Why Double Taxation is Unconstitutional.
Taxation
is the lifeblood of any existing government. Without this power, a
government would not be able to support its operations. The search for
funds will be a difficult process - imagine a government operating from
mere donations and loans from other nations?
Nonetheless, the power of taxation cannot be abused. It cannot be exercised twice on the same person or property. Lawyers and law students recognize this as the principle of "double taxation."
Despite describing double taxation as obnoxious, the Supreme Court has held that there is no constitutional prohibition against it (Villanueva v. City of Iloilo, December 28, 1968). However, the same court has used this principle in many cases to invalidate tax ordinances, one of which is the Nursery Care Corp. v. Acevedo (decided July 30, 2014).
One source, citing an esteemed author, mentions that it is unconstitutional on the ground of violation of equal protection clause for the reason that other persons and properties are not similarly treated. However, a tax ordinance or a tax law is "comprehensive." It covers all persons and properties within the same taxing jurisdiction so this ground could not possibly be invoked. Moreover, even if all classes of persons and properties are similarly treated - thus, escaping the limits of equal protection clause - double taxation is still cited by the Supreme Court as a ground to invalidate tax ordinances.
So what could be the constitutional ground why double taxation is invalid? My theory is that it is unconstitutional on the ground of due process.
The Due Process Clause is flexible enough to cover the obnoxious effects of double taxation. Due Process simply means "responsiveness to the supremacy of reason, obedience to the dictates of justice." (Cruz, Constitutional Law, citing Justice Fernando in Ermita-Malate Hotel & Motel Operators Assn. v. City of Manila, 20 SCRA 849)
The main characteristic of double taxation is abuse - the power is wielded twice in the same period by the same authority on the same property. It becomes an unreasonable, excessive deprivation of property. Hence, even though persons and properties of the same class are all similarly treated by the same authority in the same period, it is still constitutionally impermissible on the ground of Due Process.
Nonetheless, the power of taxation cannot be abused. It cannot be exercised twice on the same person or property. Lawyers and law students recognize this as the principle of "double taxation."
Despite describing double taxation as obnoxious, the Supreme Court has held that there is no constitutional prohibition against it (Villanueva v. City of Iloilo, December 28, 1968). However, the same court has used this principle in many cases to invalidate tax ordinances, one of which is the Nursery Care Corp. v. Acevedo (decided July 30, 2014).
One source, citing an esteemed author, mentions that it is unconstitutional on the ground of violation of equal protection clause for the reason that other persons and properties are not similarly treated. However, a tax ordinance or a tax law is "comprehensive." It covers all persons and properties within the same taxing jurisdiction so this ground could not possibly be invoked. Moreover, even if all classes of persons and properties are similarly treated - thus, escaping the limits of equal protection clause - double taxation is still cited by the Supreme Court as a ground to invalidate tax ordinances.
So what could be the constitutional ground why double taxation is invalid? My theory is that it is unconstitutional on the ground of due process.
The Due Process Clause is flexible enough to cover the obnoxious effects of double taxation. Due Process simply means "responsiveness to the supremacy of reason, obedience to the dictates of justice." (Cruz, Constitutional Law, citing Justice Fernando in Ermita-Malate Hotel & Motel Operators Assn. v. City of Manila, 20 SCRA 849)
The main characteristic of double taxation is abuse - the power is wielded twice in the same period by the same authority on the same property. It becomes an unreasonable, excessive deprivation of property. Hence, even though persons and properties of the same class are all similarly treated by the same authority in the same period, it is still constitutionally impermissible on the ground of Due Process.
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