazie v. Fenno, 8 Wall. 533. This case does not call for an expression of opinion upon legislation of that extreme character, for we have nothing in this law that goes beyond the ordinary legislation when it is enacted for the double purpose of revenue and regulation.

The state has never shown any disinclination to make things morally and legally wrong contribute to the public revenue when justice and good morals seemed to require it. If it were to act upon the idea of refusing to derive revenue from such sources, it ought to decline to receive fines for criminal offences with the same emphasis that it would refuse to collect a tax from an obnoxious business. If the tax is laid by way of discouragement or regulation, it has the same general object in view with the fine; not only as it affects the person taxed and the community, but also in the use to which the money is devoted. Yet the Constitution expressly provides for a library fund, to be derived from the violations of the public law. Const. art. 13, sec. 12. A provision that may as legitimately be said to be a license of crime as a tax on a traffic may be said to be a license of the traffic.

Taxes upon business are usually collected in the form of license fees, and this may possibly have led to the idea that seems to have prevailed in some quarters, that a tax implied a license. But there is no necessary connection whatever between them. A business may be licensed and yet not taxed, or it may be taxed and yet not licensed. And so far is the tax from being necessarily a license that provision is frequently made by law for the taxation of a business that is carried on under a license existing independent of the tax. Such is the case where cities, under proper legislative authority, tax occupations which are carried on under licenses from the state. Ould v. Richmond, 22 Grat. 464 (1 Am. L. T. R. N. S. 241); Napier v. Hodges, 31 Texas, 287; Cuthbert v. Conley, 32 Geo. 211 ; Wendover v. Lexington, 15 B. Monr. 258. The license confers the privilege, but it is not perceived why a privilege thus conferred should not be taxed as much as any other. The federal laws give us illustrations of the taxation of illegal traffic. A case in point was that of the taxation of the liquor traffic in this state previous to the repeal of the prohibitory laws; the federal law found a business in existence and it taxed it without undertaking to give it any protection whatever. McGuire v. Com. 3 Wall. 387; Purvear v. Com. 5 Wall. 475. What would have prevented the state from taxing the same traffic at the same time? Is it any more restricted in the selection of subjects of taxation than the general government is? If one may tax, and at the same time refuse to protect, may not the other refuse to do the same? The only reason suggested

Vol. II.)

YOUNGBLOOD v. Sexton.

(No. 12.

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for a negative reply to these questions is that it was the state itself, not the United States, that made the business illegal, and it would be inconsistent and absurd to declare it illegal and at the same time tax it. But how the inconsistency would appear in one case rather than the other is not apparent. The illegality was declared by competent authority, and yet the federal government taxed the trade, at the same time refusing or being unable to protect it. If protection because of the tax was due to the very thing upon which the tax was imposed, there would be an inconsistency in taxing a prohibited trade ; but treating taxation, however and wherever it may fall, as the return for the general benefits of government, — for the protection to life, liberty, the

social and family relations, as well as to business and property, which is the only legal and proper idea of taxation, there is no inconsistency whatever in making a thing which is not protected one of the measures or standards by which to determine how much the party owning or supporting it ought to pay to the government. If one puts the government to special inconvenience and cost by keeping up a prohibited traffic or maintaining a nuisance, the fact is a reason for discriminating in taxation against him; and if the tax is imposed on the thing which is prohibited, or which constitutes the nuisance, the tax law, instead of being inconsistent with the law declaring the illegality, is in entire harmony with its general purpose, and may sometimes be even more effectual. Certainly whatever discriminations are made in taxation ought to be in the direction of making the heaviest burdens fall upon those things which are obnoxious to the public interest, whenever that is practicable.

For these reasons we think the objections which have been made to the law have no validity.

The decree of the superior court dismissing the bill will be affirmed with costs.

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