This case requires us to decide upon the constitutionality of c. 63, Gen. Laws. Whether, under any circumstances, the statute in question could be regarded as an exercise of the police power, we need not inquire. It is obvious it was not so intended or understood, either by the tax commissioners who reported it or the legislature by which it was enacted, or the commissioners under whose direction it was incorporated with the statutes in the volume of the General Laws. The report of the tax commissioners affords abundant evidence of their understanding that it was a statute solely for raising revenue. They speak of taxes to be raised from "express companies" as a new source of revenue, as one of the subjects of taxation. Report of Tax Com. 23, 24, 25. The title of the bill, as reported by them, was "An act to tax express corporations, companies, or persons carrying on express business in this state;" and the bill itself, as
enacted, is identical with that reported by the commissioners, with the exception that, as enacted, there was an additional section providing for the collection of the tax, and "license" was substituted for "tax" wherever that word occurred in the bill as reported, as though the name by which the imposition was called would determine its nature. In the General Laws it is placed under the general title "Of taxation," and the title of this particular act is "Taxation or the licensing of express companies and express men." The word "license" may have been substituted under the impression that, as an act imposing a tax, it could not be defended; and other reasons, not now necessary to be mentioned, may have led to the change; — but whatever may have been the object, and without considering the title of the act, either as reported or passed, or its particular title and location in the General Laws, in the light of all the surrounding circumstances, and having in mind the provisions of the act, the character of the business upon which it was designed to operate, and the nature, application, and extent of the police power, it can be considered in no other light than that of a statute the object of which is to raise revenue by taxation; and the question before us must be determined on this view of its scope and object.
In considering this case, we recognize the doctrine, so often expressed, that we have nothing to do with the propriety, expediency, or policy of any law; that these considerations concern the legislature, and not us; that our sole duty, when the validity of any statute is challenged, is to ascertain and declare whether it conflicts with the constitution as the paramount law, leaving all other considerations with the legislature and people, where they of right belong. The question is, Does the act in question conflict with the provision of the constitution on the subject of taxation and raising of revenue? — and on this question it is incumbent on the plaintiffs to show under what provision of that instrument it can be sustained. Savings-Bank v. Nashua, 46 N.H. 389, 392.
The only provision of the constitution in which the power of taxation is given in express terms is found in article 5, in which it is declared that "full power and authority are hereby given and granted to the said general court, from time to time, to make, ordain, and establish all manner of wholesome and reasonable orders, laws, statutes, ordinances, directions, and instructions, either with penalties or without, so as the same be not repugnant or contrary to this constitution, as they may judge for the benefit and welfare of this state, and for the governing and ordering thereof, and of the subjects of the same for the necessary support and defence of the government thereof * * *; and to impose and levy proportional and reasonable assessments, rates, and taxes upon all the inhabitants and residents within the said state, and upon the estates within the same, to be issued and disposed of by warrant under the hand of the governor of this state for the time being,
with the advice and consent of the council, for the public service, in the necessary defence and support of the government of this state, and the protection and preservation of the subjects thereof, according to such acts as are or shall be in force within the same.
