In re Opinion of the Justices

• Decision Date: 23 March 1908
• Citation: 195 Mass. 607,84 N.E. 499
• Parties: In re OPINION OF THE JUSTICES.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

195 Mass. 607

84 N.E. 499

In re OPINION OF THE JUSTICES.

Supreme Judicial Court of Massachusetts.

March 23, 1908.

Advisory opinion of the Supreme Judicial Court on questions submitted by the Senate, as follows:

State House, Boston,

Senate, March 23, 1908.

Ordered, that the Senate hereby requests the opinion of the Justices of the Supreme Judicial Court on the following important question of law:

In it within the constitutional power of the General Court to enact a law exempting from all other taxation, state and local, the classes of intangible personal property hereinafter enumerated, and to impose thereon, either as a property tax, duty or excise, a uniform tax at the rate of 3 mills in each dollar of the fair cash valuation thereof, viz:

(1) Money on hand, on deposit, or at interest, and other debts due the taxpayer;

(2) Public stocks and securities;

(3) The bonds of domestic and foreign corporations;

(4) The shares in the capital stock of foreign corporations now taxable under the provisions of chapter 12 of the Revised Laws?

This question is propounded with a view to legislation set forth in appendix D of the Report of the Commission on Taxation appointed under the provisions of chapter 129 of the Resolves of 1907, a copy of which is submitted herewith.

Henry D. Coolidge, Clerk.

To the Honorable Senate of the Commonwealth of Massachusetts:

We, the Justices of the Supreme Judicial Court, answer the question submitted to us by your order of March 23, 1908, as follows:

By part 2, c. 1, § 1, art. 4, of the Constitution of Massachusetts, the General Court is empowered ‘to impose and levy proportional and reasonable assessments, rates, and taxes, upon all the inhabitants of, and persons resident and estates lying within the said commonwealth; and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise and commodities whatsoever brought into, produced, manufactured or being within the same. * * * And while the public charges of government, or any part thereof shall be assessed on polls and estates in the manner that has hitherto been practiced, in order that such assessments may be made with equality, there shall be a valuation of estates within the commonwealth, taken anew once in every ten years at least, and as much oftener as the General Court shall order.’ These are the only provisions of this Constitution directly affecting the subject of taxation.

There are other provisions under which the Legislature has acted, relative to particular subjects which involve taxation or exemption from taxation. The third article of the Declaration of Rights, and article 11 of the amendments which was substituted for it, recognize the importance of the public worship of God, and of instruction in piety, and religion and morality, as promoting the happiness and prosperity of a people and the security of a republican government. Accordingly, taxation for these purposes is authorized. As taxation to procure property for such uses is permitted, exemption of property so procured is legitimate, under the special provisions of the Constitution touching this subject. We have also constitutional requirements for the encouragement of literature and science, the diffusion of education among the people, and the promotion of ‘general benevolence, public and private charity’ and other kindred virtues. Const. Mass. part 2, c. 5, § 2. As taxation of the people may be imposed for these objects, property used for literary, educational, benevolent, charitable or scientific purposes may well be exempted from taxation. Such exemptions do not prevent the taxation of the people from being proportional and equal.

The general purpose of the constitutional provision above quoted is to put the burdens of government equally upon all the people, in proportion to their ability to bear them. The Legislature has always had this in view. It is obviously impossible to devise any system of taxation that will be absolutely proportional in its operation upon individuals. The best that the Legislature can do is to approximate closely to the result desired, and to avoid every method which has a direct tendency to produce unreasonable or disproportional taxation.

The constitutional provision authorizes a poll tax upon the inhabitants. Ordinarily it is impracticable to make distinctions among men, founded on their personal ability to earn money and contribute to the expenses of government. But it is consistent with the meaning of the Constitution that ‘persons why by reason of age, infirmity and poverty are * * * unable to contribute fully toward the public charges' should be exempt from liability for such charges. Rev. Laws, c. 12, § 5, cl. 10. It is not unreasonable and does not tend towards disproportional taxation to recognize the facts that every one must have wearing apparel and use household furniture, and that it would be difficult, if not impossible, to appraise and assess such property among persons of small means, and that, ordinarily, such property ought not to be treated as adding directly to one's ability to pay the expenses of government. Accordingly, all wearing apparel, and household furniture to an amount not exceeding $1,000 in value, is exempted for every owner. In like manner farming utensils and tools of a mechanic are treated as a part of the means of earning one's daily bread, which ought not to be deemed property the possession of which should distinguish its owner from men generally, in reference to his ability to support the government. Certain very young animals are treated in a similar way. A widow, or an unmarried woman of adult age, or a person above the age of 75 years, whose whole estate does not exceed in value the amount of $1,000, is entitled to an exemption to the amount of $500. Persons belonging to either of these classes are considered less able than most persons to contribute towards the expenses of government, and the possession of property by such persons to only a very small amount was treated by the Legislature as not calling for an assessment of it in order to make taxation proportional to the ability of different individuals to pay taxes. Similar provisions have been made, for similar reasons, in behalf of certain disabled soldiers and sailors, and their wives or widows.

Plainly, property taken and held for a public use need not be taxed in order to make the taxation of the people proportional and equal. Inhabitants of Wayland v. County Commissioners, 4 Gray, 500. Certain property held by Grand Army associations, as well as the Bunker Hill monument and places dedicated to the burial of the deal, have been treated by the Legislature as properly set apart for uses that are quasi public or charitable, which should not subject the holders of the title to added liability for the expenses of the government. There is also a statute exempting certain plantations of timber trees for a certain time after the planting of the trees. Rev. Laws, c. 12, § 6. It is proper that one's income, to a reasonable amount, should be treated as necessarily consumed for the support of himself or of his family, so that only the excess above such amount should be regarded as property increasing his ability to pay taxes. Rev. Laws, c. 12, § 4.

The excise taxes authorized by the Constitution must be reasonable, but need not be proportional. This method of taxation has been applied to most corporations in this commonwealth, and the constitutionality of the legislation has been established. Owners of stock in corporations which pay an excise tax for the privilege or commodity of doing business and holding and managing property in the business are usually exempted from taxation on their stock, on the ground that otherwise they would be subject to double taxation. Said Chief Justice Bigelow, in Commonwealth v. People's Five Cents Savings Bank, 5 Allen, 428, 437, in sustaining the validity of such an excise tax: ‘The exemption of depositors from direct taxation on the amount of their respective deposits in savings banks, by section 12, obviates an objection-that of double taxation, as already shown-which might otherwise have been urged against the reasonableness of the tax. Nor can it be justly said that this exemption is such as to render the general tax on property throughout the commonwealth unequal and disproportionate. A large portion of such deposits being under five...