Court Opinion

ID: 9419376
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:49:10.394548+00
Date Added: 2024-06-11T17:19:24.019829
License: Public Domain

Mr. Justice Black
delivered the opinion of the Court.
The United States brought these three actions to recover inheritance taxes imposed by the State of Oklahoma upon the transfer of the estates of three deceased members of the Five Civilized Tribes and paid under protest by the Secretary of the Interior from funds under his control belonging to those estates. The district court entered judgment on the merits for the State in each case. The Circuit Court of Appeals reversed. 131 F. 2d 635. We granted certiorari because of the importance of the cases in the administration of Indian affairs and to the *600State of Oklahoma. The basic questions to be decided are whether, as a matter of state law, the state taxing statutes reach these estates, and whether Congress has taken from the State of Oklahoma the power to levy taxes upon the transfer of all or a part of property and funds of these deceased Indians.
The properties of which the estates are composed fall into four main categories: land exempt from direct taxation; land not exempt from direct taxation; restricted cash and securities held for the Indians by the Secretary of the Interior; and miscellaneous personal properties and insurance. The total value of the three estates was assessed at approximately $1,245,000, of which about 90% represents the value of the cash and securities.1
Initially we are met with the contention that Oklahoma did not intend to tax the estates of the members of the Five Civilized Tribes. We cannot agree with this view. The two controlling statutes broadly provide for a tax upon all transfers made in contemplation of death or intended to take effect after death as well as transfers “by will or the intestate laws of this state.” 2 The language of the statutes does not except either Indians or any other persons from their scope. Efforts of Oklahoma to apply this tax to the estate of a deceased Quapaw Indian were frustrated by this Court's opinion in Childers v. Beaver, 270 U. S. 555, *601decided in 1926. Shortly afterwards the Oklahoma Supreme Court refused to sustain the tax on an Osage estate under the impression that this result was required by the Beaver decision; but, significantly, the Oklahoma court held that the scope of the state law should not be limited “further than the rule therein established.” Childers v. Pope, 119 Okla. 300, 303, 249 P. 726, 729. About 1938, the Oklahoma taxing authorities apparently initiated new efforts to collect an estate tax from Indians. This state action followed our decision in Superintendent v. Commissioner, 295 U. S. 418, in which we held that the restricted income of Indians was subject to the federal income tax, and our decision in Helvering v. Mountain Producers Corp., 303 U. S. 376, which overruled previous decisions limiting the power of the State to impose certain types of taxes on incomes derived from tax-exempt and restricted Indian property. The state tax authorities have with reasonable consistency interpreted their acts as covering estates such as these, and have attempted to enforce the statutes except when they considered enforcement precluded by decisions of this Court. The district court held that the state law does apply to these estates. This interpretation is consistent with that given by the state administrative authorities, with the language of the acts themselves and with the State Supreme Court’s holding in Childers v. Pope, supra.
The respondent’s second and major contention is that the State may not impose an estate tax upon the transfer of the restricted cash and securities because Congress by placing restrictions upon this property manifested a purpose to exempt it from Oklahoma estate taxes. Restricted property of an Indian is that which may not be freely alienated or used by the Indian without the approval of the Secretary of the Interior. We find, upon an examination of both the cases dealing generally with the taxation of Indian property and the statute which imposes the re*602striction, that the restriction, without more, is not the equivalent of a congressional grant of estate tax immunity for the cash and securities.3
The many cases dealing generally with the problem of Indian tax exemptions provide no basis for the Government’s argument that Congress, in view of the existing legal framework, must have assumed that it would immunize the securities and cash from estate taxes by restricting their alienation. Worcester v. Georgia, 6 Pet. 515, held that a State might not regulate the conduct of persons in Indian territory on the theory that the Indian tribes were separate political entities with all the rights of independent status — a condition which has not existed for many years in the State of Oklahoma. The same principle was carried into the tax field in The Kansas Indians, 5 Wall. 737, and for the same reasons. That case also emphasized that the Indians could “not look to Kansas for protection,” 759, and that Kansas was not “obliged to confer any rights on them,” 758. The tax exemption, said the Court, must last until the Indians were “clothed with the rights and bound to all the duties of citizens,” 756. A similar result was reached in The New York Indians, 5 Wall. 761, decided the same day, where the State sought to raise money by taxes to build roads in Indian reservations and where existing treaties forbade the State’s building such roads. Later, for a *603period of time, Indian lands held in trust by the United States were found to be constitutionally tax-exempt on the theory that they were federal instrumentalities, i. e., that the lands were held by the United States for the Indians, and were therefore non-taxable. United States v. Rickert, 188 U. S. 432. In time, this constitutional concept was expanded to grant tax exemption to the income derived from Indian lands, whether tribally or individually owned, even when the privilege of exploitation had been granted to non-Indian lessees.4 The instrumentality concept ultimately resulted in a decision exempting Indian estates from taxation. Childers v. Beaver, supra. None of these cases held, nor has this Court ever decided, that congressional restriction of an Indian’s income carried an implication of estate tax exemption.
