sign in sign up
<<
Home , Private property

U-I-313/13-91 27 March 2014

Concurring Opinion of Judge Jan Zobec

1. Although I voted for the Decision in its entirety and also concur to a certain degree with its underlying reasons, I wish to express, in my concurring opinion, my view on from the viewpoint of the constitutional guarantee of private property, especially the private property of residential . The applicants namely also referred to the fact that the real property excessively interferes with the constitutional guarantee of private property, and the Decision does not contain answers to these allegations.

A few brief introductory thoughts on the importance of private property in the circle of civilisation to which we belong

2. Private property entails one of the central constitutional values and one of the pillars of western civilisation. Already the Magna Carta Libertatum or The Great Charter of the of of 1215, which made the king's power subject to law and which entails the first step towards the implementation of the idea of the , contained numerous important safeguards of – e.g. the principle that in order to increase the budget of the state it is necessary to obtain the approval of the representative body; the provision that 's officials must not seize anyone's movable property without immediate payment – unless the seller voluntarily agrees that the payment be postponed; it also ensured protection from unlawful deprivation of possession or (arbitrary) deprivation without a judicial decision.[1] The theory on property also occupies the central position in the of , which inspired the and was reflected in the Declaration of Independence. In the opinion of this thinker of the , whose philosophy profoundly influenced modern , private property already exists on the basis of and before political power is formed. The true and real meaning of governing is the protection of these natural property rights, which Locke connected with . For such reason, he claimed that people created and appointed the in order to thereby protect their lives, , and possessions. And since ownership is a natural right, also the authorisations of the government are, according to him, necessarily limited by the duty to protect private property. He firmly stood by the position that the legislature is not authorised to arbitrarily interfere with private property and that the imposition of taxes without the people's consent is arbitrary, hinders the fundamental law of private property, and undermines the objective and meaning of governing.[2] Both of these – the Magna Carta Libertatum and Locke's view on private property – had a strong influence on the Anglo-American political- philosophical and legal identity. Locke's concept of private property percolated into English common law and in the famous work Commentaries on the Laws of England, William Blackstone built specifically on Locke's formulation.[3] Throughout the entire Revolutionary period, the Americans stressed that real property must occupy a central place in constitutional . And as Arthur Lee stated, private property is the guardian of every other right – to take it away from people is the same as if their were taken away.[4] The Fifth Amendment to the American Constitution (due process of law) explicitly includes Locke's concept, according to which the protection of private property is the principal objective of government, and places private property parallel to life and freedom.

3. Also Article 2 of the French Declaration of the Rights of Man and of the Citizen of 1789 states that the aim of every political association is the preservation of the natural and imprescriptible human rights of man – and these rights are liberty, property, security, and resistance to oppression. Article 17 continues: "Property being an inviolable and sacred right, no one can be deprived of it, unless demanded by public necessity, legally constituted, and under the condition of a just and prior indemnity.”

4. On the other hand, taxes are an inevitable necessity and already by the nature of the matter, the state can only collect them by interfering with the property of its citizens and legal entities, i.e. by nationalising a part of their private property. Therefore, in order to actually be able to protect the private property of its citizens and ensure the implementation and protection of other human rights (and thus fulfil the fundamental objective of its existence), it has to interfere with what it is obliged to protect. This entails the paradox of property, which is expressed through its social, economic, and environmental function. Therefore, the question is whether what is at issue is an internal paradox (of property) or just an external conflict between what is private and what is public. The answer to this question determines how (by what criteria) this paradox or conflict should be resolved and who should supervise it, how, and in what scope. Or more precisely: what is at issue is the question of whether the obligation to pay taxes and other public charges is an internal characteristic of private property, an integral part thereof, or whether it entails an interference therewith, i.e. an outward interference with the human right.

