History of Taxation in the United States

Taxation Assessment in 1889

The following information about Taxation is from the Cyclopaedia of Political Science, Political Economy, and the Political History of the United States by the Best American and European Writers:

“But it may be said, that the state in taxing personal property situate beyond its territory, does not in fact tax the property, but the owner, over whom the state has jurisdiction in respect to such property. In answer to this claim, attention is here asked to the following extract from an argument made some years ago by Mr. G. P. Lowrey, of New York, before a committee of the legislature of New York, when this subject was up before them for consideration. ‘This claim,’ he said, ‘involves a dangerous inaccuracy, and arises from a confusion of the idea of the assessment with the idea of the tax. These two stand upon altogether different bases.

The assessment is to the person in respect to the property; but the tax is to the property in respect to itself alone. In the order of consequence a tax goes before an assessment. A tax stands upon an existing relation between the property and the state, as protector and protected, and is that portion of the public burden which the property ought to bear because of that existing relation. An assessment stands upon the existing relation between the property and its owner or possessor; it follows the tax, and is merely the method of securing it. The danger, in saying that the tax is to the person in respect of his property, is, that, by the form of the expression we justify an assessment upon a person for all property indiscriminately. We transpose the subjects, and make the law seek out the person, and then tax him according to his property, instead of first seeking property which it has a right to tax, and then as a secondary matter, a person to whom it may be assessed. Even if a knowledge of the property is obtained by inquiry addressed to the owner in the shape of a general assessment, still the rationale of the matter presupposes the right to tax on account of the property and our relation to it directly. If we disregard this rationale, we may, perhaps, register an assessment where we are not entitled to levy a tax.’

Assessment and Property

The person to whom the assessment is made need not be the owner. He may be the agent, trustee, guardian, executor or administrator. This is because the property, which owes the tax by reason of being protected, has not hands wherewith to take from itself a portion of itself, to pay for protection to be accorded to the remainder. Therefore the law, following the property to get the tax, makes its demand upon whoever it finds in possession, without inquiring upon what interest the property is based. This it does, ignoring all persons beneficially interested in the title, even the owner himself. ‘Every person,’ says the statutes of New York, ‘shall be assessed, etc., for all personal property owned by him, including all property in his possession, or under his control, as agent, trustee, guardian, etc.’

Keeping this vital distinction between an assessment and a tax clearly in view the mind will come by easy steps to an understanding of how it is that a tax, to a man who has no property in the state, is a tax upon his person. Process is the eye of the law. Its vision is limited by territorial boundaries.

Possesion and Assessment

Thus it will be seen, that, for the purpose of assessment, possession is a title superior to ownership. And I now reiterate, that, according to the theory of our government, a tax stands upon the just obligation of all property to contribute to the support of the power which protects it; but that the assessment stands upon the possession or power of the person assessed, over the property taxed. This may be further illustrated. Movables can never be out of the actual or constructive presence of some one, and, therefore, there is always a person in esse to whom the assessment may be made. But the case is very different with unmovables, and therefore, lands are often taxed and assessed by their own name and designation, and specifically sold to satisfy the specific assessment, no person’s name anywhere appearing in the proceedings.”

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