New-York tribune., 1879-04-15
REVISION OF THE TAX LAWS.
ALETTER FROM DAVID A. WELLS.

IetteG MS opinions as 10 tne cOnullIohS uhutr
which the tax laws of this State should be
revised. He argues that 1T is impOlitic to tax
personal property owned by citizens of New
York, but located outside the jurisdiction of
the State, and that there is no good reason
why a discriminating tax should be levied
on railway corporations. Mr. Wells cites sew
eral authorities in support of his argument.
POINTS TO BE CONSIDERED.
URGENT NEED OF REVISING THE TAX LAWS OF
NEw-YORH-IHE BILLS NOW BEFORE THE LEG
IsLAIURF, HOWEVER. UNsOUND AND PROSPECT
IvELY INJUmOUs-GRAvE DEFECTS POINTED
OUT.
To the Edttor Of The Tribune.
SIR: That the existing tax laws of New York are
in urgent need of revision, is proposition which
will probably command the ready assent of every
citizen of the State who has given the subject the
slightest attention. But another proposition which
ought at the same time 20 command an equal APP
proyal and acceptance, would be, that after such
revision is entered upon by the
State Legislature it should not be done
hastily; and. furthermore, that no extreme
and radical charges should be adopted without the
fullest discussion and understanding the part OF
the public and that the great State Of New-Iorh
especially should take care that no enactment for
after find place upon statute book which is not
fully in cOnsOnance with the spirit of the age and
with the results of the most recent investigations III
tins department of economic science. Three bills
proposing radical changes in the existing tax laws
Of New-York are now understood to be before one
both branches of her Legislature fer consldera
How far IN all particulars these bills are HnsOund
in their inception. and prospectiyeiy inju-
rious to the development of the state i'll
their administration cannot well be pointed
out IN a single brief communication; but III respect
TO one two points, sufficient may perhaps be SAID
TO arrest the attention of the public, aud so help
check crude aud hasty legislation so important
matter at the very close of the session. Better far
better that New-York should bear the ills of taxa
ton which she now has, rather than 6y TO others
which she knows not Of.
FUNDAMENTAL PRINCIPLE.
There is one fundamental principle, which in all
discussion of taxation should he accepted at the
outset as IN the nature OF an axiom, and this the
United States Supreme Court in a recent decision.
las clothed in the following language: The
power of taxation however vast in its character and
reaching in its extent is necessarily limited TO sub
iects within the jurisdiction OF the state; these
subjects are persons, property and business. Prop
erty lying beyond the jurisdiction of the state. IS
not a subject upon which her taxing
power can De ie@IliMdlciN tA'tC'StG lbuVtu IL
would seem that no adjudication would be
necessary to establish so obvious a proposition"
1'oreign-held b 1nd case 10 Wallace. p. $40. Ihs
constitutional principle Is in harmony with the
soundest economic science. Uniformity of burden
on all immediate competitors is the very essence
of all sound taxation. But it is obviously impos-
siblc TO effect uniformity of taxation on any given
property and business unless such property and
business are within the jurisdiction OF the taxing
power Taxation which is not uniform i'll respect
to the same class Of persons and the same class OF
property is not entitled to the name Of taxation, and
is nothing but partial confscation arbitrary
exactlon. a state law imposing a tax on whlskey
produced or introduced into Stale by residents.
and excmptiug wAiskey produced or introduced
INTO the State bv nOn-residents would be i'll no
sense a tax. but q arbitrary discrimination
against residents. Primary taxpayers merely ad-
vance the tax and become tax collectors, and they
are enabled to reimburse themselves, because no
| one can obtain tho same article under a uniform
and lust system OF taxation. except it has been
| correspOndingly burdened with taxes This prin-
| ciple always enables primary taxpayer TO obtain
! a market Tor the taxes which they may have adj
| yanced.
| AXloNS OF TAXATION VIOLATED IN TIE BILLS.
! Testing now the bills of the Assembly and Senate
! Of New-York by the rule Of these axioms OF taxa
| tion il wI be found that they are violated in the
proposition embodied in the Senate bill to tax visi-
bic and tangible personal property owned by citl-
! zens of New-York, and located in other States or
! countries and which properly can only be sold in
competition with like property subject to only one
tax mpooitoui. c., in the place OF its actual oca
ton. Both Senate and Assembly bills unite
| also in making citizens Of New-York subject
TO taxation on credits granted by them TO citizens
OS Othor states and countries. But II is not cOmpe
! tent for New-YOrk TO prohibit, impede or obstruct
I her citizens in owning personal property, dong
| business or making contracts in other States and
! beyond her jurisdiction, and the immediate com
pettors Of the citizens of NewYork IN such States
| cannot be burdenod by Now-iork legislation.
! Economic science, therefore. Is in harmony with
| constitutional law in cOndemning extra territorial
taxation. Jurisdiction cannot be acquired by legal
! fctions even if il Is conceded that legal fcuons
may be applied in reference 10 property and bust
| ness where there is jurisdiction. Jurisdiction over
the person gives jurisdiction property beyond
the territory and sovereignty of the State. 1t has
| been repeatedly held that the oOnstiutiOnaty or
unconstitutionality of a State tax is To be deter
mined not by the form OF agency through which
it is to be collected but by the subject upon which
the burden is laid" lease of State Freight tax. 10
| Wallace, 272, United States Supreme Court. II
this proposition were not true, all United States
Constitutional prohibitions might be rendered
nugatOry. States might not tax imports, but the
importer not United States bonds. but resident
holders Of such bonds; not exports but exporters
States might discriminate against States. and i'm
pose @ higher tax on her citlzens lending in
State as compared with lending III other State
and in fact make the rivalry between State and
state nothing other than an lshmaelitlsn fight
THE QUESTION AT ISSUE ALREADY DECIDED.
Tho question here at issue, and which the pending
No7v-York tax bills propose to raise ANEW.
as to the taxation of credits granted by her citizens
10 citizens of other States and also as to the taxa