PRINCIPLES OF TAXATION. .605 



PRINCIPLES OF TAXATION. 



By DAVID A. WELLS, LL.D., D.C.L., 



CORRESPONDAUT DE l'iNSTITLT DE FRANCE, ETC. 



X. NOMENCLATURE AND FORMS OF TAXATION. 



( Continued from page 4^0.) 



""OEAL" AND PERSONAL TAXES. Direct taxes are also 

 J-V spoken of, and in fact, classified as real and personal 

 taxes. " Real " taxes (Latin res, thing), or taxes on realty, as is 

 tlie general expression, are taxes on property generally on things 

 naturally characterized by immobility without reference to the 

 pecuniary condition of the owner, and hence without taking his 

 debts into account. A tax on land or real estate houses and 

 land is a typical tax on realty ; and a tax legally assessed upon 

 such property rests, or is a lien upon it, irrespective of its owner- 

 ship. 



Business taxes are regarded as real taxes, as they are taxes on 

 pursuits or occupations rather than on persons. The same is true 

 of taxes on capital and the rental value of land or buildings.* 

 The restriction on the levy of direct taxation imposed by the Con- 

 stitution of the United States on the Federal Government does 

 not apply to the States. 



Personal taxes are taxes on persons. A poll or " capitation " 

 or " head " tax, implying a uniform payment from every poll or 

 head of some portion or all the population of the State, would be 

 a typical personal tax. Strictly speaking, therefore, a personal 

 tax can be no other than a poll tax levied under the above con- 

 ditions. What are usually called personal taxes are taxes as- 

 sessed or rated to a person, not as in the case of a poll tax because 

 he is a person or citizen, but in virtue of the movable property 

 furniture, clothing, vessels, carriages, animals, money at interest, 

 stocks in corporations, bonds, or negotiable instruments and the 

 like belonging to him. It is the individual that the law regards 

 as the objective rather than his personal property which may 

 not be tangible or visible on enforcing the tax ; the property 

 being resorted to for the purpose of ascertaining the amount of 

 tax which its owner should pay. An income tax is regarded as a 

 personal tax because it is assessed on the income that gathers 

 about a person irrespective of its source rents, interest, profits, 

 salaries, and the like. A tax on land is a tax on realty, while a 

 tax on a mortgage is a personal tax, which is equivalent to aflBrm- 



* " Real estate for the purpose of taxation shall include all lands within this State, and 

 all buildings or other things erected on or affixed to the s&iwe.'''' ^Statutes of Massachusetts. 



