There can rate per cent must be the same on all estates. be no discrimination in favor of rich or poor. All stand on an equality under the provisions of the constitution, and it is this equality that is the pride and safeguard of us all. The State finds no warrant in its constitution for saying that it will make a greater rate of charge for the privilege of succeeding to large estates than to smaller ones, but on the contrary this is expressly prohibited by the requirement that laws shall be for the equal protection and benefit of the people." But in a later case 2 the same court held that discrimination between kindred of different degrees of relationship in the imposition of an inheritance tax was not unconstitutional. The court said: "Since the right to receive property by inheritance is not guaranteed by the constitution, it prescribes no limitation upon the power of the general assembly to designate the persons who may thus receive. The discrimnation is based upon and justified by the fact that there are degrees in collateral kinship." In Minnesota, the tax upon inheritances was given the form of progressive probate fees; all estates under $2,000 being exempt, and in other cases the fees were arbitrarily graduated according to the inventoried value of the estate. The act was declared to be unconstitutional, because it imposed an unequal tax and established the principle of a sale of justice, which is not countenanced by the constitution.3 The New Hampshire case is probably the only case which can be properly considered as being squarely in opposition to the constitutionality of a progressive or discriminating inheritance tax. ize each other and leave the settled by a third decision. The two Ohio cases neutralquestion to be ultimately The Minnesota law is clearly 1 State v. Ferris, 53 Ohio St. 314, 336. unconstitutional, as it provides for the imposition of a tax upon the estate and not upon the right of succession. The overwhelming judicial opinion in this country does not consider the inheritance tax as a tax in the constitutional sense, which is required to be levied equally upon all persons, whether they are nearly or remotely related to the deceased; and at the same rate per centum, whether the inheritance be large or small. The inheritance tax is held to be only a curtailment of a statutory privilege or franchise; or, as the Supreme Court of Pennsylvania expressed it," as a bonus, exacted from the collateral kindred and others, as the condition on which they may be admitted to take the estate left by a deceased relative or testator." 1 In the case of In re McPherson 2 Mr. Justice Earl in delivering the opinion of the court, held it to be unnecessary to decide whether the tax was a tax upon property or upon the succession or transfer of an inheritance to the heirs and beneficiaries. But in a number of succeeding cases, the New York Court of Appeals have decisively held the tax to be imposed upon the succession or transfer and not upon the property of the decedent's estate. In the Hamilton case, the court said: "The statute does not provide for a tax upon property in the sense that such enactments are generally understood, but upon the right of succession under a will, or in case of intestacy. The right of succession to property upon the death of the owner rests upon some positive law, and it is competent for the law-making power, when conferring the right to annex to it such burdens or conditions as the public interest may require. Hence the statute has provided that certain beneficiaries 1 Strode v. Commonwealth, 52 Pa. St. 182. 2 104 N. Y. 318. 3 8 Matter of Swift, 137 N. Y. 77; Matter of Merriam, 141 N. Y. 479, 485; Matter of Curtis, 142 N. Y. 219, 223; Matter of Hoffman, 143 N. Y. 327, 330; Matter of Hamilton, 148 N. Y. 313; Matter of Bronson, 150 N. Y. 1, 6, 16. under a will, and certain of the next of kin in case of intestacy, shall take subject to certain deductions from the bequest or distributive share, which is to be paid into the public treasury for the public use, and for convenience it is called a tax." In California in a recent case 1 where certain small estates, and the property which goes to certain near relatives mentioned in the statute, are exempted from the payment of the tax, the court held the tax to be a burden or condition im. posed upon the right of succession, and only a regulation of the descent of property. It, therefore, did not come within the constitutional requirement that property shall be taxed according to its value. The same conclusion was reached by the Supreme Courts of Colorado, Montana and Illinois, in which States the statutes provided for the progressive taxation of inheritances, as well as for the discrimination in the rate against collateral kindred and stranger beneficiaries. The Illinois court said: "The laws of descent and devise being the creation