The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-05-15
U. s. Bonds Held Subject to the Tax
as Well as Property of other
Point as to Taxes Being Equal
and Uniform Held by the Context
TO He Geographical Require
ment. and the Words Not Jsed
I'm the Sense They Are In state
Constftutions-ProR Hate.


opinions in the cases arising under the in
heritance tax provisions OF the war revenue
act, and also in 4 case involving the ap-
plicability Of the state inheritancA tax
law of New York to estates composed Of
government bonds There we're five de-
cisions under the federal law and one un-
der the state law, but two in the former
class applied as did one Of the latter class,
to the taxation of government bonds. The
court held that neither under the state nor
the national enactment were national bonds
exempt from taxation. The validity Of the
general federal law was affirmed. but II
was held to he purely applicable to legacies
and not to the entire estates of deceased
persons the court holding that the tax il
on the passing OF legacies or dlstrlbutive
shares of personality, with a progressive
rate on each TO be separately determined
by the sum of each OF such legacies or
distribuive shares.
The decisions dealing with the federal
law as a whole were handed down by Jus
tice White and those relating TO govern
ment bonds by Justice Shras.
Justice white. Opinion.
The opinion handed down by Justice
White covered all tho various cases before
the court involving the validity of tine in
heritance tax provision of the war revenue
law, except one or two covered by Justice
Shiras. Justice White reviewed the Law at
length, considering the question whether
the law applied to the entire estates or
merely to the legacies. The opinion took
the ground that IL was the intention Of the
act to impose a tax on legaciee only. He
also said the contention that the tax was
direct tax and was therefore unconstitG-
tional was untenahle, as also was tha corr
tention that the matter of inheritance taxes
was one for state regulation only. he
opinion also held that the uniformity pro
vision OF the constitution was not violated
by the law. as that was merely gsDgrapn-
ical.
Justice Shiras opinion covered the phase
OF the law applying to cases in which es-
tates consisting of United States bonds are
taxed. This opinion held that the bonds
were subject TO this tax.
The Principal Case.
The principal decision in the list handed
down by Justice White covered the case
of Eben J. Knowlton and Thomas A. Buff
fun. executors of Edwin f. Knowlton,
brought here from the Eastern district |
of New York The opinion OF the circuit
court was adverse TO the validity of the |
law. and accordingly It was reversed. The |
opinion is a very voluminous one and dis /
cusses exhaustively every phase OF the I
law. Referring TO the progressive" I
feature Of the act Justice White said |
that it was conclusive that # creates no |
new subject OF taxation.
Progressive Feature of the Act.
1T simply provides he said. for the /
progressive rates on property mentioned |
in the opening sentences. which IS de- /
scribed exactly as Il was tn the act OF 1
1854. Now, as the act OF lsf4 taxed not !
the whole estate. but each particular /
legacy or distributive share. the conclu- 4
sion cannot be escaped that the present 4
law does the same thing. except that /
there IS added thereto a progressive rate"
Then he took up the question as to /
whether the law commands that the pro- /
gressive rate shall be measured BY the /
amount Of a legacy OF the whole personal (
estate the conclusion being reached that T
& was not the intention TO tax the entire /
estate, but the separate and distinct sums /
or items of personal property passing /
The conclusion, then, was announced that /
the tax Is "on the iegacies and dlstribu- /
i've ebhFr~1 the fAft Nt4NN primarily Hc- I
termined by the classiAca,ions establish |
ed. progressively increased according 70 !
the amount of the leEacies or shares"
Continuing or this line. the Justice said: /
AS the whole amount of such personal I
property a. aforesaid relates 10 the sum
of each legacy or distribuuve share con
sldered separately. IL follows that all leg
acies below 1880 are not taxes. and that
those above that amount are taxed ph-
mnr!ly by the degree of relationship or
absence thereof specified in The eve class
Scal conventions contained 20 the statute.
and that the rate Of tax is progressively
increased by the amount ~ each separate
legacy or distributive share This being
the correct Interpretation q the statute.
Il follows that the court below err8ne-
0usly maintained a contrary construction.
and .-eresore the tax assessed and coll
lected was for larger amount than the
sum actually due by Law
The decision held that the tax was not
q direct tax witain the meaning Of the
constitution. but a duty or an excise tax.
The Question of Uniformity.
Within the point Of uniformity as re-
quired b. the constitution. Justice White