El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-24

~ q
w When the, income tax law of
1894 was passed it contained
a provision which made it something
else besides what it purported TO be
national Inheritance tax law. IL
provided that q tax Of TWO percent
should be assessed upon all inheritaEces
ana SlLLs received during the year. 1T
applied only TO persona property, il
IS true and IL is said that the eN-
empuon of real property was made
because OF feeling that the land own
ers pore their fair share OF the Coun-
try's taxes.
How nearly the American people
came 70 getting a full fedged inheri-
lance tax law in 1903 viii never be
known but IL is known that some heroic
EOrk was done 70 Induce president Taft
70 give up the idea and 70 take up the
corporation TAX instead. IL VIII be re-
memDered that when the constitution
alllE OF the Inheritance tax prOVisl on
OF the law of 189# was attacked in the
case OF hnOW4i on against Moore, the
supreme court declared an Inheritance
tax to be constitutional without appOr-
uOnmenL When president Roosevelt
was sun IN OIrce and saw the revenues
OF the government steadily falling De
low the expenditures, he cast about for
r. vehicle through which TO repienish
the treasury, and he hit upon the in
nerltance tax with a graduated rate
that would take a small toll from the
small inheritance and heavy one
from the swollen fortune as II would
pass from one TO another by inheri-
lance
Taft Rejects Income Tax.
When Lr. 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 accept
ance, he came out with the statement
that ne believed that a constitutional
income tax law could be enacted. leaV-
ing the general impression that he
would favor such a law However.
when he came to write his inaugural
address he reached a different cOnClus-
ion. this time holding that IL would be
most unfortunate 10 pass such law In
TIE face Of the decision OF the supreme
court in 1885 the effect Of which, he
thought. would be TO nCermine the
public faith in the nations highest tri-
bunal. which would either nave 70 re-
verse itself in whole or in part, or
else stand by its own reversal OF 100
years OF Interpretation. Therefore, he
recommended the enactment of an in
heritance tax His recommendation did
not arouse the general support for the
proposition that he had hoped. and
finally IL became evident that the IN
heritance tax sentiment was not as
strong as the sentiment IN favor OF an
income tax 1t was then that he gave
I'D his advocacy Of an inheritance tax
and came out for q corporation tax and
a constitutional amendment making
certain the cOnsutuuOnality Of income
An OId Engine of Government.
The inheritance tax is by.nC means a
new engine OF government finance Be
the hills of Judea the Romans were
using it as a means Of filling their pub
lie treasures and keeping their !eglons
in the field There IS evidence mat
even back further than the Romans the
Egyptians used 1t as source ~ pub
lie revenue From those times forward
il has been utilized more and more
widely until today II IS employed eth
er locally or nationally by nearly all Cf
the nations of the civilized world
Its friends laud il in glowing terms
to defend OF has in il more 20 com
mend Pointing out that 1t does not
IeuCn pI-Nats PLoPel-s -loL -iS ne - -
OF the owner they assert LnaL II mus
places no tax upon business activities.
The simplicity of its Administered ton, its
freedom from placing burdens on the
poor, the impOSsibillty Of It's being
shifted, all commend il TO its friends
Under one name or another II 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 10 Of the
states have failed to enact Inheritance
tax laws In many Of them there is a
graduated tax, which permits small es-
uareS 10 he exempted moderate ones 10
be taxed lightly, and big ones to be re-
quired to pay heavy taxes TO the gov
eminent
Exempt Inheritanees Under $4,000.
Minnesota and Illinois tax laws eZ-
empt inherltances up to $4,000 and
adopt a graduated scale above that
For any excess over the exemption up
10 $4,000 the rate is II percent Up
TO 500 900 it becomes two percent, and
above 100000 IL is five percent In
1906 the constitution was again amend
ed, ana In 1903 another act passed the
legislature fixing sliding scale Of eX-
emDuOnS starting with $4,000 Tor the
wife and going down TO 500 for dis
tanr relatives. and those who were no
kin 1t also provided a sliding scale Of
tax rates beginning at one percent IN
the case Of the widows with an inherit
Iance ROT exceeding Sl5.CUO and rising
to 10 percent in the case Of q distant
relation or no relation where the estate
exceeds 100000. The governor vetoed
the law, although 1t conforms gener-
ally TO the Wisconsin law. and to the
laws OF California and Idaho.
The laws Of these states exempt So
600 in the case OF a widow, $1,000 IN the
case Of a child or husband and on OdWn
TO 500 for remote kin and strangers
The rate on the excess over the OK
husband. wife or child, and rises TO
three percent where the estate exceeds
$500, 600. In the case Of distant rela-
LlVes and strangers, 1t begins at five
percent and climbs as high as 10 per
It is said that the highest inheri-
lance tax rate ia the United States is
to be found in New York, where q law
was enacted In 1870 with the approval
of governor Hughes The rate goes as
high as IS percent on estates Of over
$1,000 900 left uG any more distant re-
lation than brother or sister, or the wife
or widow Of a son or the husband Of
q daughter
England has an inheritance tax in
the shape of what is known as death
duties. During a 10 year period they
yielded S80.O00.00O q year, the properly
passing under them having been valued
at upward Of s11,OOO0OO, 900. Expert
enCe has shown in England that estates
pass on an average once in 80 years
il is the view of the English authorities
that the death duties are pra ctiCalIy
a form of super tax on big estates. and
that they help TO carry out the general
plan OF graduating taxes to the ability
of the taxpayers to meet them.
Tt is thought to be improbable that
congress viii include any 1aX Oh in
herirances in the proposed income tax
law Most OF the leaders feel that in
the end 1t would amount 20 a sort Of
double taxation and that at any rate
the states have near y all adopted in
heritance tax laws, which would make
a national Inheritance tax law interfere
with state fiscal problems IN an uns8i-
isfactOry way But whether congress
shall include such a tax or not. either
upou personal property or upCn real
property, or upon bOtn. The fact re-
mains that the taxing tendency Of the
leading nations is i'm the direction. Of
using the inheritance tax rs a rrsrhCd
Of enriching the public treasury!