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Miller's Compiled Laws, under the various phases of taxation.-Cooley, Constitutional Limitations, Chapter XIV.

336. We have several times had occasion to notice that governments must have money. Without it they can perform none of their functions, and cannot even exist. This is true of all grades of government, from the township or municipality to the state or the United States. A moment's consideration will show us some of the main things that money must be used for.

337. Thus a township has roads to lay out and to keep in order. It must build and repair culverts and bridges. It may build a town hall, and then must take care of that. There are often noxious animals and weeds that it is willing to pay to have destroyed and sometimes there are "out of door," poor that must have public aid. The town officials give time and energy to town service for which they must be paid. The legitimate annual expenses of an ordinary rural township will thus run from $600 to $1,000. Of course an extraordinary occasion, like the bridging of a large stream, or the building of an unusually difficult piece of road, will entail very much larger expenditures.

338. County expenditures will be of a similar nature but on a larger scale. There are often county roads and bridges and ditches. The "indoor" poor are regu

larly taken care of by the county; hence there will be the county poor-house and poor-farm. The county is the judicial unit and so must have a court house and a jail. Most of the county officers must give their full time to the service of the county and so must be paid adequate salaries. Hence the county will have need for great and varying sums of money.

339. Municipalities of all grades must add very much to such expenditures as these. Fire and police departments must be maintained; there must be pavements for the streets and public sewers; water and lighting are often provided; and there are many other expenses that rural communities do not have. Municipalities thus require proportionately the largest sums of any of the governmental organizations.

340. The state must of course have many officials, some of whom must be paid large salaries. Then it maintains many public institutions which cost annually great sums of money. It also maintains the organized militia, makes other arrangements for the enforcement of its police regulations, and maintains an elaborate system of courts and other machinery for the enforcement of its laws. This is enough to make evident that the state must annually expend several millions of dollars.

341. The questions that arise from all this are, where do these various sums of money come from and how are they obtained? The answer in the first instance is simple. Such expenditures as have been enumerated above are public expenses. They are expenditures of the people through which they seek some common advantage or hope to promote their common interests. Hence the money necessary for them the people must pay and each one must pay his proper pro

portion. Of course this financial interest, like nearly all their other common interests, the people will manage through their established governments, and so our inquiry is as to the processes involved in this kind of governmental action.

342. The whole operation by which a government gets the money necessary for public purposes is called taxation, and several different processes are involved in it. In the first place the public work to be undertaken must be determined upon, and the necessary money must in some way be decreed; this is the levying of the taxes. Then the amount decreed must be apportioned to those who are ultimately to furnish it; this we may call the assessment of the taxes. And finally the money must be gathered together in the public treasury, the collection of the taxes.

343. The first of these processes is evidently legislative. As we know the people have delegated the general legislative power to the state legislature. This in turn, in various charters and acts of incorporation, has delegated certain of these powers to various local bodies, such as the boards of supervisors in counties, and the common councils in cities. But in the towns (and in country school districts) the power of local legislation has come back to the people themselves. Hence the various kinds of legislative bodies will ordinarily levy the taxes, but in the towns the people will tax themselves.

Each of the various legislative bodies is a part of the government, and speaks with authority. When it decrees that a certain amount of money is to be raised, this decree has the same force as any other law and must be obeyed. That is, taxes are not merely voluntary contributions, and if they are not paid willingly,

the state will enforce their payment by the same authority with which it enforces its other decrees. In this as in other things, the individual must conform to the public will when expressed through the proper channels.

344. The distribution of the taxes to those who are to pay them is both a legislative and an executive function. The legislature must decide upon the principles or rules that are to guide in making the apportionment. To apply the principles and make the actual distribution is of course purely executive. The main question is as to the principle of apportionment. The farming of taxes has never prevailed in America, and that method no state would now adopt. During the Revolutionary period there was great discussion with regard to internal and external taxes. External taxes would be duties on imports and these a state is forbidden to levy by the national constitution.1 Hence a state is confined to internal taxes.

345. When we come to consider the theory that underlies the apportionment of internal taxes, the first question is shall men pay equally or in some proportion, and if proportionately, in what proportion. With a moment's consideration we see that nearly all the blessings of a stable and efficient government are of equal importance to all, and so the fundamental principle of taxation would seem to be that all should share equally in meeting the common expense. The most natural tax, in other words, would seem to be a capitation tax. But as a matter of fact, in the development of the state exactly the opposite principle has prevailed. The original "person" was the property holder; and property rights were recognized and enforced before personal rights were thought of. Our earlier laws, even to 'Art. I, Sec. 10.

within a century, were for the advantage of the property holder, and the tone and prejudice of our courts is still in his favor. But the enormous advantage which he has thus had he has had to pay for. The tax rule since the first irregular beginnings of the colonies has been based on the theory of protection to property, and property taxes are all but the only ones we have. The capitation or poll tax is used only for work on the highways in the country districts; and there is imperfectly enforced.'

rect.

346. Internal property taxes might be direct or indiAn indirect tax might take the form of an excise, as on tobacco or spirits. The producer would then pay the tax; but he would add it to the price so that the consumer would indirectly pay it. This form of tax is not at present used by the state. Another form of it is the license or fee. The saloon keeper must pay a heavy license, which of course he must recover from his business, and a franchise fee of one-half mill for each dollar of the authorized capital is required of business corporations. In neither of these cases, however, is the prime purpose that of taxation, but in the one case of restraint and in the other to bring within proper state control.

The income tax would be a form of property tax, but is not at present used in Michigan. But, by a curious return to an old feudal custom, the state does in a limited way impose an inheritance tax. The tax does not apply to real estate passing in direct line; it is I per cent. on personal property over $5,000 (nothing for

'Each man between twenty-one and fifty is supposed to work on the road one day or pay one dollar in cash.

2 Comp. Laws, § 5379

3 Ibid., § 8574f.

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