The taxation of corporations presents difficulties in addition to those which arise in the taxation of individuals. One of the first situations which presents itself is that an artificial individual has been created which can own property and conduct business in which, however, the interest of natural individuals is centered. While the corporation is a separate entity, yet it is one owned by the stockholders, and if a part of the capital has been raised from the issue of bonds, one upon which a lien is held by the bondholders. When, then, these three interests are found in conjunction, the problem immediately arises as to where the tax burden should be placed. Should it be placed upon the corporation alone, upon both the corporation and the stockholders, upon the bondholders as well, or upon all three classes of interests?

Assessment Difficulties. - Difficulties continually arise because of the overlapping of political jurisdictions. One of the first which appears is the inhibition placed upon the states from interfering with interstate commerce. This has made particularly difficult the taxation of public utilities, the lines of which extend into different states.

Where a corporation has property in various states, or where the situs of the property and the residence of the stockholders and bondholders may be in different jurisdictions, and attempts are made to tax the three forms, the serious problem of the double or treble taxation of the same property arises.

Difficult problems are found, also, within each state. In some states the constitution contains what is known as the uniform tax clause - that is, that all taxation must be uniform. This has prevented any taxation of corporations other than by the general tax system. Again, some states have been fortunate in having progressive and wide-awake officials, while other states have been burdened with reactionaries. This causes a wide difference in the tax methods used in the different states, and consequently introduces the condition of varying tax burdens upon similar, and often competing establishments in the various states.

With these problems and difficulties, as well as many others, existing in forty-eight jurisdictions, and with as many sets of officials offering solutions, it is obvious that anything but uniformity exists in the method of taxing corporations. Not only is the general system different, but the method of taxing the various classes of corporations differs. A wide variation also exists in the extent to which the different states resort to corporation taxes for revenue. Some states secure practically the whole amount of the revenue for the budget of the state from this source, while in others the return is insignificant. It is impossible to generalize accurately on the methods used in taxing corporations, and it is undesirable, in a book of this nature, to enter into the details of the various methods which are in use. It will be profitable, however, to review some of the more widely used plans for reaching corporate values, and to note some of the problems which have arisen.