It is claimed that under this provision the legislature is vested with power to pass all manner of wholesome orders, laws, and statutes for the necessary support and defence of the government, and with the additional power to impose and levy proportional and reasonable taxes; that these provisions are separate and distinct; and that if c. 63 cannot be upheld under the latter clause, it may under the former. If this position can be sustained, the latter provision was superfluous: there was no occasion for it. But it may well be claimed, that if the first clause can be construed as authorizing the raising of revenue for any purpose or under any circumstances, it is modified and restricted by the last clause. The general power is subject to the subsequent limitation. It must not be forgotten that the constitution enforces the idea that the sovereignty is in the people, and that all the power not expressly delegated to the legislature was reserved to the people. The provisions of the constitution must be regarded in the light of a grant to the legislature, and as conferring no power except what is expressly granted, or is indispensable to the exercise and enjoyment of those powers which are expressly granted. While the power of the legislature to raise a revenue for the support and defence of the government is absolute, the way in which it may be exercised is specifically set forth, and the method designated must be followed. The rule, that the general intent appearing shall control the particular intent, must sometimes give way, and effect be given to a particular intent plainly expressed in one part of the constitution, though apparently opposed to a general intent deduced from other parts. Warren v. Shuman,5 Tex. 441; Quick v. White-Water, 7 Ind. 570; Cool. Const. Lim. us
The question as to the construction of article 5, so far as it relates to the subject of taxation, was considered by the court in the opinion in4 N.H. 567; and there was an express decision that the power to levy taxes was based upon and controlled by that clause of the article which confers upon the legislature the power to impose and levy proportional and reasonable assessments, rates, and taxes. It was as distinctly held, that the power to pass all manner of wholesome statutes did not confer the power to impose taxes, except as limited and controlled by the clause which requires that taxes shall be proportional and reasonable. This construction of this provision of the constitution has stood unchallenged more than fifty years, during which period two conventions have been held, and no attempt made in either to modify or change it; and this fact clearly indicates that the construction put upon it by the justices in the opinion cited was in accord with the views of those
conventions, and the people whom they represented. The provisions of article 5 of the present constitution are identical with those on the same subject in the constitutions of 1783 and 1792. In the light of these facts, and considering that the justices who signed the opinion in 4 N.H. were contemporary with many of the framers of the constitution and must have understood their views, it is not easy to avoid the conclusion that the only power conferred upon the legislature to raise money by taxation is found in the last clause of article 5, regulated, limited, and explained by other pro visions of that instrument.
In article 12 of the bill of rights, it is declared that "every member of the community has a right to be protected by it in the enjoyment of his life, liberty, and property. He is therefore bound to contribute his share in the expense of such protection, and to yield his personal service, when necessary, or an equivalent." In article 6 of the constitution the doctrine of the equality of taxation is affirmed, and measures are provided by which it may be ensured. These provisions establish equality and justice as the basis of all constitutional taxation.
While the convention which framed and the people who adopted the constitution recognized the absolute necessity of taxation for the support and defence of the government, and in broad and comprehensive terms conferred the power on the legislature to dispose of the sums raised, they did not forget that the power to tax was a delicate and difficult one; that it was always regarded with jealousy by those on whom it was to be exercised; and it was therefore declared in the bill of rights (article 28), "that no subsidy, charge, tax, impost, or duty shall be established, fixed, laid or levied, under any pretext whatsoever, without the consent of the people, or their representatives in the legislature, or authority derived from that body." This power, inherent in the people, was by them delegated to the general court, subject to the condition that all taxes imposed should be proportional and reasonable upon all the inhabitants of and residents within the state, and upon all the estates within the same. While they granted the power in general terms, they qualified the manner of its execution, and determined the subjects upon which it should operate. It was confined to persons and estates. No other subjects or species of property were recognized as taxable. This was a restraint upon the power of the legislature to impose the taxes. Bank of Commerce v. N. Y. City, 2 Black 620.
If, then, equality and justice is the basis of all constitutional taxation, a statute founded on any other principle cannot be upheld. It is true that absolute equality of taxation cannot in all cases, perhaps not in any case, be attained; but if the inequality results from the inherent difficulty in applying the law, and not from the law itself, we cannot declare the law unconstitutional, and arrest the course of legislation. "The essential characteristics
of any system of taxation properly so called, are certainly equality and universality. All the persons and property within a state, district, city, or other fraction of territory having a local sovereignty for the purpose of taxation, should, as a general rule, constitute the basis of taxation." State v. Charleston, 12 Rich. 702, 732; O'Neal v. Bridge Co., 18 Md. 1. "The principle of just equality is therefore the governing one by which the validity of every tax levied by the legislature is to be determined. This equality can be secured only by uniformity in levying the tax, and a periodical valuation of the estate of every citizen." Black. Tax Titles 6. "It is not sufficient that no tax be imposed on the citizens, but by their representatives in the legislature. The citizens are entitled to require that the legislature itself shall cause all public taxation to be fair and equal in proportion to the value of property, so that no one species of property may be unequally or unduly assessed." 2 Kent Com. 331.
