Single tax

“ Some opponents of the single tax declare that the heaviest possible tax on land would yield only a fraction of the revenue needed to finance the government. Single taxers, however, maintain that the tax would yield more than enough revenue to meet public expenditures. ”

“ Until it has, and until statesmen use more care in tax legislation and the regulation of the system, and officers are more conscientious in carrying it out, we need not hope for any rapid movement in tax reform. The tendency here, as in all other reforms, especially where needed, is for some person to suggest a certain political nostrum—like the single tax—for the immediate and complete reform of the system and the entire renovation and purification of society. ”

“ The Single Tax would, thus, hamper the development of countries which need capital from outside. Men who wish to use their own capital, under their own management, might, as the Single Taxers claim, be tempted to come in, if they could be free from taxation on the capital they bring with them; but lenders, who wish a good margin of security, would find less inducement to lend. ”

“ At the present moment the Commissariat of Finance has entered, in the domain of direct taxation reforms, upon the road toward a complete revolution in the old system. The central tax board is now, for the transitional period, working on a project of income and property taxation, the introduction of which will liquidate all the existing direct taxes, without exception. The single tax which is being proposed, is so constructed that it covers the very property of the citizen, i.e., it constitutes a demand that the citizen yield that part of his savings which is above a certain standard, etc. ”

“ He proposes, first, to abolish all existing taxation and to raise the revenue needed for the expenses of government by a single tax upon the value of the land held by each land-owner, the tax not to exceed at any time the fair rental value of the land exclusive of distinguishable betterments. ”

“ The extent of poverty in modern life. (Burch and Patterson, American Social Problems, chapter xvi.)
B. PROGRAMS OF INDUSTRIAL REFORM CHAPTER XI SINGLE TAX 104. DEFINITIONS.—The words "single tax" refer to a policy under which all public revenue is to be raised by a single tax on land value. All other taxes are to be abolished. By land value is meant the value of the land itself, irrespective of all improvements, such as ditches, drains, and buildings. Everything done on the land to increase its value would be counted as an improvement, and would thus be exempt from taxation. ”

“ But when the taxpayer extends his activities with respect to his intangibles, so as to avail himself of the protection and benefit of the laws of another state, in such a way as to bring his person or property within the reach of the tax gatherer there, the reason for a single place of taxation no longer obtains, and the rule is not even a workable substitute for the reasons which may exist in any particular case to support the constitutional power of each state concerned to tax. ”

“ But let me perfectly clear, because I know you’ll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. ”

“ I cannot assent to the view that visible, tangible personal property is not subject to a national tax under the rule of uniformity, whether such uniformity means only territorial uniformity, or equality of right among all taxpayers of the same class. When direct taxes are restricted to capitation taxes and taxes on land, taxation, in either form, is limited to subjects always found whereever population is found, and which cannot be consumed or destroyed. ”

“ This court has repeatedly laid down the doctrine that diversity of taxation, both with respect to the amount imposed, and the various species of property selected either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in the proper sense of those terms; and that a system which imposes the same tax upon every species of property, irrespective of its nature or condition or class, will be destructive of the principle of uniformity and equality in taxation, and of a just adaptation of property to its burdens. ”

“ The exemption of interstate business from the type of State taxation here involved is now made complete.
A business engaging in activities in two or more States should bear its part of the tax burdens of each. If valid, non-discriminatory taxes imposed in these States create 'multiple' burdens, such 'burdens' result from the political subdivisions created by our form of government. They are the price paid for governmental protection and maintenance in all States where the taxpayer does business. ”

“ Taxation is but the means by which government distributes the burdens of its cost among those who enjoy its benefits. And the distribution of a tax burden by placing it in part on a special class which by reason of the taxing policy of the State has escaped all tax during the taxable period is not a denial of equal protection. ”

“ This inherent limitation upon the taxing power forbids the imposition of taxes which are unequal in their operation upon similar kinds of property, and necessarily strikes down the gross and arbitrary distinctions in the income law as passed by congress. The law, as we have seen, distinguishes in the taxation between corporations by exempting the property of some of them from taxation, and levying the tax on the property of others, when the corporations do not materially differ from one another in the character of their business or in the protection required by the government. ”

“ Petitioners contend that a taxpayer's motive is irrelevant in determining whether a transaction should be recognized for tax purposes and that a series of transactions, rather than a single transaction, is of no consequence in determining whether a transaction should be recognized for tax purposes.
Petitioners argue that there is no merit to respondent's claim that the various transactions were shams and argue that there was economic substance to the various transactions involved in this case. ”

“ That tax is to be returned by, and collected from, the corporation as his agent and instrument.
A tax is understood to be a charge, a pecuniary burden, for the support of government. Of all burdens imposed upon mankind that of grinding taxation is the most cruel. It is not taxation that government should take from one the profits and gains of another. That is taxation which compels one to pay for the support of the government from his own gains and of his own property. ”

“ There is little or no uniformity among the taxation schemes of the one hundred comparatively free and sovereign states as economic and other conditions vary greatly in different sections of the continent. Every state has ten basic constitutional provisions which cannot be modified except by consent of the federal supreme court, and one of these articles prevents levying a tax of more than one per cent on the value of any property in any one year, homesites, whether in city or country, being exempted. ”