Real is an interference with private property

5. Let me say right from the beginning that I concur with the starting point of the applicants' thesis that a real property tax, especially regarding residential real property, is already by itself an interference with the constitutional guarantee of property and should therefore be subject to the strict test of proportionality. It is true that the first paragraph of Article 67 of the Constitution defines the economic, social, and environmental function of property by stating that the manner in which property is acquired and enjoyed shall be established by law so as to ensure its economic, social, and environmental function. It is also true that the Constitutional has already taken a position thereon, namely that "the right to private property also includes as an integral part thereof – and not perhaps a limitation – the duty to contribute for the needs of the public" and that "already on the basis of the Constitution, also certain property burdens that are carried by those having (the right to) private property are an integral part of the content of private property." The Constitutional Court therefore decided that a tax determined in the framework of the economic, social, and environmental function of private property "still does not entail an interference (limitation) with the constitutionally protected right to private property."[5]

6. I find the position that tax burdens in themselves are still not an interference with the constitutional guarantee of private property, as long as they are not excessive, to be highly disputable, which in other terms entails that the state has in this part "a free hand" to interfere, "if necessary", with the property of its citizens and legal entities. Such namely entails that as long as the tax is not excessive, the owner is also not constitutionally protected from tax burdens and that therefore in this part there is no constitutional protection of property from the state. Namely, the latter can then, by law (that is adopted by any governing majority) and "if necessary", take what it deems to belong to it (provided that the law does not violate some other constitutional principles and orders – e.g. [the principles of] legality, clarity, and the precision of tax legislation, equality, the prohibition of retroactivity)[6] – the state is in this respect namely only bound by the Constitution. And where the Constitution does not impose limits on the state, where there is no constitutional protection from its measures, is where the state has "a free hand".

7. In such circumstances, property, especially when what is at issue is property that is subject to property tax, i.e. property that in the past has already been acquired, is not entirely and effectively constitutionally protected. The primary meaning and purpose of the constitutional guarantee of property is namely the protection of an 's freedom in the property field from the state and its appetites. When we renounce constitutional protection from state interference with a certain part of property, the property is in this part no longer protected and remains, for such reason, in fact only "half-property" that is only protected in civil horizontal relationships between equal to one another, and is not protected from the tax pretensions of the state. Or more directly: such position hands a part of property into the hands of the state. While this can still be advocated with regard to taxes on income and taxes on consumption, it seems to me completely unacceptable with regard to a property tax whose subject is immovable property already acquired in the past.[7]

8. For such reason, I agree with Professor Kerševan that such position according to which the "[f]undamental authoritative interference that in the modern legal regulation influences most often an individual's position and his possibility of free self-realisation, i.e. an interference with his property, […] not only is not limited by the human right to private property, but is (even) an integral part thereof, […] takes from an individual the fundamental function of the human right to private property, which is, in conformity with the nature of the human right to private property, precisely protection from authoritative interferences therewith."[8] The position that an interference is embedded in a human right as an integral part thereof, i.e. its reduction, decrease, and gradual negation, entails similar nonsense as claiming that an illness is an integral part of health (although, by definition, health is the absence of illness). The property of citizens and legal entities is not to function as a cash machine from which the state can randomly withdraw sums of for its needs of one kind of another (and for constitutionally unsupervised needs) even unto the limits of excess.

A separate comment regarding residential real property

9. Due to private property as regards residential real property being given more weight by important constitutional values – not only by freedom in the field of property – its relative weight is correspondingly greater. A dwelling represents one of the essential conditions for life; it is a place that provides to the inhabitants residing therein, in addition to physical shelter, development and integration, and gives them a sense of security; it is "a fundamental component of living in peace, dignity, and security – the three fundamental human rights".[9] Therefore, the private property of residential real property also protects, in a predominant part, the right to a home, to spatial privacy, security, family life, the free development of a personality, and personal dignity. All these values give it a special weight and importance. Especially on the territory of Slovenia. The characteristic of real property reality in Slovenia that stands out is namely the significant dispersion of the private property of residential real property,[10] which means that (in contrast to elsewhere in the world) the private property of such real property has in our country a significantly greater weight. The private property of a dwelling that is intended to generate rental income is something completely different than the private property of a dwelling in which the owner and his or her family or any of his or her closest relatives (also with his or her family) reside. I find the collection of taxes from such an object that does not generate any income for the owner, but serves to carry out other constitutional values (which are highly important from the viewpoint of human personality), especially delicate.

