Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-05-26
THE INCOME TAX.
XVIII inheritance Taxes.
By Frederic ]. Haskin.

When the income tax law of 1894 was
passed it contained provision which
made il something else besides what 1t
purported to be-a national inheritance
tax law 1t provided that a tax OF :
4 per cent should be assessed upon all IN
heritances and gifts received during the
year. 1t applied only to personal prop
erty. ii is true. and ii is said that the
exemption of real property was made be-
cause Of feeling that the landowners
already bore their fair share of the
Il country's taxes.
i How nearly the American people came
Ia getting a full fedged Inheritance tax
law in 1909 will never be known. but 1t IS
/ known that some heroic work was done
to induce President Taft 10 give up the
4 idea and To take up the corporation tax
/ instead Ii will he remembered that when
| the constitutionality of the inheritance
/ tax provision of the law of 1894 was at
i tackled in the case of knowlton against
i Moore The Supreme Court declared an
/ inheritance tax to be constitutional with
! out superintendent. When President
| Roosevelt was still in office and saw the
| revenues of the government steadily fali-
| ing below the expenditures he cast about
/ for a vehicle through which to replenish
/ the Treasury, and he hit upon the in
| heritance tax with a graduated rate that
| would take a small toll from the small
| inheritance and a heavy one from the
| swollen fortune as il would pass from
| one to another by Inheritance
| When Mr.. Taft became the nominee OF
| his party for the presidency he did not
| accept the Roosevelt idea at the outset
Rather, in his speech OF acceptance, ne
| came out with the statement that he
| believed that a constitutional income tax
law could be enacted. leaving the genesA
| impression that he would be i'll favor OF
| such a law However, when he came TO
write his inaugural address he reached
a different conclusion, this time holding
| that il would be most unfortunate TO pass
such law in the face of the decision OF
the Supreme Court in 1885, the effect OIL
which he thought. would be to under
mine the public faith in the nation s
highest tribunal which would either
have to reverse itself in whole or IN part
or else stand by its own reversal or d
hundred wears of Interpretation. mere
fore. he recommended the enactment OF
an inheritance tax. His recommendation
did not arouse the general support ioI
the proposition that he had hoped ana
finally it became evident that the IN
heritance tax sentiment was not as
strong as the sentiment in favor OF an
income tax It was then that he gave
up his advocacy of an inheritance laH
and came out for corporation tax anu
a constitutional amendment making Ger
tain the constitutionality of income taxa
ton.
There seems TO be general feeling In
the United States that the national ana
local taxes ought
States Claim to be raised Who'll
~ and distinctly
Inheritance Tax. from different
sources. and the inheritance tax seems to
be one that the states themselves have
felt they could levy with success and
constitute domain which the federal
government ought not invade.
The inheritance tax is by no means
new engine of government finance Be
fore the star of the east had shone over
the hills of Judea the Romans were using
it as a means of filling their public treas
ures and keeping their leg1ons IN the
field There is evidence that even back
farther than the Romans the Egypuans
used ii as source of public revenue.
From those times forward 1T has been
utilized more and more widely until to-
day 1t is employed either locally or ma
tionally by nearly all of the nations OF
the civilized world.
/ ITS friends laud il in glowing terms.
They say that no other tax is easier to
defend or has in 1T more TO commend.
Pointing out that ii does not touch pri-
er, they assert that it thus places no tax
upon business activities. The simplicity
Of it's administration, its freedom from
placing burdens on the poor. the lmpos-
s.bility of it's being shifted, all commend
it to it's friends.
Under one name or another 1t exists In
the Australasian states, in Great Britain,
France. Germany, Switzerland. Holland,
Belgium. Sweden. Norway, DENMARK;
Austria Hungary. Italy and nearly all
other European countries. In the United
States less than ten of the states have
failed to enact inheritance tax laws. In
many of them there is graduated tax
which permits small estates 10 be eA-
empted. moderate ones to be taxed light
" and big ones to be required 70 pay
heavy taxes to the government.
Perhaps no other state in the Union has
had such trouble to get an inheritance
tax law upon it's statute books to stay
as Minnesota. 1t enacted its first law IN
1855, in the shape of probate lee whose
size should increase with the size OF the
estate to be probated This law was de-
cIared unconstitutional. In 1897 another
law was passed. and 1t likewise, was de-
clared contrary to the constitution. In
that it exempted real estate, did not APP
ply to certain corporations, prescribed
higher exemption TO lineal than to col
lateral heirs and on other grounds. a
third law was passed in 1901, and IL
likewise Disseminated in favor OF linear
heirs and was declared unconstitutional
Nothing daunted. the legislature pdSSeu
another law in 1902. fixing the rate at
10 per cent and this was declared UNI
constitutional also the ground being
that an amendment to the constitution
i'm 1891 legalizing the inheritance tax
idea provided that the maximum rate
should he ! per cent. The fifth attempt
at making constitutional inheritance
tax resulted better-the Illinois statute
was borrowed and incorporated in the
state laws.
=
This tax law exempts inheritances up
TO $4,000. and adopts a graduated scale
above that For any
Sliding Scale excess over the ex-
of Exemptions. ono rho ra,s i -.