The underlying principles on which these decisions are based do not fit the situation of the Oklahoma Indians. Although there are remnants of the form of tribal sovereignty, these Indians have no effective tribal autonomy as in Worcester v. Georgia, supra; and, unlike the Indians involved in The Kansas Indians case, supra, they are actually citizens of the State with little to distinguish them from all other citizens except for their limited property restrictions and their tax exemptions.5 Their lands are held in fee, not in trust, as in the Rickert case, and the doctrine of constitutional immunity from taxation for the income of their holdings on the federal instrumentality theory has been renounced, Helvering v. Mountain Pro*604ducers Corp., 303 U. S. 376. Childers v. Beaver, supra, was in effect overruled by the Mountain Producers decision. The immunity formerly said to rest on constitutional implication cannot now be resurrected in the form of statutory implication.
The cash and securities of which these estates are almost entirely composed were restricted by the Act of January 27,1933.6 Unless the tax immunity is granted by the restriction clause itself, there is not a word in the Act which even remotely suggests that Congress meant to exempt Indians’ cash and securities from Oklahoma’s estate taxes. We conclude that this Act does not exempt the restricted property from taxation for two reasons: (1) the legislative history of the Act refutes the contention that an exemption was intended; and (2) application of the normal rule against tax exemption by statutory implication prevents our reading such an implication into the Act.
The 1933 Act was intended to serve two purposes relevant to this case. One was to continue the restrictions on Indian property for the purpose of protecting the Indians from loss to individuals who might take advantage of them; and the other was to preserve the status of certain *605Indian land as non-taxable until 1956. See the concurring opinion of Mr. Justice Rutledge in Board of Commissioners v. Seber, 318 U. S. 705, 719. This Act was before two Congresses, the 71st and the 72d. It was the subject of exhaustive debate, as well as of several committee reports, and there is no indication whatever in all that discussion of an intention to exempt Indians from estate taxes.7
The bill was sponsored by Oklahoma Congressmen who said nothing which supports the imputation that they intended to deprive their State of this income. It was described by its sponsor, Congressman Hastings, as follows:
“You ask me what the bill does. If the Members of Congress understood the bill there would not be a vote against it. Oil has been struck underneath some of the lands allotted to the members of these tribes. Some of these full-blood allottees without business experience, now have to their credit $100,000, $200,000 and, it is estimated, up to $1,000,000. Suppose one of these Indian allottees died after April 26, 1931. Then this money must be turned over to these heirs without supervision. Do you want to do that? Is there a man on the floor of the House who would want to do that?”8
*606This purpose, and none other, is reiterated throughout the discussion — not a word of an intention to expand tax exemptions was spoken by any Congressman.
The legislative history not only fails to give any affirmative support to such an implication but expressly negatives that intent. The principal clause of the bill dealing with taxation is that which continues a limited land tax-exemption for twenty-five years. On two separate occasions, in two Congresses, the bill’s sponsor assured the House of Representatives: “This [bill] only applies to restricted and tax-exempt land. This does not increase tax-exempt land at all.” 9 Such a bill, carefully drawn so as not to widen tax exemptions for land, and without a word of such intent in its legislative history, cannot be supposed by implication to have prohibited estate taxes. If there could be any doubt of this proposition it is surely removed by a later clause of the 1933 statute which provides that all minerals extracted from the land should be subject to state taxation.10 Congress could not have intended that the minerals themselves should be subject to taxation, but that the proceeds of their sale, even further removed from the land itself, should be immune.
This Court has repeatedly said that tax exemptions are not granted by implication. United States Trust Co. v. Helvering, 307 U. S. 57, 60. It has applied that rule to taxing acts affecting Indians as to all others. As was said of an excise tax on tobacco produced by the Cherokee Indians in 1870, “If the exemption had been intended, it would doubtless have been expressed.” Cherokee Tobacco, 11 Wall. 616, 620. In holding the income tax applicable to Indians, the Court said, “The terms of the 1928 Revenue Act are very broad, and nothing there *607indicates that Indians are to be excepted. ... If exemption exists it must derive plainly from agreements with the Creeks or some Act of Congress dealing with their affairs.” Superintendent v. Commissioner, supra, 420. If Congress intends to prevent the State of Oklahoma from levying a general non-discriminatory estate tax applying alike to all its citizens, it should say so in plain words. Such a conclusion cannot rest on dubious inferences. “Nontaxability and restriction upon alienation are distinct things,” Superintendent v. Commissioner, supra, 421, and when Congress wants to require both nonalienability and nontaxability it can, as it has so often done, say so explicitly.11