10. Viewed from this perspective, it becomes apparent that the real property tax is not so much a property tax as it is a tax on the right to a home, to privacy, security, personal dignity, etc. This is where I see an additional reason for the position that the limitations of a human right could possibly entail an integral part of that right itself being unacceptable. When ownership of residential real property is concerned, which is a material foundation and condition for numerous other human rights, there is even no normative legal basis in the first paragraph of Article 67 of the Constitution for such a position. There is none because the agglomeration of all other human rights that exist because of and via the human right to private ownership of a dwelling is so strong, so important, and so predominant that it simply drowns out its property components (to which the first paragraph of Article 67 of the Constitution refers, which states that the manner in which property is acquired and enjoyed shall be established by law so as to ensure its economic, social, and environmental function).

The threat of the jeopardising of the substance of property

11. With regard to the real property tax, I see the next reason for applying the criticised position regarding the tax as an integral part of the right to private property to be unacceptable also due to the following: this tax, which is a regular, repeated tax on immovable property, is paid from the regular income of taxable persons, which entails from what remains thereof after all other charges – the personal income tax, pension and health insurance contributions, etc. – are paid. Then, the tax that was paid when the real property itself was acquired should also be added thereto. In total, the aggregate burden often substantially exceeds 50%.[11] If, however, the real property tax was "paid" out of the of the real property itself, i.e. from its substance (from the subject of taxation), then this would entail a pure confiscatory tax – in order to recover tax debt, the state would namely gradually sequester the real property.[12] The fact that such possibilities are not excluded in advance proceeds from Article 15 of the Real Property Tax Act (Official Gazette RS, No. 101/13 – hereinafter referred to as the RPTA), in conformity with which, for taxable persons who on the basis of the that regulate social security benefits are entitled to receive monetary social aid or a supplementary allowance and who are, therefore, in conformity with Article 11 of the RPTA, entitled to a decrease in the real property tax of 50%, there is envisaged "the privilege" of ensuring [the payment] of such tax obligation by registering a lien on the real property along with the prohibition of its sale or encumbering the ownership right on the real property subject to taxation. The essence of such generosity is that the fulfilment of the tax obligation is postponed until the death of the taxable person. For all the other persons, including borderline cases that do not fall within the category of taxable persons determined by Article 11 of the RPTA, general provisions on tax enforcement apply.

12. As regards the property tax – which due to its nature, i.e. the taxation of an already acquired, immovable property, of which the vast majority of residential real is not -generating, leans towards devouring its own substance, i.e. the subject of taxation, which means, in other terms, a gradual reduction of the private property – the position that such tax already entails an integral part of the human right to private property, which is additionally also limited by other important constitutionally protected values as regards residential real properties, is therefore especially unacceptable. Private property is reduced annually by the amount of the tax rate. I do not claim that this is a priori unconstitutional, because a property tax is in itself not unconstitutional. What I wish to draw attention to is only the fact that such a tax entails an interference with the constitutional guarantee of private property and that we cannot say that inasmuch as it is not excessive it is already an integral part of the right itself. Regardless of the amount of the tax rate, it must thus be subject to the strict test of proportionality. From such perspective, it is entirely irrelevant which group of real property is at issue – what is essential is that the taxable base is not income from real property (profit), but its appraised value.

