The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-05-15
Government Bonds Not Exempt Under
Either the Enactment of the New
York Legislature or Congress.
REVIEW OF THE DECISION
ITS POINTS MADE CLEAR BY THE
SOLICITOR GENERAL.
Right to Fix Progressive Rates Up
held-several Millions Involved
No Ruling in Kentucky Case.

WASHINGTON, May 1.-THE Supreme
Court OF the United States to-day an
nounced opinions in the cases arising under
the inheritance tax provision of the war
revenue act and also in a case involving
the applicability of the state inheritance
tax law of New York to estates composed
of government bonds. There were five de-
cisions under the federal law and one under
the state law, but two Of the former cases
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 it was held to be purely applicable to
legacies and not to the entire estates or
deceased persons, the court holding that
the tax is on the passing of legacies or
distributive shares of personality, with
progressive rate on each, separately deter
mined by the sum of each of such legacies
or distributive shares" The decisions deal
ing with the federal law a whole were
handed down by Justice White and those
relating to government bonds by Justice
Shiras.
The principal decision in the list, handed
down by Justice White, covered the case
Of Eben j. Knowlton and Thomas A.
Buffum, executors of Edwin +. 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 1t was reversed The
opinion is very voluminous and discusses
exhaustively every phase of the law. Re-
81,
act Justice White said that it was con-
elusive that ii creates no new subject of
taxation. "It simply provides" he said,
''for the progressive rates on the property
mentioned in the opening sentences, which
is described exactly as it was in the act
Of 1864 Now as the act of 1864 taxed, not
the whole estate, but each particular legacy
or d.stributive share, the conclusion cannot
be escaped that the present law does the
same thing, except that there is added
thereto a progressive rate"
A PROGRESSIVE TAX.
Then he took up the question as to
whether the law commands that the
progressive rate shall be measured by the
amount of a legacy or the whole personal
estate, the conclusion being that it was
not the intention to tax the entire estate,
but 'the separate and distinct sums or
items of personal property passing The
conclusion then announced that the
| tax is on the legacies and distributive
shares. the rate being primarily determined
by the classifcations and being progress
lively increased according to the amount of
the legacies or shares"
Continuing on this line the justice said:
'As the whole amount of such personal
property as aforesaid relates to the sum of
each legacy or distributive share consid-
cred separately it follows that all legacies
below $4,000 are not taxed and that those
above that amount taxed primarily by
| the degree of relationship or absence
| thereof specified in the five classifications
contained in the statute. and that the rate
of tax is progressively increased by the
| amount of each separate legacy or distribu-
| tive share. This being the correct inter-
| probation of the statute ii follows that the
| court below enormously maintained con-
trary construction, and therefore the as
| sessment and collection was for a larger
amount than the sum actually due by law"
| The decision held that the tax was not
a direct tax within the meaning of the
| Constitution. but due or an excise tax.
| On the point OF uniformity" as required
| by the Constitution Justice White said the
constitutional requirement was geograph-
( icaL Considering the text" he continued
1T is apparent that If the word uniform
| means equal and uniform in the sense
now asserted by the opponents of the tax
| the words throughout the United States
are deprived of all real significance, and.
| sustaining the contention. must hence lead
| to disregard of the elementary canon of
| construction which requires that effect be
| given to each word of the Constitution
| One of the most satisfactory answers to
the argument that the uniformity required
/ by the Constitution is the same as the
| equal and uniform clauses which have
/ since been embodied in so many of the
| state constitutions results from a review
| of the practice under the Constitution from
the beginning. From the very first Con-
/ gress down TO the present date in levying
| duties imposts and excises the rule of in
/ herent uniformity. or, in other words, In
/ trinsically equal and uniform taxes. has
been disregarded and the principle of geo.
| graphical uniformity consistently en-
| forced"
UNIFORMITY.
On another point of uniformity he said:
"It is yet further asserted that the tax
does not fulfill the requirements of geo.
graphical uniformity for the following rea-
SON As the primary rate of taxation de-
pends upon the degree of relationship or
want of relationship to a deceased person,
IL is argued that 1t cannot operate with
/ geographical uniformity. inasmuch as tes-
tamentary and intestacy laws may differ
in every State. 1t is certain that the same
] degree Of relationship or want OF relation
ship to the deceased. wherever existing. il