Omaha daily bee., 1909-03-21
The Inheritance Tax,

The inheritance tax, recommended
by President Taft in his inaugural adj
dress and embodied in the new tariff
bill, had it's origin with the Egyptians
long before the Christian era and has
been employed in various forms by
states and nations very generally since
the time of the Roman wars against
Pompey, being used originally as a
war revenue measure and ~latterly
adapted to more immediate peace
needs. 1t is in force today in France,
Germany, Switzerland, Great Britain
and practically all important foreign
countries. In the United States the
federal government used the system
twice, from 1862 to 1870 and from
1898 to 1902. The different states of
the union now generally have inherit
ance tax laws. The tax has been
thoroughly established as a sound
economic principle and the real prob
lem before the present congress will
be to adapt 1t to national needs with
out infringing upon the claims of the
states to this source of revenue.
The chief opposition to the proposed
national inheritance tax is that it
would superimpose on present state
taxes an additional inheritance tax.
I~nheritances are now taxed in thirty
rect and collateral requests and in
thirteen states the tax is in some de-
gree progressive. Wisconsin, Califor-
mia, Idaho, Minnesota and Massachu-
sets have progressive rates for both
direct and collateral heirs. In Illi-
nois, Nebraska, Colorado, South Da-
kota, Oregon and North Carolina the
progressive rates apply only to distant
relatives and strangers in blood, while
In Washington and Texas they apply
to all collateral heirs. In some states
no distinction is made between direct
and collateral heirs. There is a wide
difference among the states both in the
rate of the tax and In the amount of
the exemptions, the rate running from
l to Is per cent and the exemptions
from 800 in Michigan to $4,000 in
North Dakota on collateral heirs and
from $4,000 to $4,000 on direct
heirs. The proposal pending in o
gress exempts everything below $780,
600 for direct heirs, with a $500 ex-
emption for collateral heirs. The ar
gument will be offered with force that
this broad exemption by the national
bill will serve to avoid double inherit
ance tax on requests valued at less
than that amount, most of which are
taxed in the various states. OF the
thirty-six states having an inheritance
tax only ten place the exemption as
high as $4,000, the amour fixed in
the federal bill. The inheritance taxes
paid in the various states 10Y amount
to about $40, OOO,O 900 a zee
The constitutionality Of this form of
taxation has been repeatedly tested in
the courts, the almost universal ruling
being that it's imposing is nothing
more than the exercise of the power
which every state or sovereignty pos
sesses of regulating the manner and
terms upon which property may be
transmitted. Every feature of the law
has been passed upon by the different
courts and the taxing power of the
state or nation has been invariably
affirmed.
The only question at issue over the
inheritance tax is whether the same
source Of revenue should be adopted
by both federal and state governments.
Most students of public finance advo-
cate a complete separation of the
sources Of revenue relied on to support
different governmental jurisdictions
invested with the taxing power. other
wise 1t might become a question
whether one should yield precedence
to the other, should there arise a com
petitive demand between them for
more venue
II goes without saying that the pres
ent proposal for a federal inheritance
tax is a revenue-getting measure and
not prompted by any theory Of re-