The principle of up to 50% taxation

13. When in Decision U-I-91/98, dated 16 July 1999, the Constitutional Court decided that the prescription of tax burdens cannot be deemed to entail an interference with private property if the taxation is not excessive, it also formed the position that taxation is excessive (and that it thus entails an interference with the constitutional guarantee of private property, which must be assessed in accordance with the strict test of proportionality) when it exceeds 50% of return on such property.[13] This is a formula of the manifest disproportionality of a tax obligation, which indicates when the legislature has (only/already) exceeded the sphere of its autonomy and broke into the constitutionally protected core of private property. The formula is already quantified and does not deal with the weight of the interference with private property. However, this is what should have been essential. Essential, because the individual instance of an affected private property can be weighed with different constitutional values. It is namely not the same if what is at issue is income from stock exchange or commercial and industrial real property whose owner is in some manner already burdened by the tax on profit, not to mention the completely non-profit-generating private property of a residential real property. Precisely the latter has a strong social connotation and a distinctive social function – not only for its holder but for all the members of his or her family, for the spouse, children, and perhaps also others. Moreover, the principle of up to 50% taxation is on the abstract (statutory) level virtually unrealisable, because the integral tax burden is different for each individual taxable person – and it also changes over time. Even if we proceeded from an average taxable person, that would only be a static construct. In fact, the average taxable person does not exist in real life.

14. However, even if we accepted the principle of up to 50% taxation (which within the concept in accordance with which taxes do not entail an interference with private property but a part thereof protects against an increase in the highest tax rates), there exists a substantiated expectation that for a large number of taxable persons the cumulative tax burden (all taxes that taxable persons are obliged to pay and that they pay from their regular income – both income taxes and the property tax) will be excessive due to the magic level of 50% being exceeded.[14] Namely, if we proceed from the supposition that the use of property must at the same time (i.e. equally) serve the community, then this can at most apply to the tax on profits, i.e. that the state is due one half (at most) of what the taxable person created (earned, produced, gained), whereas the taxable person may freely dispose of the remaining half. And since immovable property is only another form of this half of the property that remained with the taxable person after the state seized "its" half due to the social function of private property, its further appetite to sequester this (remaining) property, which is no longer covered by the social function of private property, must be subject to the strict test [of proportionality].

Why the strict test

15. Some might ask what the point is of arguing whether the property tax, if it is not excessive, is actually an interference with the human right to private property. In the end, we namely arrive at the same point: if it is not excessive, it will also pass the strict test of proportionality. And vice versa – if it is excessive, it will also fail the strict test of proportionality. However, there is a difference – it is not only conceptual, but also practical. Considering that the property tax itself entails an interference with the constitutional guarantee of private property, then already the approach of the legislature when introducing and changing (increasing) this tax will be different – knowing that it interferes with a human right, it will act more responsibly, in a more well thought out manner, more considerately, it will not be so superficial or adopted by sleight of hand (although the RPTA is a systemic law, it was adopted in the expedited procedure). Above all, in a procedure before the Constitutional Court the legislature will not bear the burden of passing the strict test of proportionality. It will have to be successful and convincing in arguing that the tax is not only appropriate, but also necessary and proportionate in the narrower sense.

16. It is true that in the field of taxation the legislature has wide discretion – also with regard to the choice of the subject of taxation. For these decisions it bears political responsibility, which does not concern the Constitutional Court. The only element important for the review of constitutionality is that taxes as such primarily pursue the objectives of public finances, which is certainly in conformity with the Constitution and for such reason the test of legitimacy is passed in advance. The constitutionally admissible objective of the prescription of taxes is namely already determined by the first paragraph of Article 146 of the Constitution, in accordance with which the state and local communities raise funds for the performance of their duties by means of taxes (i.e. the fundamental financial objective of a tax). There also cannot be any problems with the appropriateness as the first level of the strict test of proportionality (by which the Constitutional Court assesses whether an interference with a human right is not disproportionate). Already due to its nature, any tax is an appropriate means for filling the budgetary coffers of the state and financing the tasks of the state.[15]

