Conflicting Conceptions of Ownership in Taxation

Abstract

The ideas of property and ownership are very old. Notwithstanding their great age--or more likely because of it--they are far from being clearly defined. A sharp dispute exists as to what constitutes property. According to one view, property consists of such things as land and buildings which are commonly thought of as being owned.' A contrary view denies that such things are property but insists instead that property consists of the various rights and powers or interests involved in ownership.2 This dispute has an important bearing on a more serious controversy involving the classification of limited interests, such as the right of a tenant to use land for a limited period of time, or the right of a person to use stories, plays or inventions for limited purposes, for limited periods or in limited areas. It is commonly considered that such interests are in the nature of privileges or licenses granted by the owner of the property and that they neither constitute property nor give rise to ownership.3 This view as to the nature of limited interests is supported by the following concepts: (1) Ownership is either synonymous with legal title or the two go hand in hand; (2) Property and ownership exist only in the case of interests in perpetuity; and (3) Property is an indivisible entity and anyone having an interest less than complete ownership should not be considered as an owner of property. In contrast it is strongly urged that property rather than being an indivisible entity is instead an aggregate or bundle of rights and powers and that anyone having any of such rights and powers should properly be considered an owner of property.4 A third view, proposed here, recognizes that the creation of limited interests does not result in a division of property but suggests that there is a division of ownership. Accordingly a tenant of land should be regarded as a co-owner with the landlord and hence a co-owner of the property, even though there is no division of the land and hence no division of property. These differences of opinion as to the meaning and nature of property