But this general principle of equality, which, independent of any constitutional provision, underlies and forms the basis of all taxation, is enforced here by the provision of the constitution that requires that "all assessments, rates, and taxes shall be proportional and reasonable." It is not left to the discretion of the general court to determine what is equal and reasonable, and to impose such as they may consider equal, but any other than equal and reasonable taxes, rates, and assessments are prohibited; and the equality intended is, "that the same tax shall be levied on the same amount of property in every part of the state, so that each man's taxable property shall bear its due proportion of the tax according to its value." 4 N.H. 568. Not only does the constitution require that all assessments, rates, and taxes shall be proportional or equal, but that they shall also be reasonable. This word is here used as having the same meaning as just, and the sense of the clause is, that taxes shall be laid not merely proportionally, but in due proportion, so that each individual's just share and no more shall fall upon him. This is the sense in which it was understood in 1791; for in the act of Feb. 8, 1791, the language used was, that the selectmen and assessors should assess the polls and estates within their respective towns, according to the rules and directions of law, their just and equal proportion of all sums of money granted by the general court. 4 N.H. 569. The definition of "reasonable" is apparent when we recall the declaration in the bill of rights that every person is bound to contribute his just share to the protection of life, liberty, and property
In considering the constitutional provisions on the subject of taxation, it must not be forgotten that the constitution is not so much a grant of specific powers as a limitation on the exercise of general powers. "The legislative power extends to every proper object of legislation, and is only limited by the constitution, and by the fundamental principles of all government and the inalienable
rights of man. Dart. Coll. v. Woodward, 1 N.H. 111, 114; Concord R. R. v. Greely, 17 N.H. 47, 54; Bank of Commerce v. N. Y. City, 2 Black 620. The doctrine announced in the opinion in 4 N.H. 565 goes no further than to declare that the true constitutional idea and basis of all taxation is equality and justice; and that each person and his estate shall bear his proportional and reasonable share of the public burdens. This view was affirmed in Smith v. Burley, 9 N.H. 423, 427; Savings Bank v. Nashua,46 N.H. 389, 398; Smith v. Exeter, 37 N.H. 556; Savings Bank v. Portsmouth,52 N.H. 17, 26, 29; Morrison v. Manchester, 58 N.H. 538, 549; Edes v. Boardman, 58 N.H. 580, 587; Bank v. Concord, 59 N.H. 75; Bartlett v. Carter, 59 N.H. 105; Bowles v. Landaff, 59 N.H. 164, 190, 193, 195; Gould v. Raymond, 59 N.H. 260, 275; Berry v. Windham, 59 N.H. 288; Robinson v. Dover, 59 N.H. 521; Railroad v. State, 60 N.H. 87, 94.
But it is urged that the contemporaneous and practical construction of the constitution is in harmony with the statute under consideration. It is said that for many years, under the present constitution, there was a tax of one twelfth of the net receipts of the income of mills, wharves, and ferries, and the constitutionality of that tax was never questioned. It is true, that Feb. 7, 1789, such a statute was enacted, in which it was also provided that other property should be taxed at a given rate; but this, as the title and preamble and the act itself show, was only a way of arriving at the valuation of the property, and the doctrine of the equality and justice of taxation was not overlooked. The title of the act is as follows: "An act to establish an equitable method of making rates and taxes, and determining who shall be legal voters in town and parish affairs, and for repealing certain acts hereinafter mentioned." The preamble recites, that "Whereas it is necessary that there should be an equitable rule established by law for making rates and taxes within this state so that every person may be compelled to pay in proportion to his or her estate, and also for ascertaining who shall be legal voters in town and parish meetings."
The act provides that henceforward all public taxes shall be made and assessed in proportion to the amount of each person's poll and ratable estate, which shall be as follows: viz., "All male polls from eighteen to seventy shall be estimated at ten shillings each; all wharves and ferries shall be estimated at one twelfth part of their net yearly income." It enumerates all the different kinds of property subject to taxation, and the rate of each kind. This act, with the title and preamble, may be found in a volume entitled "The Perpetual Laws of the State of New Hampshire, from July, 1776, to Dec., 1788." It was published at Portsmouth in 1789. It was continued in force, without change in the manner, but with slight changes in the rate and with the addition of other kinds of property, until 1833, when the present method of
determining the valuation for the purpose of taxation was adopted. This act falls far short of sustaining the view for which it is invoked. It is rather an argument against that view, for it shows, beyond question, that the understanding at that time was that taxes should be proportional and equal on all kinds of property, according to its valuation. Moreover, it only provided for a tax on property capable of valuation. It did not include business, or the receipts of business. Ferries, wharves, and mills are tangible; and their value can be estimated in different ways, either by taking their income, or the market or salable value, as the basis.