17. The situation is different with regard to necessity. Also here, we must proceed from the principle that in the field of public finances the legislature has wide autonomy. What the amount of the budget is, what its structure is, and which its sources will be is a matter of its political assessment, which is subject to political responsibility. In this respect, the Constitutional Court must be reserved. What it certainly may assess, however, is the question of whether the selected type of tax interferes in the mildest possible manner with the human right to private property (i.e. whether it imposes taxes in the mildest possible manner). The question must be posed whether the taxation is in conformity with justice, which in the field of taxation entails that the tax burden is distributed as evenly as possible between taxable persons. If certain taxable persons pay a higher tax, which means that they are subject to a more intense interference with the right to , in order for others to carry a lesser burden, then it is clear that the burden on those who pay more at the expense of others is not necessary. The same objective (of public finances) that here plays the role of an independent variable (and that in the case at issue would amount to an income of approximately EUR 188 million into the budget of the state and the same total revenue into the municipal budgets)[16] can namely also be achieved in a manner that interferes less with the human right to private property of certain taxable persons – simply in such manner that in conformity with the requirement of tax equality the tax burden is evenly distributed.[17] To illustrate, I ask myself why there applies to the owner of an officially unoccupied dwelling by which he or she resolved the housing distress of his or her child a 0.50% tax rate, whereas a 0.15% tax rate applies to the owner of an officially occupied residential real property (e.g. a single-family house in which there is enough also for the owner's child – possibly the same amount [of space] as in the officially unoccupied dwelling mentioned above in which the child of the owner of that dwelling lives). Or, for that matter, what the difference is between a person who has established a personal on an officially unoccupied dwelling in which (for instance) his or her child lives and a person who is in an equal situation but who did not establish such personal easement (because, for instance, he or she does not trust his or her child that much).[18] And finally, why would someone who owns two residential real properties and lives in both of them alternatingly (the second might be, e.g., a holiday house or a holiday apartment) have to pay tax on one of them at a higher tax rate than, for instance, someone who only owns one residential real property and who resolves his or her need for the other (if he or she has any) by the occasional rental (of a hotel room, a holiday apartment, etc.). After all, what is at issue is the real property tax, i.e. a property tax, not a lifestyle tax – the subject of taxation is property, not the free choice of an individual as to where, how, and with whom he or she will live.

18. In such context, there can (exceptionally) also arise the subsequent question that refers to the necessity of the interference with private property. What I have in mind are the possibilities that certain budgetary revenues be realised in another manner that is less invasive from the perspective of the human right to private property. What is at issue is the possibility of selling (i.e. privatisation) the property of the state – indeed, not in general (also these decisions namely fall within the prerogative of the politics), but exceptionally when disproportionally large agglomerations are owned by the state, when, for instance, the share of the property of the state in the national economy is distinctly predominant (in the energy sector, telecommunications, banks, insurance , and other large economic systems; all of these [sectors] are still in the predominant ownership of the state). If the objective of public finances that is pursued by a property tax is evidently achievable also by selling such property (and thus by a less invasive interference with the private property of citizens), it may be established that an interference with the property of citizens is not necessary.

19. Finally, when assessing the necessity it can also be important what the entire amount of unrecovered tax claims is in comparison with the expected effect of the disputable tax on public finances.[19] The unrecovered tax claims that are (if they are) the consequence of the ineffective work of the state namely cannot entail a reason for an interference with the human right to private property. In particular, because they are contrary to the fundamental principle of tax law – the principle of tax justice or the principle of the equality of taxation, which is derived from the constitutional principle of . It is inadmissible for the state to resolve the burden of its own inefficiency (also the unsuccessful combating of the grey economy falls therein),[20] or, which is even worse, the burden of its potential unsubstantiated (arbitrary) writing-off of tax obligations of certain taxable persons, by imposing additional tax obligations on others. Every tax claim that is unrecovered without substantiation and unjustifiably is an actual contribution to tax inequality and is thus unconstitutional.[21]

20. If the tax passed the test of the criterion of necessity, also passing the test of proportionality in the narrower sense would follow. In this context, it should be assessed whether the objective (the attenuation of the deepening crisis in public finances by a relatively weak financial "injection") justifies the means – the interference with the private property of real property and by such with the constitutional values that this right encompasses with regard to individual groups of real property.

