The unconstitutionality of unequal taxation is too plainly declared by our constitution, and too well settled by repeated decisions made during the last fifty-three years, to be debatable. A disproportional, unequal assessment, so far as it is disproportional and unequal, is an act, not of taxation, but of confiscation destitute of that element of equal rights which, under our constitution, is an essential part of the definition of law. "Equality is the corner-stone of every just and wholesome system of taxation. Every departure from this principle, no matter what the pretext may be, shifts upon one class a share of the burden of taxation that belongs to another." Rep. Tax Com'rs (1878), p. 10. There are difficult practical questions of application and detail. There may be differences of opinion as to which of those questions are judicial, and which are exclusively legislative. But there is no difference of opinion as to the general constitutional principle of equality. Mathematical equality of taxation being unattainable, an approximation, reasonably exact, as nearly proportional as possible in consideration of the difficulties of the subject, and sufficient for the practical purposes of substantial justice, is all that is required. Cooley Taxation, c. 6; Burroughs Taxation, s. 26.
The legislation of 1878 made the remedy for inequality in the taxation of railroad property the same as for inequality in the taxation of other property. Any person aggrieved by an assessment made by selectmen may apply to the court for an abatement, and on his appeal such order is made as justice requires. G. L., c. 57, s. 12. Any party aggrieved at the decision of the board of equalization may apply to the court for redress, and on the appeal such orders are made as justice may require. G. L., c. 61, s. 9. There is a uniformity of procedure conducive, and perhaps necessary, to *Page 95 the operation of the principle of equality. On appeals from municipal and state assessors, the facts are found; upon the facts, the law is decided and reported; the assessments are equalized by a uniform rule; and the tax-payer, the legislature, and the public have convenient means of knowing what are the decisions of the separated questions of law and fact, and what defects call for alterations of the law. Under this system of procedure, we have both parties, — the tax-payer and the tax-payee, — availing themselves of the right to be heard; and the result is a thorough public investigation of all questions of law and fact. The proofs and arguments brought forward by each party contending for its rights throw a great light upon those questions, and give all a better understanding of the subject; and, in the light thus furnished, the court and the legislature have means of promoting the operation of the rule of equality.
In this case, the facts found by the board of referees are very different from those found by the board of equalization. Important. evidence, laid before the former, and not laid before the latter, sustains the presumption that each board was right on the evidence on which it acted. There is nothing tending to show that, upon the same evidence, there would have been any difference in the conclusions of the two boards.
The questions of fact passed upon by the referees are those which the law would require them to decide if the plaintiffs' tax were a municipal tax of the towns in which the road is located; and their proceedings and conclusions, in their legal characters accord with the constitutional requirement of equality, and the rights of both parties as settled by reported decisions and uniform practice, in cases of town taxes. Cocheco Company v. Strafford, 51 N.H. 455, 475-482; Manchester Mills v. Manchester,57 N.H. 309; Manchester Mills v. Manchester, 58 N.H. 38; Edes v. Boardman,58 N.H. 580, 588. By the terms of the statute, the tax of every railroad is to be "as near as may be in proportion to the taxation of other property in the several towns and cities in which such railroad is located." G. L., c. 62, s.* 1. If this provision is applicable to this case, the facts found by the referees are all we need for making such an order as justice requires.
Taxation requires a uniform valuation and a uniform rate. The expenditures of some towns and counties being greater than those of others, taxes must be higher in some than in others. But the rule of uniformity is coextensive with the territory to which a tax applies, and prevents unjust discriminations. A state tax must be uniform throughout the state, a county tax throughout the county, a town tax throughout the town. 4 N.H. 568; Bank v. Hines, 3 Ohio 1; Gilman v. Sheboygan, 2 Black 510, 517; Pine Grove v. Talcott, 19 Wall. 666, 675; Cooley Con. Lim. 495; Bur. Tax., *Page 96 s. 51. If each railroad tax were a municipal tax, levied for the sole benefit of the towns in which the road is located, the statutory provision that such tax shall be as near as may be, in proportion to the taxation of other property those towns, would be a reenactment of the constitution, since, by the constitutional requirement of proportional taxation, a town tax must be proportional throughout the town. But if the railroad tax is a state tax, this statutory provision is in conflict with the constitution, since, a state tax must be proportional throughout the state; and the question is, whether, under existing law, the tax of a railroad is a municipal tax, which must be proportional with the tax of other property in certain towns, or whether it is a state tax, which must be proportional with the tax of other property throughout the state; or whether it so partakes of the nature of both as to be in part proportional to other taxes in the towns in which the road is located, in part proportional to other taxes in the towns in which stockholders reside, and in part proportional as a state tax.