The provisions of our constitution on this subject will be found, on examination, identical with those of the Massachusetts constitution, from which they were copied; and the courts there have on several occasions given a construction to them which, from the ability and high character of the court, and the thoroughness with which the subject has been considered, entitle their adjudications. to great weight, if they are not authority binding upon us
In their constitution there is a provision authorizing "the general court 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." Mass. Con., art. 4. The fact that our constitution was copied from that of Massachusetts, and that the foregoing provision of that constitution was omitted from ours, is significant, since it must have been intentional. The constitution of Massachusetts was adopted in 1780. The first constitution of this state was adopted by the convention in June, 1783, and ratified and adopted by the people, October 31, 1783; These facts warrant the inference that the convention which framed and the people who ratified it did not intend to confer upon the legislature the power to raise revenue in any other way than by an equal and just assessment upon persons and estates; and the previous history of the province, and the contests between the people on the one side and the royal authorities and the government of Massachusetts on the other, tend to show the jealousy with which the power of taxation was regarded. It may have been thought that direct taxation upon persons and estates would be more likely to encourage economy and frugality in the administration of the government, which it declares "are among the indispensable requisites for the preservation of liberty and good government." Bill of Rights, art; 38. But whatever was the reason for the omission, it could not have been accidental.
These provisions of the Massachusetts constitution were first considered and construed in Portland Bank v. Apthorp, 12 Mass. 252. The statute then under consideration was one requiring "all banks within the commonwealth to pay to the treasurer of the commonwealth, for the use of the same, a tax of one half of one per cent. on the amount of capital stock actually paid in." The
court, Parker, C. J., say, "Under the first branch of this power, viz., that of imposing and levying rates and taxes, the requisition upon the banks cannot be justified, for those taxes must be upon property and upon all the inhabitants of, and persons resident and estates lying within, the commonwealth. The exercise of this power requires an estimate or valuation of all property in the commonwealth, and then an assessment upon each individual according to his proportion of that property. To select any individual or company, or any specific article of property, by themselves, would be a violation of this provision of the constitution."
The subject was again considered in Com. v. Savings Bank, 5 Allen 428, on a bill in equity to enforce the payment of three fourths of one per cent. on the deposits in the defendant bank; and the court, Bigelow, C. J., say, "While the power to impose taxes is an inherent and essential power of government, and is conferred on the legislature, yet it is a power to be exercised carefully, and within the exact limits prescribed in that clause of the constitution which creates and defines it." In speaking of the validity of the tax, he says, "Viewed as a tax [assessed under the clause in their constitution similar to our own], it would be contrary to its provisions, because it is not proportional on all persons and estates in the commonwealth, but is assessed on a certain class selected by the legislature for the specific purpose of imposing a tax." The question again arose, in Lowell v. (Oliver, 8 Allen 247; and the court, by Bigelow, C. J., say (page 253), "The power of the legislature as to the imposition of taxes is clearly defined, but the delegation of authority, although ample, is subject to three restrictions: first, that the taxes imposed must be proportional and reasonable; second, that they must be laid according to a valuation on all estates in the commonwealth, made within the current decade [in this state every five years]; and third, that they shall be levied for objects which are within the general purposes enumerated in the clause of the constitution, for which public money may properly be expended."