Instead of a conclusion

21. I very much agree with Friderich A. Hayek when he says that the less the probability of an individual acquiring a fortune, the more the current property necessarily seems to be an unjustified privilege. This scholar then continues that politics will certainly strive to tear this property from private hands, by means of either a slow process of high taxation on or a faster process of direct seizure[22] – I would add thereto: or by the excessive taxation of real property already acquired in the past. However, the task of the constitutional judiciary is then to protect the human right to private property – whereby the task of politics (the legislative and executive powers) is to ensure that the existing property will not be (seen as) an unjustified privilege – which entails that it must increase the probability of individuals acquiring a fortune. As for the question of how, the Nobel Laureate immediately explains: "A regulation that is based on private property and on private supervision over the presupposes that such private property can be acquired by any successful individual. If this is not possible, even those individuals that otherwise could possibly become the most renowned capitalists of the new generation can become the enemies of the well-established rich class."[23] And the circle is complete.

Jan Zobec Judge

Notes: [1] "No freeman shall be […] disseised […], except by the lawful judgement of his peers or by the law of the land." [2] J. Locke, Second Treatise on Government, in: P. Laslett (Ed.), Two Treatises of Government, 2nd edition, Cambridge University Press, Cambridge, 1967, p. 380. [3] "So great moreover is the regard of the law for private property, that it will not authorise the least violation of it; no, not even for the general good of the whole community." See W. Blackstone, Commentaries on the Laws of England, London 1765, 1:134–135, 140–141; accessible at: http://press-

pubs.uchicago.edu/founders/documents/v1ch16s5.html (accessed on 26 March 2014). [4] See J. W. Ely, Jr., The Guardian of Every Other Right, Oxford University Press, Oxford, 2008, p. 26. [5] Decision No. U-I-91/98, dated 16 July 1999 (Official Gazette RS, No. 61/99, and OdlUS VIII, 196), paragraph 19 of the reasoning. In this case, the Constitutional Court assessed the tax on banks' balance sheet assets, which initially was defined as a property tax, but was then re-characterised by the Constitutional Court as a "concealed" profit tax. [6] See E. Kerševan, Ustavne omejitve davčnega poseganja v lastninsko pravico, Javna uprava, Vol. 49, Nos. 1–2 (2013), p. 7. [7] The Constitutional Court has not yet assessed true property taxes from the viewpoint of an interference with the right to private property, whereby the hitherto constitutional standpoint on this question with regard to other taxes is not completely established. An early standpoint of the Constitutional Court was to deem that tax burdens entail an interference with private property (e.g. Decisions No. U-I-296/95, dated 27 November 1997, Official Gazette RS, No. 82/97, and OdlUS VI, 157; No. U-I-9/98, dated 16 April 1998, Official Gazette RS, No. 39/98, and OdlUS VII, 74; as well as No. U-I-365/96, dated 4 November 1999, Official Gazette RS, No. 99/99, in OdlUS VIII, 241). The standpoint was changed by the already mentioned Decision No. U-I-91/98. [8] E. Kerševan, op. cit., p. 10. [9] See N. Ćosić, Lastniško stanovanje kot pomemben dejavnik varnosti starejših ljudi (bachelor’s degree thesis), University of Ljubljana, Faculty of Social Sciences, Ljubljana, 2011, p. 16. The author then refers to Allardt's classification of needs into three groups: "to have", "to love", and "to be", and concludes that private ownership of a dwelling fulfils the needs under all three groups (ibidem, p. 17). [10] Slovenia is at the very top of the list of the states with the highest share of privately owned dwellings. As of 1 January 2011, the share of such dwellings was 90%, whereby 78% of all inhabited dwellings were privately owned, meaning that at least one member of the household was the owner. 81% of the population lived in such dwellings. Another important piece of information is that the majority of rental dwellings are non-profit rental dwellings (70%) and that 5% of the entire population lived therein [on that date]. See D. Dolenc, E. Miklič, B. Razpotnik, D. Šter, and T. Žnidaršič, Ljudje, družine, stanovanja, Statistical Office of the Republic of Slovenia, Ljubljana, 2013, pp. 42, 44, 45; accessible at: http://www.stat.si/doc/pub/Ljudje_druzine_stanovanja.pdf (accessed on 26 March 2014). For comparison, in Germany, the share of privately owned dwellings is 41%.