It is true that our interpretation of the 1933 statute must be in accord with the generous and protective spirit which the United States properly feels toward its Indian wards, but we cannot assume that Congress will choose to aid the Indians by permanently granting them immunity from taxes which they are as able as other citizens to pay. It runs counter to any traditional concept of the guardian and ward relationship to suppose that a ward should be exempted from taxation by the nature of his status, and the fact that the federal government is the guardian of its Indian ward is no reason, by itself, why a state should be precluded from taxing the estate of the Indian. We have held that the Indians, like all other citizens, must pay federal income taxes. Superintendent v. Commissioner, supra, 421. “Wardship with limited power over his prop*608erty” did not there “without more render [the Indian] immune from the common burden.” A federal court has held, in a well-reasoned decision defended before us by the Solicitor General of the United States, who is not a party to this action, that an Indian’s estate is subject to the federal estate tax. Landman v. Commissioner, 123 E. 2d 787.12 Congress cannot have intended to impose federal income and inheritance taxes on the Indians and at the same time exempt them by implication from similar state taxes.
Congress has passed laws under which Indians have become full-fledged citizens of the State of Oklahoma.13 Ok*609lahoma supplies for them and their children schools, roads, courts, police protection and all the other benefits of an ordered society. Citizens of Oklahoma must pay for these benefits. If some pay less, others must pay more. Since Oklahoma has become a State, it has been authoritatively stated that tax losses resulting from tax immunity of Indians have totalled more than $125,000,000, a sum only slightly less than the bonded indebtedness of the State.14 If Congress intended to relieve these Indians from the burden of a state inheritance tax as a consequence of our national policy toward Indians, there is still no reason why we should imply that it intended the burden to be borne so heavily by one state. But there is a complete absence of any evidence of congressional belief that these exemptions are required on equitable grounds, no matter on which sovereign the burden falls. Here is a tax based solely on ability to pay.15 “Only the same duties are exacted as from our own citizens. The burden must rest *610somewhere. Revenue is indispensable to meet the public necessities. Is it unreasonable that this small portion of it shall rest upon these Indians?” Cherokee Tobacco, supra, p. 621.
Recognizing that equality of privilege and equality of obligation should be inseparable associates, we have recently swept away many of the means of tax favoritism. Graves v. New York ex rel. O’Keefe, 306 U. S. 466, permitted states to impose income taxes upon government employees, and Helvering v. Gerhardt, 304 U. S. 405, permitted the federal government to impose taxes on state employees. O’Malley v. Woodrough, 307 U. S. 277, overruled a previous decision which held that judges should not pay taxes just as other citizens, and Helvering v. Mountain Producers Corp., supra, repudiated former decisions seriously limiting state and federal power to tax. See also Metcalf & Eddy v. Mitchell, 269 U. S. 514, and James v. Dravo Contracting Co., 302 U. S. 134. The trend of these cases should not now be reversed.
What has been said requires the conclusion that the cash and securities are not exempted by any existing legislation from state estate taxation, and this is likewise true of the personal property in two of these estates.
The validity of the taxes on the transfer of the land presents a somewhat different problem. Some of these lands are exempt from direct taxation by virtue of explicit congressional command. The Act of May 10, 1928, 45 Stat. 495, for example, provides that Indians of a class which includes the three deceased should select up to 160 acres of his allotted, inherited or devised restricted lands, which “shall remain exempt from taxation while the title remains in the Indian designated ... or in any full-blood Indian heir or devisee,” while all other restricted lands are made subject to taxation by Oklahoma. The State argues that congressional exemption of the land *611from direct state taxation does not exempt the land from an estate tax, because of the principles announced in United States Trust Co. v. Helvering, supra. A majority of the Court concludes that this principle does not apply to Indian lands specifically exempted from direct taxation. We therefore hold that the transfer of those lands which Congress has exempted from direct taxation by the State are also exempted from estate taxes.
To summarize:
In No. 623, the transfer of the cash and securities is taxable, the transfer of the homestead and other allotted land, exempted under the Act of May 10, 1928, is not. The 43 acres purchased for the intestate from her restricted funds was taxable at the time of her death, Shaw v. Gibson-Zahniser Oil Corp., 276 U. S. 575, and hence is subject to the estate tax.
In No. 624, the transfer of the cash and securities and the personal property is taxable. The deceased died before the Act of May 10,1928, took effect, but her 240-acre holding was specifically exempt from direct taxation at the time of her death under § 19 of the Act of April 26, 1906, and the transfer of lands is therefore not taxable.
In No. 625, the same result as in No. 623 follows for the restricted lands which were appropriately selected for exemption under the Act of May 10, 1928, and for the personal property, cash, and securities. The judgment and the insurance policy are to be treated as in a class with the personal property, cash, and securities. It is conceded that the 160 acres of inherited property held by the deceased was taxable at the time of his death because in excess of the exemption permitted by the 1928 Act, and this land is, therefore, subject to the estate tax. While the status of the deceased’s four-fifths interest in a 40-acre tract is not clear from the record, no showing has been made that it is not taxable.
*612The Government is entitled to recovery of the estate tax paid on the transfer of lands exempt from direct taxation, and to no more. The judgment below is vacated and the cause is remanded to the district court for further proceedings consistent with this opinion.

