prosecuted for larceny, the court held that the offense was not larceny, which is the unlawful taking and carrying away of personal property, but trespass, inasmuch as the corn not severed from the ground was real estate, but would have been larceny if the corn had been gathered or disconnected from the ground previous to its taking. Thereupon a bill was introduced into the Legislature of Tennessee to make it a felony to steal corn from a field under any circumstances.
From these illustrations it seems obvious that the distinction between real and personal property and real and personal taxes is, to a very great extent, an artificial and not a natural distinction.
The following are some of the other terms used to designate particular forms of taxation, the meaning and technical application of which may not be readily apparent:
A franchise tax is a tax on a franchise, or on a right granted by a State to a corporation or association to exercise certain privileges. In fact, a franchise is a privilege, and in most cases it is an exclusive privilege, and has an actual value largely disproportionate to the amount of capital invested by the company or corporation upon which it has been conferred.[1] It has been held by the courts that a franchise tax is not a tax on capital or on real estate, but on privilege, and does not exclude additional taxation on any property covered by the franchise.
The terms imposts and "customs" (Latin ""consuitudines") are generally understood to mean indirect taxes on the importation of commodities, while the term duty is more properly applied to a tax upon exports.
The origin of all these terms is obscure and involves some interesting features in English history. It appears certain that they were in the first instance applied to exactions on trade generally, and not, as was finally the case, on imports and exports exclusively, and were in use before indirect taxes on personal
- ↑ The following is a case in point, derived from actual experience: A street railway company in a city of the United States reported the gross earnings of the corporation for 1891 at $1,188,000. Its net earnings were $400,000, or nearly six per cent on a capitalization of $7,000,000. Its city property tax was only $11,000, or $2.10 on $500,000. It is evident, therefore, that the value of the capital of this corporation was due largely to the value of its franchise.
The value of a franchise is an eminently proper subject for taxation, though it is not commonly so regarded. The Supreme Court of Pennsylvania, in a recent case (1894), has held that under the laws of that State it was proper and lawful in ascertaining the actual value of the capital stock of a corporation (Susquehanna and Schuylkill Railroad Company) to take into consideration, as affecting that value, the franchises of the company. Franchises conferred by Congress upon a corporation created by it, to be exercised within a State, can not be subject to taxation by the State without the consent of Congress—California vs. Central Pacific Railroad Company.