[11] On the basis of international analyses, with regard to the effective taxation of the highest level of income of natural persons and social security contributions (which also entail a charge), Slovenia is ranked first in the world, whereby the taxation of individuals significantly exceeds one half of their income, and lower income is subject to above average taxation as well. The KPMG Individual Income Tax and Social Security Rate Survey 2009 indicates that in 2009 the effective income tax rate applicable on an income of USD 100,000 income amounted to 32.8%, whereas the effective tax rate with regard to social contributions was 22.1%, together amounting to taxation totalling 54.9%, which places Slovenia in the first place in the world. Also from an analysis of the value added tax rates in EU Member States it follows that the 22% tax rate is well above average (VAT Rates Applied in the Member States of the European Union, Situation as at 1 July 2013, European Commission, 2013). [12] From the Order of the German Federal Constitutional Court No. 2 BvL 37/91, dated 22 June 1995 (BVerfGE 93, 121), it follows that property tax can only be assessed in such a manner that when combined with other tax burdens it does not interfere with the substance of the property itself, with the core of the property, and [in such a manner] that it can be paid from a normally expected and possible income (Sollerträge) – otherwise the result of the taxation would entail the gradual confiscation [of the property], which would entail, for a taxable person, a disproportionate burden and a significant interference with his or her property relations. [13] (Also) here, the Constitutional Court followed the German Federal Constitutional Court (see paragraph 22 of the reasoning of Decision No. U-I- 91/98), which in the already mentioned Order No. 2 BvL 37/91 accepted the principle of up to 50% taxation (Halbteilungsgrundsatz), in accordance with which the state can only impose that one half of return on such property (at most) be collected as tax. The 2nd senate (which is not even competent to adopt such decisions; this is in the competence of the 1st senate) derived this principle (only as obiter dictum) from the interpretation of the second paragraph of Article 14 of the Basic Law, in conformity with which property entails obligations and its use shall also [German: zugleich] serve the public good. From the word zugleich, which is etymologically derived from "to equal shares" (zugleich = zu gleichen Teilen), it then came to the conclusion that the property tax, in addition to other taxes, can only sequester profit if the aggregate tax burden on normally expected and possible income – whereby income, deductible expenses, and other reliefs are treated in a standardised manner – remains close to one half in the distribution between what is private and what is public. [14] See note 11.

[15] Cf. paragraph 13 of the reasoning of the already mentioned Decision No. U-I-9/98, dated 16 April 1998. [16] See the concurring opinion of Judge Dr. Deisinger with regard to this Decision, p. 3. [17] See note 15. [18] Empirical data on the number of established personal on dwellings prove that in this regard the legislature evidently interfered with the freedom of disposal in the field of property. According to land register data, as many as 202,251 such easements have been established. That is sufficiently illustrative. See: http://www.delo.si/gospodarstvo/finance/osebna-sluznost- koliko-boste-placali-notarju.html (accessed on 26 March 2014). [19] If the real property tax were collected in its entirety it would contribute approximately EUR 188 million to the budget of the state. See the concurring opinion of Judge Dr. Deisinger with regard to this Decision, p. 3. [20] As comparable experiences prove, the introduction of certified cash registers is more effective than the propaganda slogan "Use your mind, don’t leave your receipt behind". [21] From data that the Tax Administration of the Republic of Slovenia sent to the Constitutional Court by letter No. 0100-952/2014-3, dated 10 March 2014, it follows that as of 31 December 2013 the combined tax debt of all natural persons and legal entities amounted to as much as EUR 1,472,787,087. Of course, the unrecovered taxes from the grey economy are not included in this amount. If we were to also include such taxes, the total amount of the tax inefficiency of the state would be incomparably higher. [22] F. A. Hayek, Ustava za svobodo, Inštitut Karantanija and Inštitut Nove revije, Ljubljana, 2012, p. 487. [23] Ibidem, p. 488.