“ We do not remotely imply that the burden is on the taxing authorities to sustain the constitutionality of a tax. But where the power to tax is not unlimited, validity is not established by the mere imposition of a tax. ”

“ The equal protection clause does not preclude the legislature from changing its mind in making an otherwise permissible choice of subjects of taxation. The very fact that the dividends were relieved of tax, when the need for revenue was less, is basis for the legislative judgment that they should bear some of the added burden when the need is greater.
Numerous retroactive revisions of the federal and Wisconsin revenue laws, presently to be discussed, have imposed taxes on subjects previously untaxed and shifted the burden of old taxes by changes in rates, exemptions and deductions. ”

“ If there were any doubt as to the intention of the states to make the grant of the right to impose indirect taxes subject to the condition that such taxes shall be in all respects uniform and impartial, that doubt, as said by counsel, should be resolved in the interest of justice, in favor of the taxpayer.'
Exemptions from the operation of a tax always create inequalities. Those not exempted must, in the end, bear an additional burden or pay more than their share. ”

“ The vice of the ordinances before us, the Court holds, is that they impose a special kind of tax, a 'flat license tax, the payment of which is a condition of the exercise of these constitutional privileges (to engage in religious activities) .' But the fact that an occupation tax is a 'flat' tax certainly is not enough to condemn it. A legislature undoubtedly can tax all those who engage in an activity upon an equal basis. The Constitution certainly does not require that differentiations must be made among taxpayers upon the basis of the size of their incomes or the scope of their activities. ”

“ Taxation is a practical matter, and if, in the choice of the rule we adopt, we may, as the Court has said in Farmers' Loan & Trust Company v. Minnesota, give some consideration to its practical effect, we ought not, I think, to overturn long-established rules governing the constitutional power to tax, without some consideration of the necessity and of all consequences of the change. ”

“ And, in my judgment, there can be no honest attempt at a fair adjustment of the burdens of a direct tax upon the general property of this or any other country which does not make a decent effort at an equalization in proportion to the true value of each article which is taxed. The true value of an article is necessarily its fair, full value, nothing more and nothing less. If we levy general property taxes, we are compelled to require by law that all property subject to the levy shall be taxed in proportion to its value, and such a rule is inevitably a law for a "full rendition." ”

“ This brought me to the conclusion that, “when a reduction of taxation is about to take place, it is exceedingly important that great care and judgment should be exercised in the selection of the tax to be reduced, in order that the maximum of relief may be afforded to the public with the minimum of injury to the revenue.” ”

“ 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. Unless restrained by provisions of the Federal Constitution, the power of the State as to the mode, form, and extent of taxation is unlimited, where the subjects to which it applies are within her jurisdiction. ”

“ But uniformity in this connection is only another name for equality, for the provision is for 'levying a tax by valuation, so that every person and corporation shall pay a tax in proportion to the value of his or her property.' The value of the property being ascertained, the same rate of taxation must be laid upon all. ”

“ Subsequently to this act being passed-within the fifteen years, and the annual profits not yet exceeding eight per cent-the legislature of the State passed an act taxing the franchise of the road.
'The only way in which the property of this company could be reached for taxation at all, was after the limitation of the fifteen years had expired. The legislature was then at liberty to tax the individual shares of the stockholders, whenever their annual profits exceeded eight per cent. When a statute limits a thing to be done in a particular mode, it includes a negative of any other mode. ”

“ The circular money movements here involved generally began and ended with system entities, with no change in the economic position of the system viewed as a whole. Quite often, the money movements occurred in a single day. The stream of money flowing through the intermediate entities, supported by mere bookkeeping entries or by the devices of back to back loans, was without economic substance. See Karme v. Commissioner, supra.
It is established that the economic substance of a transaction, rather than its form, must control for Federal tax purposes. ”

“ Modern enterprise often brings different parts of an organic commercial transaction within the taxing power of more than one State, as well as of the nation. It does so because the transaction in its entirety may receive the benefits of more than one government. And the exercise by the States of their Constitutional power to tax may undoubtedly produce difficult political and fiscal problems. ”

“ No one species of property shall be taxed higher than another species of property of equal value on which taxes shall be levied; the legislature shall have power to lavy an income tax, and to tax all persons pursuing any occupation, trade, or profession.'
This article has been frequently before the Supreme Court of the State for construction, and until the decision of the present case the requirement of equality and uniformity in the tax has been held to apply only to taxes levied for State, and not to those levied for municipal, purposes. ”

“ Not all state taxation is to be condemned because, in some manner, it has an effect upon commerce between the states, and there are many forms of tax whose burdens, when distributed through the play of economic forces, affect interstate commerce, which nevertheless falls short of the regulation of the commerce which the Constitution leaves to Congress. A tax may be levied on net income wholly derived from interstate commerce. ”

“ If the power of imposing direct taxes be co-extensive with the United States, then it is contended, that the restrictive clause, if applicable to the district and territories, requires that the tax should be extended to them, since to omit them would be to violate the rule of proportion. ”