The assessment and collection of the tax by state officers do not necessarily make it a state tax in every sense and for all purposes. The character and situation of railway property are such that the legislature might be of opinion that equality of assessment, and simplicity and economy of assessment and collection, require municipal taxes of such property to be made by state officers. If they were assessed piecemeal by the assessors of numerous towns, the legal proceedings for making them proportional might be very expensive and harassing. If the whole tax of each railroad assessed and collected by the state, were paid by the state as collector to the several towns in which the road is located in proportion to the value of the property of the corporation in those towns, it might be claimed that the tax would be a municipal tax in such a sense as to justify an assessment proportional to the valuations and rates of other property in those towns. The employment of state machinery for the assessment and collection is not decisive of the question whether the tax is state or municipal. The disposition made of the tax when collected is evidence bearing on that question.
The state pays one quarter of the tax of each railroad to the towns in which the road is located. The remaining three quarters are divided into two parts, one representing, by the rule of proportion, the stockholders residing in New Hampshire, and the other part representing the stockholders residing elsewhere. The former part is paid to the towns in which New Hampshire stockholders reside; the latter part is retained by the state. The money paid to towns is theirs. The money retained by the state is appropriated to the general use of the state. Judged by the disposition made of it, this is not wholly a state tax, nor wholly a town tax; but partly state, and partly municipal. One quarter of it goes to the towns in which the road is located; a part of the other *Page 97 three quarters goes to the stockholders' towns; and the rest to the state.
With this distribution of the money, the tax could be regarded as a municipal tax of the railroad towns if all the stock of each road were necessarily owned in the towns in which the road is located, so that the whole tax would go to them. As this is an impracticable condition, and one not contemplated by the law, the statutory provision, that the tax of every railroad is to be as near as may be in proportion to the taxation of other property in the several towns in which the road is located, cannot be constitutionally applied. So much of the tax as does not go to the railroad towns is not a tax of those towns in any sense, or for any purpose, and cannot be assessed in proportion to their valuations and rates. The proportional rule requires the municipal taxation of a town to be uniform throughout that town, and state taxation to be uniform throughout the state. A state tax, and a municipal tax of stockholders' towns, jointly assessed in proportion to the valuations and rates of railroad towns, are an example of one form of disproportional taxation. A tax not assessed or collected by the railroad towns, and of which they receive but one quarter part, is not a municipal tax of those towns; and an increase of the fraction by including a part of the other three quarters (going to some of them as stockholders' towns) does not make the tax theirs. Whatever the true legal character of the tax may be, it is not entirely a municipal tax of the railroad towns; and as the facts found by the referees are only such as would be material if the tax were a tax of those towns, we have not the facts necessary for making such order as justice requires. The report must be recommitted for a finding of other facts.
The tax is either a state tax, or a tax of a triple character, partly state, partly municipal in respect to the railroad towns; and partly municipal in respect to the stockholders' towns. The referees will find the facts necessary to be known, if it is a state tax; and if either party contends that the assessment should be of a triple character corresponding to the distribution of the tax, the referees will find such facts as would be material in such an assessment. When the facts are found, the parties will have an opportunity to be heard on the question whether, for the purpose of assessment, the tax is a state tax, or of a triple character.
Report recommitted.
All concurred.
* By c. 53, Laws of 1881, the tax is assessable in proportion to the taxation of other property throughout the state. *Page 98