In Oliver v. Washington Mills, 11 Allen 268, the validity of an act of the legislature, requiring every dividend-paying corporation, organized under a charter or general laws, paying dividends in stock, scrip, or money, to reserve one fifteenth of each and every dividend, and pay the same as a tax or excise to the treasurer of the commonwealth within ten days after the dividend is payable, was considered. The court say, "If it is to be regarded as a tax, it is not within the provisions of the constitution as proportional and reasonable." In defining what is meant by a tax under this clause of the constitution, they say, "It is a charge apportioned either among the whole people of the state, or those residing within certain districts, municipalities, or sections. It is required to be imposed so that if levied for the public charges of government it shall be shared according to the estate, real and personal,
which each person may possess; or, if raised to defray the cost of some local improvement of a public nature, it shall be borne by those who will receive some special and peculiar benefit or advantage which an expenditure for a public object may cause to those on whom the tax is assessed." "The power of the legislature to impose taxes is beyond dispute. It is conferred in express terms, but the limitation of the power is as express as the delegation of it. While on the one hand the authority is conferred in broad and comprehensive terms, so on the other the principle on which it is to be exercised is clearly defined." Com. v. Hamilton Manufacturing Co., 12 Allen 298, was an action to recover a tax on the value of the defendants' property in excess of their real estate and machinery; and the court held that it could not be justified as a tax, because it was not laid according to any rule of proportion, and it was therefore contrary to the provisions of the constitution requiring all taxes to be proportional and reasonable. And the same view was expressed in Com. v. Savings Inst., 12 Allen 312, which was an action to recover a tax under the act of 1862, imposing a tax of one per cent. on the average deposits in savings-banks. These views were reaffirmed in Com. v. Lowell (Gas-Light Co., 12 Allen 75; Ins. Co. v. Loud,99 Mass. 146; Prov. Inst. v. Boston, 101 Mass. 575.
It will be seen that the construction of this clause of our constitution, for which the defendants contend, is sustained by the unbroken current of Massachusetts decisions from 1815 to the present time.
But if it is claimed, against the force of the opinion in 4 N.H. and the Massachusetts decisions, that the power of taxation is conferred by article 2 of our constitution, which declares that "the supreme legislative power within this state shall be vested in the senate and house of representatives, each of which shall have a negative on the other," and that this provision is not contained in the constitution of Massachusetts, it may be urged, in reply, that, granting that the power of taxation is conferred by article 2, it is limited and restricted by the provisions of articles 4 and 5, which follow. Those articles define, with great particularity, the powers which may be exercised by the general court, and would seem to confer all the power required by that body to enable it "to provide for the necessary defence and support of the government, and the protection and preservation of the subjects thereof." If articles 4 and 5 were not understood and intended as restrictions and limitations upon the general power conferred by article 2, it is difficult to understand why they were inserted. They were unnecessary, for they do not enlarge the power of the general court as conferred by article 2, and unless they may be treated as restrictions they are useless. If they are restrictions, it might be suggested that the whole power of taxation is contained in that part of article 5 which authorizes the levy of "proportional and reasonable taxes on
all the inhabitants and residents of and estates within the state," and that they restrict the power not only to the manner of the levy, but to the subjects upon which it can be exercised, viz., persons and estates. If this view is correct, it might well be claimed that the objections to the force to be given to the Massachusetts cases could not be sustained.
In the opinion of the justices, 4 N.H. 566, the court, after referring to article 2, and quoting from article 6 the grant of legislative power, say, "Here the power granted is a power to make all manner of laws and statutes which are wholesome, reasonable, and not repugnant to the constitution. It is, in its nature, a limited and restricted power. But the constitution has not left the power to impose and levy taxes to be exercised under this grant of power, limited and restricted as it is, but has made a special provision on the subject of taxation." After quoting the provision of the constitution which requires that taxes shall be proportional and reasonable, the opinion proceeds: "It is a sound rule, that the different parts of an instrument shall be so expounded as to give meaning to every part, if it be possible. It is not uncommon to find a grant in indefinite general terms, limited and explained by a subsequent enumeration of particulars; and when such enumeration is clearly and explicitly made, it must be construed to control the general terms, for otherwise it will be merely idle and nugatory. Thus in our constitution it is declared, in the first place, that the supreme legislative power shall be vested in two bodies, who are to be styled the general court. But these general terms are subsequently explained and limited by the clause which gives to the general court full power to make, ordain, and establish all manner of wholesome and reasonable orders, laws, statutes, etc., not repugnant to the constitution; for if this clause be not construed to limit and control the other, it is idle and useless. So the grant of full power to make all manner of wholesome and reasonable statutes is broad enough to give the power of imposing and levying taxes. But this grant of power is limited and explained by the subsequent clause, which we have recited, on the subject of taxation. The constitution having, in express terms, given the power to impose and levy proportional and reasonable taxes, it is wholly inadmissible to deduce from any more general terms, used in other parts of the instrument, the power to impose and levy any other than proportional and reasonable taxes: because, if the clause on the subject of taxation be not construed to explain and limit the more general terms used, it will be altogether idle. The constitutional right of the legislature to impose taxes cannot, then, by any sound rule of construction, be held to extend further than to impose proportional and reasonable taxes."
