The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-02-17

was there any vested right standing in
| the way"
This much in order to show that Sue
| cesson or inheritance duties are par
ticularly sources of State revenue. /
am sure among the lawyers of the Leg
islature there can be no question as
to their constitutionality, but this
question was raised by several members
of the Finance Committee who were not
familiar with the law and who feared
they might be ENGRAVING on our tax
laws some untried and possibly illegal
scheme Such a law was in force in
North Carolina from 1847 to 1874. in
the year 1855 the tax was graduated ac-
cording to the degree of relationship,
l per cent. for brothers and sisters.
per cent for uncles, aunts, or their de-
scendants. and per cent for more re-
mote relatives and strangers. In 1897
a new inheritance tax law was enacted
which was very defective in its con-
struction and which was justly unpopu-
lar. This law levied tax of , Is per
cent on all legacies, however small, and
no matter who was the devisee in the
direct line. and a tax of IL per cent on
all legaCies of whatever amount deVls-
ed collaterally, except such as were Tor
charitable uses. The law which we pre-
sent is entirely different from this and
| far more equitable. But the constltu-
| tionality of this 1897 tax was never call
ed in question. The latest decision on
this question was rendered on January
| 29th. only few weeks ago when the
Supreme Court of the State of Michigan
| in a case brought by the heirs of Nj. >
Smith against the probate judge unanl-
mously held in an opinion by Justice
Hooker that the inheritance tax law OF
that State enacted in 1899 was constl-
tutional beyond doubt. The inherit
ance tax in one form or another has
been so uniformly upheld in those
States which have adopted it, and these
now include most of the States of the
Union. that it is hardly necessary to
multiply examples. To show the extent
of its application let me quote from an
article in a recent number of the North
American Review by Prof Max West
| (The. and Prac page GID:
| He writes: The inheritance tax in
one form or another has come to stay,
and new States are being added every
year to the list of those which have
| adopted it. Five years ago it was found
| in only nine States of the Union-Penn-
sylvania Maryland, Delaware, New
York, West Virginia, Connecticut, Mas
sachuSetts, Tennessee and New Jersey.
Ohio, Maine, California, and Michigan
have since been added to the list. In
1894 Louisiana revived her former tax
on foreign heirs; Minnesota adopted a
constitutional amendment permitting a
progressive inheritance tax; and Ohio
added to her collateral inheritance tax
progressive tax on direct inheritances.
In 1895 progressive inheritance taxes
were adopted in Illinois and Missouri,
and an old proportional tax was re-
vived in Virginia; and last year Iowa
adopted in part the inheritance tax re-
commentators of her revenue commits
sion"
PRACTICAL APPLICATION
This ought TO settle beyond shadow
of doubt the constitutionality of the
tax. AS to its practical operation in some
of the States few extracts from the re-
ports of tax commissioners ought to be
satisfactory. In Maryland the Tax Com
missioner says: THE inheritance tax
was first imposed in tS45. All estates
transferred by deed. or by any kind of a
grant intended to take effect after the
death of the grantor, are subject TO a
tax of 213 per cent on every hundred dol
| lars of clear value. This tax IS
one of the surest and most satisfactory
taxes in use. Estates must be registered
at the recorders office and the value
must be appraised for the ordinary pur-
poses of settlement. The tax thus be
| comes inevitable; careful and unpreju-
| diced valuation is secured and collection
through the administrator is made GER
| tain. The Georgia Commission in max
| ing recommendations says In regard
| to new taxes the most desirable that can
| be recommended is that of tax on in
/ hertances, and also a tax on the COM
| missions of executors and administrators.
| The simplicity Of these taxes and the ut
ter impossibility or evasion makes them
| the most desirable of taxes"
| Mr.. E. j. Benton. writing in Studies
| in State Taxation" has this TO say, Up.
| IT.: Turning from the development of
l State corporation tax there still re-
| mains open for Kansas a lucrative and
| legitimate source of revenue, the tax
| upon inheritances. No tax is more in ac-
| cord with the Democratic tendencies of
the day, and toward no other tax has
| there been a more decided movement dur
| ing recent years"
In addition to all that has been said an
| inheritance tax is also justified by every
| argument which can be advanced in favor
l of an income tax. Some economic writer's
| place this tax at once among the income
| taxes only making the distinction that
| this is an income of property instead of
| an income from property. Prof Adams
makes this distinction very clear in his
classification OF taxes. He divides income
taxes into three classes, viz: Income
| from service, income from property and
income of property. In regard to the lat
ter he says (Finance p. $500: THE
third form in which the income tax pre-
sents itself is termed the tax on income
OF property as distinguished from tie
tax on income FROM property. This
phrase is designed to suggest the inherit
ance tax in all of its forms. Many rea-
sons have been urged in support of tic
inheritance tax as a special tax. BY soma
Ii is justified as a means of correcting
the evasion of taxation during the life
of the testator, that is to say. while the
fortune bequeather was in process of ac-
emulation. Others regard it as a pro-
h1f