46 A. 1043 | R.I. | 1900
The plaintiff sues to recover a tax paid by him in 1899, under protest, upon the ground that it was illegal. The case was submitted to the District Court upon an agreed statement of facts, and certified to this court under Gen. Laws, cap. 239, § 1. The facts show that the assessors of taxes of East Providence intentionally omitted from assessment the manufacturing property of the Grosvenordale Company and the American Electrical Works, and that they did so under a vote of the town council, authorized by the electors of said town, whereby said properties were exempted from taxation for a period of ten years from and after April 11, 1892, and March 22, 1893, respectively; said corporations having agreed to locate and having subsequently located manufacturing property in said town in consequence of such exemption.
The right to make such an exemption was given in Pub. Laws cap. 1088, May 21, 1892; but it was held in McTwiggan v.Hunter,
The question raised is whether the acts were unconstitutional and void, upon the ground that the constitution of the State provides, article 1, section 2, that "the burdens of the State ought to be fairly distributed among its citizens." It is also claimed that the effect of the acts was to take the property of citizens under the guise of taxation and to use it in *183 aid of the enterprises of others which are not of a public character, thus perverting the right of taxation, which can only be exercised for public purposes, to aid individual interests and private purposes of profit and gain.
The question presented is one of great importance. The taxing power is one of the most delicate, difficult, and far-reaching functions of government. It affects all classes and all property. Under our form of government, however, it is, theoretically, a self-imposed burden. Since the days of the Revolution, taxation has been recognized as a representative act.
The power to tax necessarily implies a power to exempt. Taxation being a legislative power, it is not the province of a court to review it, except in cases where the power is limited by constitutional restrictions. The court is then to say whether the legislature had power to pass a given law; not whether it should have passed it.
The provision of our constitution which the plaintiff claims to be a limitation on the taxing power is the clause quoted above: "All laws, therefore, should be made for the good of the whole; and the burdens of the State ought to be fairly distributed among its citizens." The form of this clause is advisory; not mandatory. Ames, C.J., In the Matter of DorranceStreet,
The case in which these words were used was different from the case at bar in this — that it involved an assessment for a benefit arising from the opening of a street, and not an ordinary tax. But the words quoted are entitled to great weight as an interpretation of the constitution, not only from the eminence of Judge Ames as a jurist, but also from his prominence as a member of the General Assembly when the constitution was adopted giving him a peculiar opportunity to know the intended scope of its provisions. Further evidence that the clause in question has been understood to be directory merely is found in the fact that in the proposed revision of the constitution, reported to the General Assembly in 1898, the commission recommended a change from the directory form of "ought to be fairly distributed among its citizens," to the mandatory form of "shall be fairly distributed."
Historically, therefore, the clause has been treated as directory rather than mandatory. Nevertheless, a declaration of right or duty which has been deemed sufficiently important to be embodied in the constitution should not be put aside as a mere generality, if it is of such a character that effect can be given to it as the equivalent of a more positive statement. But suppose the clause in question to *185 be equivalent to the mandatory form: can we hold it to be a limitation on the power of exemption? Undoubtedly taxation may be included among the burdens which are to be fairly distributed. From this postulate the plaintiff argues that an exemption is contrary to the practical direction of the constitution, and, hence, unconstitutional. This conclusion does not follow. There are burdens of citizenship besides taxation. Indeed, taxation is not strictly a burden incidental to citizenship, since persons not citizens of the State may be taxed for property within it. Jury and military duty at once come to mind as among the burdens of the State. Hence, if it be held that because taxation is a burden which "ought to be fairly distributed" the legislature has no power to make exemptions, it must follow that no exemptions from jury or military duty could be made. But immediately following the adoption of the constitution the act relating to jurors exempted some, but not all, State and town officers, and some who had no public duties, such as cashiers of banks, and all persons over sixty-five years of age. The act relating to the militia embraced only white male citizens not over forty-five years of age, and specially exempted many, but not all, State and town officers; persons who had held the office or governor or lieutenant-governor of the State; the inhabitants of New Shoreham and Jamestown; and all persons who had conscientious scruples against bearing arms.