It may also be urged, as is said in Oliver v. Washington Mills, supra, that "in a constitution, the great purpose of which was to
define and limit the powers of government, it cannot be supposed that the power to lay and assess taxes would be granted to the legislature without any obligatory restraint on its exercise. No power is capable of greater abuse, or can be made more oppressive and odious in practice. Of this the framers of the constitution and their contemporaries had had abundant experience and knowledge. Nor can we doubt that by the use of words in the constitution the natural import of which is to put a limit on the exercise of this power, they intended them to have that operation and meaning."
In order, however, that the tax should be proportional, it is not necessary that the rate of taxation should be the same in every town or taxing district in the state. This would be practically impossible, for each town determines for itself what amount must be raised to meet its ordinary expenses, and the amount of property and the persons from whom it is to be raised are different in different towns and taxing districts: but it is required that the rate shall be the same throughout the taxing district; — that is, if the tax is for the general purposes of the state, the rate should be the same throughout the state; if for the county, it should be uniform throughout the county; — and the requisite of proportion, or equality and justice, can be answered in no other way.
In Ohio, where the constitution requires that taxation shall be uniform, the court say, "taxing by a uniform rule requires uniformity, not only in the rate, but also in the mode of assessment upon the taxable valuation. Uniformity in taxing implies equality in the burdens of taxation; and this equality of burden cannot exist without uniformity in the mode of assessment as well as in the rate of taxation; and the uniformity must be coextensive with the territory to which it applies, and it must be extended to all property subject to taxation, that all property may be taxed alike and equally." Bank v. Hines, 3 Ohio St. 1, 15.
The constitution of Wisconsin contains a similar provision; and the court there say that "the act of levying a tax on property consists of several distinct steps, such as the assessment or fixing the value and establishing the rate; and, in order to have the course of proceeding uniform, each step must be uniform, and so must the rate. Uniformity thus becomes equality; and there can be no uniform rule which is not at the same time an equal rule, operating alike on all property which is the subject of taxation." Knowlton v. Supervisors, 9 Wis. 410, 421; Attorney-General v. Winnebago Lake Co., 11 Wis. 35. "The constitution of the state requires, as a rule in levying taxes, that the valuation must be uniform and in all cases alike or equal, operating alike on all the taxable property throughout the territorial limits of the state or municipality within which the tax is to be raised. It has fixed one unbending, uniform rule of taxation; and property cannot be classified, and taxed, as classed, by different rules. When the property is prescribed, the
rule of taxation must be uniform." Lumsden v. Cross, 10 Wis. 282; Gilman v. Sheboygan, 2 Black 510. The case of Attorney-General v. Winnebago Lake Co.,11 Wis. 35, involved the validity of a statute similar to c. 63, the defendant company being required to pay into the state treasury a percentage of their gross receipts; and it was held in conflict with the constitution. A uniform rate per cent. must be levied upon all property subject to taxation according to its true valuation in money, so that all may bear an equal burden. Zanesville v. Richards, 5 Ohio St. 589; Burroughs Tax. 62.
The same doctrine is held in Minnesota, where the constitutional provision is similar. Stinson v. Smith, 8 Minn. 366, 372; Sanborn v. Rice Co., 9 Minn. 273; — and in Illinois — Chicago v. Larned, 34 Ill. 203; Ottawa v. Spencer, 40 Ill. 211; Holbrook v. Dickinson, 46 Ill. 285; — and in Nevada — State v. Eastabrook, 3 Nev. 173, 177; State v. Kruttschnitt,4 Nev. 178; — and in Missouri — Crow v. The State, 14 Mo. 237.