It is so ordered.

Me. Justice Douglas :
I concur in the result and in the disposition of the case. While I agree that transfers of the restricted Indian lands are not subject to Oklahoma’s estate tax, I take the contrary view as respects the funds and securities covered by the Act of January 27, 1933, 47 Stat. 777. In my opinion transfers of those funds and securities are subject to the tax for the two reasons set forth in the opinion of the Court.

 The taxes assessed on this property totalled approximately $37,000. The properties of which the estates were composed was as follows:
No. 623: Approximately 70 acres of restricted allotted land; 40 acres of land purchased from restricted funds; restricted cash and securities. Assessed value: $250,000.
No. 624: 240 acres of restricted allotted land; personal property; restricted cash and securities. Assessed value: $677,000.
No. 625: 160 acres of allotted restricted land; 160 acres of inherited restricted land; a four-fifths interest in 40 acres; an automobile; miscellaneous property, and insurance; restricted cash and securities. Assessed value: $318,000.

 Ch. 162, Sess. Laws, 1915: Ch. 66, Art. 5, Sess. Laws. 1935.

 It is unnecessary to consider the State’s argument that Congress is without power to exempt these estates from taxation. This issue is not foreclosed by Board of Commissioners v. Seber, 318 U. S. 705, since there we decided no more than that Congress might authorize the exemption of certain Indian lands from taxation because of an historic policy in respect to those lands. Cf. McCurdy v. United States, 246 U.S. 263, 269.
Choate v. Trapp, 224 U. S. 665, holding that under certain circumstances the United States could not withdraw a tax exemption once assured, has no bearing on the instant problem since it is conceded that the question here is entirely one of what Congress has in fact directed.

 Choctaw, O. & G. R. Co. v. Harrison, 235 U. S. 292; Indian Territory Oil Co. v. Oklahoma, 240 U. S. 522; Jaybird Mining Co. v. Weir, 271 U. S. 609; Howard v. Gypsy Oil Co., 247 U. S. 503; Large Oil Co. v. Howard, 248 U. S. 549; Gillespie v. Oklahoma, 257 U. S. 501.

 Under the Acts of June 18, 1934, 48 Stat. 984, and June 26, 1936, 49 Stat. 1967, 25 U. S. C. § 501 et seq., some progress has been made in the restoration of tribal government. Cohen, Handbook of Federal Indian Law, 455, 129-133, 142-143.

 47 Stat. 777.
“. . . That all funds and other securities now held by or which may hereafter come under the supervision of the Secretary of the Interior, belonging to and only so long as belonging to Indians of the Five Civilized Tribes in Oklahoma of one-half or more Indian blood, enrolled or unenrolled, are hereby declared to be restricted . . . Provided, That where the entire interest in any tract of restricted and tax-exempt land belonging to members of the Five Civilized Tribes is acquired by inheritance, devise, gift, or purchase, with restricted funds, by or for restricted Indians, such lands shall remain restricted and tax-exempt during the life of and as long as held by such restricted Indians, but not longer than April 26, 1956, . .. . And provided further, That all minerals including oil and gas, produced from said land so acquired shall be subject to all State and Federal taxes as provided in section 3 of the Act approved May 10, 1928 (45 Stat. L. 495).”

