(1) The subjects or objects to be taxed. – These refer to the coverage and the kind of nature of the tax. They may be persons, whether natural or juridical; property, whether real or personal, tangible or intangible: business, transactions, rights, or privileges. A state is free to select the subject of taxation and it has been repeatedly held that the inequalities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation so long as such exemption is reasonable and not arbitrary. Thus, the power to tax carries with it the power to grant exemption therefrom.
(2) The purpose or object of the tax as long as it is a public purpose. – The legislative body can levy a tax or make an appropriation provided it is for a public purpose. Its determination, however, on the question of what is a public purpose is not conclusive. The courts can inquire into whether the purpose is really public or private. In the final analysis, therefore, the decision on the question is not a legislative but a judicial function. But once it is settled that the purpose is public, the courts can make no other inquiry into the objective of the legislative in imposing a tax, or the wisdom, advisability, or expediency of the tax.
Judicial action is limited only to a review where it involves:
(a) The determination of the validity of the tax in relation constitutional precepts or provisions. Thus, a tax may be declared invalid because it violates the constitutional requirement of uniformity and equity; or
(b) The determination in an appropriate case of the application of a la. Thus, a court may be decide that a tax has been illegally collected where the taxpayer is entitled to tax exemption or his liability has already been extinguished by reason of prescription.
(3) The amount of rate of the tax. – As a general rule, the legislature may levy a tax of any amount or rate it sees fit. If the taxes are oppressive or unjust, the only remedy is the ballot box and the election of new representatives.
(a) According to Chief Justice John Marshall, “the power to tax involves the power to destroy.” To say. However, that the power to tax is the power to destroy is to describe not the purposes for which the taxing power may be used but the extent to which it may be employed in order to raise revenues. Thus, even if a tax should destroy a business, such fact alone could not invalidate the tax.
As long as the power is exercised within the bounds of constitutional limitations, a tax cannot be held invalid merely because the power which is manifested by its imposition may involve the power to destroy.
(b) Incidentally, our Constitution mandates that “the rule of taxation shall be uniform and equitable.” In a case, our Supreme Court said “The power of taxation is sometimes called also the power to destroy. Therefore, it should be exercised with the caution to minimize injury to the proprietary rights of the taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kills the ‘hen that lays the golden eggs’! And in order to maintain the general public’s trust and confidence in the government, this power must be used justly and treacherously.”
(4) The manner, means, and agencies of collection of the tax. – These refer to the administration of the tax or the implementation of tax laws. Having the sole power to tax, the legislature must equally possess the sole power to prescribe the mode or method by which the tax shall be collected, and to designate the officers through whom its will shall be enforced, as well as the remedies which the State or the taxpayer may avail in connection therewith.
While it is true that executive officials enforce tax laws, this does not involve the choice of the subjects to be taxed, the fixing of the measure or amount of the tax, or the definition of the purpose for which the tax is levied.
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