fer whether made before or after the passage of this act, provided that property or estates which have vested in such persons or corporations before this act takes effect shall not be subject to the tax.

(5) When any property is transferred by the exercise of the power of appointment.

(6) The tax so imposed shall be upon the clear market value of such property at the rate hereinafter prescribed and only upon the excess of the exemptions hereinafter granted.

Primary Rate of Tax.

SECTION 2. When the property or any beneficial interest therein passes by any such transfer where the amount of the property shall exceed in value the exemption hereinafter specified, and shall not exceed in value $25,000 the tax hereby imposed shall be:

(1) Where the person or persons entitled to any beneficial interest in such property shall be the husband, wife, lineal issue, lineal ancestor of the decedent or any adopted or mutually acknowledged child, at the rate of one per centum of the clear value of such property.

(2) Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister or a descendant of a brother or sister of the decedent, a wife or widow of a son, or the husband of a daughter of the decedent, at the rate of one and one-half per centum of the clear value of such property.

(3) Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister of the father or mother or a descendant of a brother or sister of the father or mother of the decedent, at the rate of three per centum of the clear value of such property.

(4) Where the person or persons entitled to any beneficial interest in such property shall be the brother or sister of the grandfather or grandmother or a descendant of the brother or sister of the grandfather or grandmother of the decedent, at the rate of four per centum of the clear value of such property.

(5) Where the person or persons entitled to any beneficial interest in such property shall be in any other degree of collateral consanguinity than is hereinbefore stated, or shall be a stranger in blood to the decedent, or shall be a body politic or corporate, except religious, charitable or educational corporntions specified in the first section, at the rate of five per centum of the clear value of such property.

Progressive Rate.

The foregoing rates are for convenience termed the primary rates. When the amount of the clear value of such property exceeds $25,000, the rate of tax upon such excess shall be as follows:

(1) Upon all sums in excess of $25,000 and up to the sum of $50,000, one and one-half times the primary rate.

(2) Upon all sums in excess of $50,000 and up to the sum of $100,000, two times the primary rate.

(3) Upon all sums in excess of $100,000 and up to $500,000, two and one-half times the primary rate.

(4) Upon all sums in excess of $500,000, three times the primary rate.

Exemptions.

The following exemptions are allowed:

(1) All property transferred to corporations of this state organized under its law solely for religious, educational or charitable purposes, which shall use the property so transferred exclusively for the purposes of their organization within the state shall be exempt.

(2) Estates of the clear value of $10,000 or less transferred to the widow of the decedent and $2,000 transferred to each of the other persons described in the first subdivision of section 2, shall be exempt.

(3) Estates of the clear value of $500 transferred to each of the persons described in the second subdivision of section 2 shall be exempt.

(4) Estates of the clear value of $250 transferred to persons described in the third subdivision of section 2 shall be exempt. (5) Estates of the clear value of $150 transferred to persons in the fourth subdivision of section 2 shall be exempt.

(6) Estates of the clear value of $100 transferred to persons and corporations described in the fifth subdivision of section 2 shall be exempt.

The classification of persons, exemptions, primary and progressive rates of the tax imposed is shown in the preceding table.

MAIN PROVISIONS OF THE BILL.

The chief provisions of the bill above outlined and illustrated in the table discloses several marked changes from the law of 1899, which should receive attention so that the measure may be fully understood. The first important change that will be observed is that the transmission of both real and personal property is taxed, while the former law included personal property only.

An examination of the inheritance laws of the twenty-seven states in this country, shows that in twenty-four states, real estate descending or transmitted to collateral heirs is taxed;Minnesota, North Carolina and Wisconsin being the exceptions to the rule. In twelve states imposing the tax on estates passing to direct heirs, six tax real and personal property, and six, personalty alone.

England, France, Holland, Germany, several of the cantons of Switzerland, Australia and many other nations collect a succession tax or duty on the devolution of real estate, although the rate may occasionally differ from that on personalty.

Unless the inheritance tax is compensatory of taxes on personalty evaded during life of the predecessor, no logical ground can be found to differentiate land from personal property. The weakness of the back tax theory has been heretofore stated. The position is supported by the opinion of the United States Industrial Commission: "The inequalities of the general property tax as actually adminstered can never be remedied by a tax on inheritances, unless it is made to apply only to property which can be shown to have escaped taxation. The inheritance tax as it is usually found is not proportioned to the extent to which the property tax has been evaded."

The back tax argument is in effect based on the idea that property as such owes a duty to pay taxes. The state has relations with persons who are bound to support it. It has been truly said it is the owner of property on whom such duty rests and it is such person who is under obligation to pay the taxes.

119 Industrial Commission Reports, 1054.