The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-01-04
THE INHERITANCE TAX,
On Trial To-Day Before Judge
Coffey in the Stanford
Estate.
Senator McAlliSter Points Out WHY
the Law Will Be of Great
Benefit.

The motion to tax the collateral heirs
to the Stanford estate under the new in
heritance tax law comes up again before
Judge Coffey to-day for further argument.
The case involves about $l25, 600, claimed
to be due from over twenty heirs. The
heirs are attacking the law, Calming that
it is unconstitutional. Although the heirs
of a mum Der of large estates have recog-
nized the validity of the law and paid up.
others are awaiting Judge Coffey's deci-
sion.
If the law is sustained it will mean a
large income to the State for the benefit of
the public schools.
Senator Elliott McAllister, the author of
the bill, was some time ago appointed to
look out for it's intere SITS as amicus curia.
Russell Wilson suggested at the time that
it would be more appropriate as pater
iegis-father of the law.
Senator McAllister, speaking of the law
yesterday, said:
you want to know just what it is and
the merits of the law? Judging from the
arguments made recently, one would
imagine il a scheme on the part of the
Legislature to rob people without saying,
by your leave The truth Of the matter
is that this law represents the best possible
r
1t accords itself more nearly to the true
principles of taxation than any existing
law on the statute books to-day. 1t inter
feres less with individual effort than any
other mode except the polltax; but it has
the merit that is lacking in the iniquitous
pol,taX, the merit of being just, and of
being collected from those VINO can best
bear it ana at a time when it can best be
borne. OF course there are various theories
for sustaining this tax. And right here
let me say that it is not to be confused
with the income tax. 1t has nothing to do
with such laws"
What are the features of it?n was
asked.
1T requires the payment to the State of
5 per cent OF the amount received by all
heirs and legatees excepting the children
parents, husband or wife, and brother and
sister of decedent. These are all exempted
from the payment of the tax. And if the
amount received by any of those subject
TO the payment be less than $500, then that
too need not pay. In that way the cIiti-
clsm that such law robs the widow and
orphan and those who may be directly de-
pendent on the decedent is met.
'One of the best explanations OF the
theory OF the law is that it is a payment
for the benefit received from the State by
the beneficiary. Just at the time when the
property of the decedent has no owner, the
CNtibt ny ltS SOuIlS SbcBS III dIlu pIOtcClS II
for the benefit of those entitled to the
property, whether they may be entitled
under a will of the deceased or under the
intestate laws OF the State"
But these exemptions, are they just?"
was asked.
Certainly. The farther removed from
the decedent in relationship the greater is
the benefit of the protection afforded by
the State. The Massachusetts law makes
the same exemption as our law does and
IN the recent decision of their Court of
Appeals the court said that these exemp-
tlons had sanction in reason because the
moral claim of colaterals and strangers is
less than that of kindred in the direct line,
and the privilege. therefore, is greater.
The court, you see, recognizes that the
legatee was paying for privilege, exactly
as person pays license for the privilege
of conducting business"
you speak OF Massachusetts--do the
law exist in other States?'i
Eyes, indeed. The various Legislatures
are enacting them as fast as the sessions
come about; and if the Supreme Court in
any State knocks out the law as unconsti-
tutional the Legislature romptly submits
the matter to the people for a constitu-
tional amendment. You see, now and
then there IS some peculiar constitutional
provision that renders the law invalid
We expect to pull it through safely here
statutes IN the work of Dos Passes on In
heritance Tax Law. The legislation has
been so rapid that second edition Of this
look became necessary, so as to include
the new statutes and the decisions of the
courts.
The money from this tax goes to the
school fund. OF course, the law has only
just commenced to make returns. But the
revenue must in time become very large
About $80,000,0 900 has already been col
lected, and it is difficult to estimate lust
what will be the returns. The large es-
tates require TWO or three years to close
and some time must necessarily pass be-
fore pawn ents can be expected.
The time may come when this method
of raising revenue will be appreciably felt.
Think OF the outrageous method that ex-
lists at present. Our last tax rate is enough
to drive capital from the State. AS for this
law affecting capital, that is all nonsense
No sane person ever heard of capital being
driven from q State because an Inheritance
tax was on the statute books. Ard on the
other hand many real-estate dealer will
tell you about the effect of the last tax
levy on capital.
The objections raised by the Stanford
heirs are legal ones. They hope to show
that they should not pay because his
widow and his brothers are exempt, and
that III this particular the act has not a
uniform operation. Bnt those upholding
the law believe that the act can be sus-
tanned in every particular and that the Su-
preme Courts own decisions will sustain
the contention. This view is also sus-
tanned by the opinions of the courts IN
other States. The Stanford heirs have
taken hope in the decision in New Hamp-
SHIRE that declared the act unconstitu-
tional. But Mr.. Dos Passos comments or
that by declaring that decision to be in
conflict with every well-considered ad-
iudication upon this subject.
Some refer to its novelty. Why, such
laws have existed in Germany, Austria,
Italy, France and England from the
earliest times. Political economists every
where recognize its justice. 1t would be a
serious matter and greatly to be regrett ed
If this law should be declared unconstitu-
tional, and it is to be hoped that this
source of revenue will not be cut off for
the future"
There are more than 300 communities in