of the statute law, the power which creates may regulate and may impose conditions or burdens upon a right of succession to the ownership of property to which there has ceased to be an owner because of death, and the ownership of which the State then provides for by the law of descent or devise. The imposition of such a condition or burden is not a tax upon the property itself, but on the right of succession thereto." The court further stated that the only constitutional requirement which need be observed in the levying of a tax upon inheritance is that it must be levied uniformly and equally upon all individuals who come within a particular class of heirs and beneficiaries, whether the classification be according to the value of the inheritance or according to degrees of relationship, or according to both. The constitution 1 In re Wilmerding's Estate, 117 Cal. 281. In re House Bill No. 122, 23 Colo. 492; Gelsthorpe v. Furnell, 20 Mont. 299; Kochersperger v. Drake, 167 Ill. 122. ality of the Illinois statute was attacked in the Supreme Court of the United States on the ground that it violated the Federal constitutional requirement of the equal protection of the laws. The court sustained the statute, and held the progressive features to be reasonable classifications of the right of succession, although Mr. Justice McKenna intimated that some classification might be made in the imposition of the inheritance tax, which might be unreasonable and deny to persons the equal protection of the laws.1 Mr. Justice McKenna quoted with approval from an opinion of Chief Justice Taney, in Mager v. Grimes,2 sustaining the constitutionality of a statute in Louisiana, which imposed a tax of ten per cent upon legacies, when the legatee was neither a citizen nor a resident of the United States. Chief Justice Taney said: "Now the law in question is nothing more than an exercise of the power, which every State and sovereignty possesses, of regulating the manner and terms upon which property, real and personal, within its dominion may be transmitted by last will and testament or by inheritance; and of prescribing who shall, and who shall not be capable of taking it. Every State or nation may unquestionably refuse to allow an alien to take either real or personal property situated within its limits, either as heir or legatee, and may, if it thinks proper, direct that property so descending or bequeathed shall belong to the State. In many of the States of this Union at this day, real property devised to an alien is liable to escheat. And if a State may deny the privilege altogether, it follows that, when it grants it, it may annex to the grant any conditions which it supposes to be required by its interest or policy." The judicial expression, which best confirms the practical soundness of this philosophical exposition of the limit 1 Magoun v. Illinois Trust & Savings Bank, 170 U. S. 288. 28 How. 490, 493. ations of the natural right of property, is to be found in the opinion of Mr. Justice Brown, in United States v. Perkins, in which the New York Inheritance Tax Law was sustained. Mr. Justice Brown said: "While the laws of all civilized States recognize in every citizen the absolute right to his own earnings and to the enjoyment of his own property, and the increase thereof, during his life, except so far as the State may require him to contribute his share for public expenses, the right to dispose of property by will has always been considered purely a creature of statute and within legislative control. • Though the general consent of the most enlightened nations has, from the earliest historical period, recognized a natural right in children to inherit the property of their parents, we know of no legal principle to prevent the legislature from taking away or limiting the right of testamentary disposition, or imposing such conditions upon its exercise as it may deem conducive to the public good." The conclusion, therefore, is that all State laws, providing for the taxation of the right of succession to the estate of a decedent, are constitutional, it matters not how wide a departure there may be in the imposition of the tax from the constitutional requirement of uniformity and equality in the levy of taxes in general. But it seems to me very clear that, in order that the inheritance tax may be treated as a tax upon the succession instead of an ordinary tax upon the property of the decedent, the law imposing it should make such intention plain by directly imposing the tax upon the beneficiaries instead of upon the decedent's estate. Two courts, the Supreme Courts of Wisconsin and Missouri, have held the inheritance tax laws of their respective States to be unconstitutional, because, being laid upon the estate of the decedent in the aggregate, it could be construed only as an ordinary tax upon the prop 1 163 U. S. 625. 627. |