 Elements of the 1933 statute were included in H. R. 15603, 71st Congress. The bill was recommitted to the Committee on Indian Affairs for further consideration, 74 Cong. Rec. 3956-3958. This discussion includes a report of the Department of the Interior recommending legislation substantially similar to that finally enacted in 1933. The House later amended the provisions of its own bill into S. 6169. 74 Cong. Rec. 7219-7222. The bill as amended was 'not approved by the Senate. The plan was re-introduced in the 72d Congress as H. R. 8750 and was discussed by the House at 75 Cong. Rec. 8163-8170, and by the Senate at 76 Cong. Rec. 2200. This bill was passed by the 72d Congress and became the statute under consideration.

 75 Cong. Rec. 8163.

 74 Cong. Rec. 7222 and, similarly, 75 Cong. Rec. 8170.

 See the last clause of the statute as set forth in Note 6, supra.

 See, for examples, Act of July 1, 1898, 30 Stat. 567, tract made “inalienable and nontaxable”; Act of March 1, 1901, 31 Stat. 861, tract made “nontaxable and inalienable”; Act of June 30, 1902, 32 Stat. 500, tract to remain “nontaxable, inalienable, and free from any incumbrance”; Act of April 26, 1906, 34 Stat. 137, “all lands upon which restrictions are removed shall be subject to taxation, and the other lands shall be exempt from taxation.” Cf. for special treatment of the Quapaw Indians the Act of April 17, 1937, 50 Stat. 68.

 Cert. den., 315 U. S. 810. The Department of the Interior in the Landman ease made substantially the same argument it makes here against taxation of Indians’ estates. It emphasizes that the decision of the Circuit Court of Appeals would lead to similar taxation by states. The Solicitor General, opposing the Department of Interior in the Landman case, insisted that under Superintendent v. Commissioner, 295 U. S. 418, and Chotean v. Burnet, 283 U. S. 691, the Indians’ estates should be subjected to taxation; and that even if the Indians’ lands were exempt from direct taxation, the estate tax should be upheld as an excise tax, indirect in its nature, citing United States Trust Co. v. Helvering, 307 U. S. 57; Plummer v. Coler, 178 U. S. 115; Greiner v. Lewellyn, 258 U. S. 384. In other words, the Solicitor General in seeking to uphold the validity of a federal estate tax as applied to Indian estates opposed the argument which the Department of the Interior made then and which it makes now, the only difference being that in the instant case the Department of the Interior is seeking to invalidate a state instead of a federal tax.

 It must not be assumed that the Oklahoma Indians are all unable to pay estate taxes. The estates of the three Indians here involved, as has been noted, total well over $1,200,000. Oil and gas receipts of the Five Civilized Tribes from 1904 to 1937 were in excess of one hundred million dollars. Hearing on S. Res. 168, Senate Committee on Indian Affairs, 75th Cong., 3d Sess., p. 36. The Osages in the same period received $261,000,000. p. 34. Annual per capita income for the Osage Tribe as shown by a careful study made in 1928 was $19,119. The Problem of Indian Administration, Institute for Government Research, Lewis Meriam, Director, chapter 10, General Economic Condi*609tions, 430,450. 2,826 Osage Indians are reported to own tribal and individual property valued at $31,968,000. p.. 443. The economic status of the Osages is discussed in McCurdy v. United States, 246 U. S. 263, 265.
For a discussion of the respected position of Indians in Oklahoma, see the dissenting opinion of Judge Williams, Board of Commissioners v. Seber, 130 F. 2d 663, 681-683. The 1933 Act discussed above was sponsored in the House of Representatives by Congressman Hastings of Oklahoma, who was himself of Indian descent.

 Hearings before the Senate Committee on Indian Affairs, note 13, supra, p. 4.

 “The view of the survey staff is that the Indians must be educated to pay taxes just as they must be educated to do other things. The taxes imposed upon them must always be properly related to their capacity to pay. For them an income tax would be infinitely better than a general property tax because of its direct relationship to their capacity to pay. The returns from such a tax would obviously be extremely small at the outset, but they would increase with the increasing productivity of the Indians.” The Problem of Indian Administration, note 13, supra, 478; and see also 43, 98.