Omaha daily bee., 1893-11-12

among the noteyorthy contributions OF
America to her own history, TO be read
by all with both Entertainment and in
FEDERAL TAXATION VI LEGACfEs.
In his discussion of the coming tariff
legislation in the North American Re
rielc, Congressman McMillin ac-
knowledges that a democratic tariff will
most likely prove inadequate to the pur-
pose OF raising all the revenue required
for the maintenance of the government.
To prevent the possible deficit he init
mates that the proper remedy is to be
secured in the reimposition of u federal
legacy tax, and it is now practically
assured that the ways and means COM
mittee OF the present congress will de-
vote some of its attention to a measure
of this kind. Its prospects for enact
ment into law, however. are not very
fiattering at the present moment.
The United States tried to impose a
legacy tax once before in its history, but
the attempt was scarcely regarded as a
brilliant success. 1t was introduced
into the bill of 1862, by which the war
system of internal revenue taxation was
established n carried through as a
supplement to the ordinary revenues of
the nation. AS originally passed it pro-
vided for a scale graduated according to
the degree of relationship between the
testator and the legatee, varying from
three-fourths of ] per cent for those of
lineal issue to5 per cent for strangers in
blood and bodies corporate. The rates
were increased by an ~amendatory act of
1864, by which they varied from l per
cent TO q per cent The law was for
years practically a dead letter. For the
fiscal year Of 1865 it yielded but a paltry
$500, 900, while so late as 1868, after
1--WE years trial, the commissioner of in
ternal revenue complained that the gov
eminent did not yet collect in legacy
taxes more than half the amount to
which it vas legally entitled. And
finally the legacy tax was n of the first
taxes abolished, when in 1870 it was de-
termined to gradually reduce the in
ternal revenue taxation. In the whole
eight years that it was supposed to have
been imposed it brought into the
treasury less than 49, 900, 900 and only
twice exceeded 81, 500, 900, results that
have been equaled by the proceeds of
the inheritance tax in the one state of
New York during the past eight years.
If we are guided then by the expert
ence of h federal government with it's
former legacy tax, it will be difficult to
c%onjure upmuch enthusiasm for a repeti-
| tiN, Of tlo+ ~r-.~e Tl.zxz = L-..
ever, another reason, historical and
practical, why the federal government
should leave the legacy tax alone. So
long as the state governments are looked
to for the performance of many and
costly services they must be allowed
certain lucrative Sources for deriving
their revenue. The taxation Of Inherit
ances is peculiarlyadapted to state taxa
ton and the field has already been occu-
pied in twelve of our principal common
wealths. The United States law is
necessarily paramount to state law and
federal tax IN legacies would nave to be
first satisfied before a state tax could be
levied. AS a matter of fact a federal
tax would exclude the state tax because
the exaction OF two similar taxes from
the same property would amount to
practical confiscation and would never
be tolerated by the people of the various
states. The federal legacy tax must
drive out the state inheritance taxes
and by so much impoverish the state
treasures that are already pressed for
sources of revenue
The tendency everywhere seems to be
to relegate the taxation of inheritances
to the field Of local finance. 1t is 80 in
Switzerland, which approaches our form
Of federal government. 1t is 80 in the
German empire, where the legacy tax is
ignored by the commemorative. 1t is so
in Canada and it is 30 in Australia. 1t
is also the present status in the United
States and there is no reason to depart
from the existing conditions. The fed
eral government has established it's
ability to maintain itself from the pro-
ceeds of customs duties, supplemented
by one or two instances Of internal rev.
enue, a field of taxation forbidden the
states by the constitution. 1t is particu-
larly surprising that such a proposal
should come from the democratic party,
which has always been so careful in abb
staining from encroaching within the
line of the financial operations of the
states. A federal legacy tax is as I'M
necessary at the present time as it is I'M
desirable.
THE HA WAIIAN QUESTION.
1t has been the general belief for some