It is true, there are cases where a different doctrine is held; but they are in states in which the constitution contains no provision requiring that taxes shall be proportional and reasonable, or that they shall be equal, or that they shall be assessed by a uniform rule, or any similar form of expression, limiting the power of the legislature in this respect. Such are the cases of Weber v. Reinhard, 73 Penn. St. 373; Durach's Appeal, 62 Penn. St. 491; Bright v. McCullough, 27 Ind. 223; Butler's Appeal, 73 Penn. St. 448; Grim v. School-District, 57 Penn. St. 433. In Weber v. Reinhard, the validity of the tax is placed expressly on the ground that there is no provision of their constitution requiring equality, and the inference fairly is, that if there were such provision the tax could not be upheld. In U.S. Express Co. v. Ellyson, 28 Iowa 370, the court hold a tax similar to that imposed by c. 68 valid, because there is no constitutional provision requiring uniformity or equality in taxation, and they concede that if there were, the tax could not be collected.
If, then, the construction given to the constitutional provision in4 N.H. 560, and to similar provisions in Massachusetts and in other states, is correct, c. 63 cannot be sustained. It imposes a tax of two per cent. on gross receipts, or, in lieu of that, five dollars per mile for the number of miles of railroad over which the business is done, thus impliedly taxing those only who do express business over a railroad, and thereby excepting from its operation business no part of which is done over railroads. This is in no sense a tax on property, or on polls or estates. It does not regard the capital invested, the expenses incurred, or the losses sustained. And if by any process of reasoning it could be held a tax on property, the tax imposed is not proportional and reasonable. It is based, not on valuation, but on business; not on the amount of capital invested, but on the capacity for business of the managers or owners; not on net profits, but on gross receipts. The gross receipts of one company
may be small, and the net profits large; while of another, the gross receipts may be large and the profits small, — or there may be none at all. It makes no allowance for the skill, experience, business tact, or enterprise of the owners or managers, but all these which enter into the gross receipts are thus made to pay a share of the taxes.
The tax assessed bears no such proportion to the whole sum to be raised as the property of the tax-payer bears to the whole taxable property; and it is open to the further objection, that it is double taxation, — for not only is the property employed in the business taxed, but its capacity to earn money, as evidenced by the gross earnings, is also taxed. It is the same in principle as if all the horses or oxen in the state were taxed, and then the owners were required to pay a percentage of their gross earnings. There is no provision for deducting the amount of the tax assessed on the capital: and herein is another element of inequality. It is not imposed in proportion to the whole amount to be raised by assessment on all the property in the state. It is a fixed assessment laid on a certain class of persons regardless of the amount called for from other property, or the percentage assessed on the valuation of other property. It is the same in all cases, whether the property invested or the profits received are large or small. The amount raised is limited only by the success of the persons engaged in the business, without reference to the amount required by the state. If in any case a tax of this character could be levied on business, even then this statute could not be sustained. It is not a tax on all business alike, but one particular kind is singled out from all the others without regard to whether it is advantageous or injurious to the community, and made to bear the whole burden placed on business.
The idea of proportional and reasonable or just and equal taxation is founded on the declaration in the bill of rights, that every member of the community is bound to contribute his share in the expense necessary to the protection of his property. This proportion is wholly destroyed by fixing a tax upon value on one kind of property, and a tax on gross receipts upon another. While the amount to be raised on other kinds of property depends upon the amount required for public objects, and the rate of taxation depends upon the amount of property within the taxing district and the public necessities, under the statute in question the rate is always the same. There can be no proportion or equality between that which is fixed and that which is uncertain and fluctuating If the legislature could legally enact such a statute, there is nothing to prevent them from placing the whole expense of the government upon any one class of business. They can effectually des., roy any business which they choose. The arguments against this law regarded as imposing tax on property apply with equal force if it be regarded as an excise.
Upon these views the conclusion is that no part of the act in question can be supported under the constitution, for there is no warrant for the imposition of any other tax than one assessed upon a proportional and equal valuation of all the different kinds of property on which it is to be levied. We are not unmindful of the importance of the question, and of the difficulty and delicacy of the duty laid upon us, and the considerations by which we should be guided in deciding questions of this character; but when there is a plain and unmistakable conflict between the legislative act and the constitution, however ungrateful the task, we are bound to say that the law must give way, and the constitution be given its full; force and effect.