The record-union., 1893-02-03
INHER1rANcE-TAx BILLS.

There are two bills before the Legisla-
ture providing for tax on inheritances
and legacies. One of these at least is very
long and is by no means so clear as il
might be made. We have not had time
however, to examine either bill so crit
cally as such measures demand. But the
matters of detail may be safely left to the
Judiciary Committees to pass upon. The
principle involved is one so simple and
sound that it may be said at once that an
inheritance-tax ought to obtain under our
system.
Just what such tax should be will oc-
casion division of judgment In New
York 1 per cent. is the rate if the re-
cipient is within the second degree OF
kinship, otherwise 5 per cent. Under the
Senate bill it is proposed that it shall be
in California So on every 500 of actual
market value Of the property; but there
are excluded legacies, requests. and gifts
TO the father, mother, husband, wife,
lawful issue, brother, sister, the wife or
widow of a son, or the husband of a
daughter, or an adopted child. and any
lineal descendant of the decedent born
in lawful wedlock, and any societies or
institutions exempt from taxation.
In that bill it is provided that the fund
thus raised shall be used for the mainte-
nance of system of kindergartens.
That is well enough, but it would be bet
Ter to put the proceeds into the school
1und. and then, if the Legislature so de-
sires, establish the kindergarten system
as part of the common school scheme
and provide for it as literally as is needed
to maintain it.
An inheritance of value above given
sum, surely not to exceed 81, 200, ought to
be taxed to bear share of governmental
burden, because, as Montesquieu puts it,
''the revenue of the State is portion of
his wealth sacrificed by each citizen in
order to gain security for the rest or the
means of enjoying it more agreeably."
Without the State there could be no TAX
ing by or enjoyment of inheritances.
NJ oreover, such tax is not a levy upon
industry nor upon the activity of the
payor. The inheritance comes without
any effort on the part of the recipient.
and is wholly his by virtue of care on the
part of organized society. a true inher-
itance tax should not exempt any one
except husband or wife-that may be
conceded, possibly-and it may be con-
ceded also that, as in New York.
within certain degree the tax shall be
less than in the case of collateral inheri-
tances.
In a number of the States of the
Union Inheritance taxes are levied.
in some only upon collateral, in some
both upon lineal and collateral beneficial
ries. In some States, when the estate
passes to foreign heir or legatee as high
as 10 per cent. of tax is laid on.
1t is probable that there are estates ia
California that would now be valued in
the aggregate, at the very lowest, at $780,
100000, which will probably pass to heirs
and legatees within the next fifteen or
twenty years. At per cent. tax upon
lineal and per cent. tax upon collateral
inheritances and legacies, there would be
yielded to the State an immense sum
that would render it unnecessary, posi-
bly,, TO provide largely other revenue for
the schools.
To pay this tax viii not be felt materi-
ally by the heirs or legatees, can wrong
no one, and will be in line with a policy
that has obtained for many years in other
lands and in some for centuries.
But tax upon collateral inheritances
only, as is proposed by the Senate bill,
Will not yield sum of very large proper
tions in this State for some time to come
for variety of reasons.
The political economist, John Stuart
Mill. held that 'inheritances and Iegacies
exceeding a certain amount are highly
proper subjects for taxation, and the rev.
enue from these should be made as great
as it can be without giving rise to evas-
ions by donation during life, or conceal
ment of property such as it would be i'm
possible adequately to check.''
A later economist, DR.. Perry of Will
Jams College, doubts the wisdom of in
heritance taxation, upon the ground that
as income has but three sources-wages.
profits and rents; and as taxes can Justly
be laid only upon gains; and as gains
arise only out of services exchanged.
therefore gifts springing from sympathy
or benevolence lie outside the field of ex-
change, and are not properly taxable for
passing from the hand ofone to the hands
of another.
This is the strongest argument that has
been or can be advanced against the in
heritance tax-but it is purely senti-
mental one. Men are taxed upon prop
erty; the test of property is sale, that
which viii bring something in exchange
when exposed for that purpose. The tax
is levied to afford protection to that which
organized society resolves to protect and
renders possible of exchange. He who