How a clerk turned corporations into humans
By Joy Arnold
It is claimed by some that 127 years ago, on May 10, 1886, the Supreme Court of the United States (SCOTUS) decided that corporations are people. The claim is not true, though it is hard to imagine a more disastrous impact even if it were: it has been taken for true, with disastrous consequences for the American public.
In the 1880s, Santa Clara County, California, under the state constitution, could tax railroads on their franchise, roadway, railway, rails, and rolling stock. As was its right, the county levied taxes on fences appearing on the Southern Pacific Railroad’s property; at the same time, it did not deduct the amount of the mortgage from the value taxed. When Southern Pacific refused to pay these taxes, the county brought suit in state court.
In response, the railroad had the matter removed to the federal system, where the Federal Court for the Northern District of California agreed with the railroad that the state (or its counties) could not tax fences and must deduct the amount of the mortgage from the taxable value of property. Santa Clara appealed to SCOTUS, where the lower court ruling was affirmed.