In the act relating to taxes, houses for schools, academies and colleges, owned by any company or corporation, and the land on which they stood, were exempted. These exemptions have not only been continued but have been enlarged, without any question as to their validity. It may be said that these exemptions are fair, because they apply to classes of persons. Some of them are essentially personal; but if they are to be sustained only on the ground of fairness, then the power of the General Assembly to make exemptions is no longer a question. We have cited these instances to show that immediately upon the adoption of the constitution, and continuously since, the power of the General Assembly to *186
make exemptions from the burdens of the State, notwithstanding the clause above quoted, has not been questioned. The same conclusion was forcibly stated by Tillinghast, J., in BrownUniversity v. Granger,
This being so, a law relating to taxation cannot be held to be unconstitutional upon general or uncertain expressions, but only upon plain restrictions. *187
Courts have been very strict in requiring these plain limitations. Henley v. State,
Constitution of New Jersey: "Property shall be assessed for taxes under general laws and by uniform rules according to its true value." Held that this did not preclude the legislature from exempting shares in all corporations except banks. State v.Collins,
Constitution of Alabama: "No man or set of men are entitled to exclusive, separate, public emoluments or privileges, but in consideration of public services." Held that the legislature might commute the tax of corporations. Daughrill v. Alabama,
In Bank v. New Albany,
The rationale of these decisions is that although there have *188 been constitutional restrictions on taxation, from which it might be argued that the same reasons would apply to the case in question, yet, if the case was not necessarily included within the restriction and there was no specific provision of restraint, the court could not declare an act void which the legislature had passed upon the subject within its proper sphere. Applying this doctrine to the case at bar, we have a constitutional provision, which necessarily leaves to the legislature the mode of carrying it out, with no other restriction, if we assume it to be one, than that the burden shall be fairly distributed. This clearly implies a reasonable power of exemption, at the least, since the distribution is not to be positive, but fair. Hence the power of the General Assembly to make exemptions is clear.
The cases cited by the plaintiff are distinguishable. InBrewer v. Brewer,
Without reviewing the cases in detail, they deal, generally, with two classes of acts: those which authorize direct aid to private affairs, and those which violate some express or evident restriction of the constitution. With such a doctrine we should not disagree. *189
It is argued that the exemption in this case is equivalent to taking a tax-payer's money and giving it to the manufacturer. It is not quite that. The theory of the transaction is that a public benefit will accrue to the town and its inhabitants, by the introduction of the business enterprise, equivalent to an exemption from taxes for a certain time, and on this ground it is offered. Suppose the offer is not accepted, and the manufacturer does not build in the town. The plaintiff's tax, for example, would be just the same in either case. A.'s money is not taken to be given to B., but, for a time, B. is not taxed. Possibly A.'s tax might be a trifle smaller if B. should be taxed for his added property, but how does this differ in principle from other exemptions to which we have already referred? It is a question of policy, with which the court has nothing to do, the legislature having the power to decide. The remedy is in the hands of the people and not of the court. The property of a town is benefited, both in value and income, by the introduction of business and the consequent increase of inhabitants. When, therefore, one erects a factory under a contract of exemption, the consideration for which is an expected public benefit, the case is quite different from that of a pure gift.
Conceding the power of the General Assembly to make exemptions, the question remains as to its fairness; and the argument is pressed that these laws are so manifestly unfair that the court ought to say that they exceed a permissible legislative discretion. The question of unfairness is quite distinct from approval. Under our system the towns order their own taxes. By the statute in question, the electors themselves make the exemption. Doubtless they see an advantage in it. Much has been said of late in favor of the referendum. Here is an example of it, and the court would be slow to say that an exemption is unfair which a majority of the tax-payers authorize and the town council approve. We appreciate the force of the argument that such a law permits unseemly competition to entice business from another town, but the point is one of policy and not of law. It *190
should be addressed to the legislature and not to the court. It may be said that it is unfair to tax one whose factory is built, while a new competitor is exempt. This seems to be so at first glance, and in McTwiggan v. Hunter,
Our conclusion is that Pub. Laws, cap. 386, 387, are not unconstitutional.
The court takes pleasure in acknowledging the aid it has received from the able briefs on both sides of this case.
Case remitted to District Court of Seventh Judicial District with direction to enter judgment for defendant for costs.