"The lien is merely an appropriate regulation to secure the collection of the exaction." Per Clifford, J., in Scholey v. Rew, 90 U. S. (23 Wall.) 331, 347, 23 L. R. A. 99. Contra, In re Bittinger, 129 Pa. St. 338. "Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 269, 39 L. R. A. 170. The court relies upon State v. Hamlin, 86 Me. 495, 30 A. 76, 41 Am. St. Rep. 569, 25 L. R. A. 632, and on State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, where the statutes also on their face were upon the "property," and although it provides that administrators, executors and trustees shall be liable for all such taxes. Humphreys v. State, 70 Ohio St. 67, 84, 101 Am. St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming 13 Low. D. 168, 1 C. C. N. S. 1, 14 Cur. D. 238. Sec. 10. Right to Receive rather than Right to Transmit is Taxed. It is the better view that the inheritance tax is laid on the right or privilege of receiving property rather than on that of transmitting,' although it has been held also a tax on the right of transmission, or on the transmission itself, and the question will depend on the language of the particular statute.* 1 In re Kennedy, 157 Cal. 517, 108 P. 280. In re Macky, 45 Colo. 316, 102 P. 1075. In re Speed, 216 Ill. 23, 27, 74 N. E. 809, 108 Am. St. Rep. 189; affirmed 203 U. S. 553, State v. Vinsonhaler, 74 Neb. 675, 105 N. W. 472. Pullen v. Commissioners, 66 N. C. 361. State v. Ferris, 53 Ohio St. 314, 325, 41 N. E. 579, 30 L. R. A. 218. Humphreys v. State, 70 Ohio St. 67, 84, 101 Am. St. 888, 70 N. E. 957, 65 L. R. A. 776, affirming 13 Low. D. 168, C. C. N. S. 1; 14 Cir. D. 238. Eury v. State, 72 Ohio St. 448, 74 N. E. 650. State v. Alston, 94 Tenn. 674, 30 S. W. 750, 28 L. R. A. 178. Knox v. Emerson, 123 Tenn. 409, 131 S. W. 972. In re Joyslin, 76 Vt. 88, 56 A. 281. Black v. State, 113 Wis. 205, 217, 89 N. W. 522, 90 Am. St. Rep. 853. State v. Bullen, 143 Wis. 512, 518, 128 N. W. 109. The most exact rule is that which regards the inheritance tax as upon the right to receive property rather than the right to dispose of it. "Properly understood, it is not the right to transmit, but the right and privilege to receive, that is taxed. The right to dispose of property during the lifetime of the owner cannot be separated from the property itself, and therefore to tax the right of disposal by contract in the lifetime of the owner, even though it take effect at his death, is to tax the property itself. But the right to dispose of the property by will or descent, taking effect after the death of the owner, is not so closely connected with the right of property, and it is not clear that such right may not be taxed. But, when the right to receive the property is considered, it is clear that the right is distinct and separate from the property itself, and the state may tax this right to receive property; and this is so whether the property is disposed of by the owner during his lifetime, or at his death. This right to receive property is under the control of the legislature, and it has the power to regulate and lay such burdens thereon as it may see fit, within the provisions of the constitution. To regulate by taxation or otherwise the privilege or right to receive property is not in conflict with the first section of the bill of rights, which recognizes the inalienable right of acquiring, possessing, and protecting property. Were it otherwise, all our laws as to wills, descent, distribution, and conveyances would be unconstitutional." Per Burkett, J., in State v. Ferris, 53 Ohio St. 314, 41 N. E. 579, approved in Gelsthorpe v. Furnell, 20 Mont. 299, 51 P. 267, 39 L. R. A. 170. 2 State Street Trust Co. v. Stevens, 209 Mass. 373, 95 N. E. 851. "This is an excise tax, imposed, not only upon the right of the owner of property to transmit it after his death, but also upon the privilege of his beneficiaries to succeed to the property thus dealt with," Att. Gen. v. Stone, 209 Mass. 186, 95 N. E. 395. 3 In re McKennan, 25 S. Dak. 369, 126 N. W. 611, 614, reversed on rehearing, 130 N. W. 33. The court after considering ancient and modern death duties concludes as follows: "Although different modes of assessing such duties prevail, and although they have different accidental names, such as probate duties, stamp duties, taxes on the transaction, or the act of passing of an estate or a succession, legacy taxes, estate taxes or privilege taxes, nevertheless tax laws of this nature in all countries rest in their essence upon the principle that death is the generating source from which the particular taxing power takes its being and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested." Knowlton v. Moore, 178 U. S. 41, 56, 20 S. Ct. 747, 44 L. Ed. 969. 4 Minot v. Winthrop, 162 Mass. 113. Sec. 11. Not a Penalty or Forfeiture. The tax is in the nature of an assessment and is not a penalty,' or a forfeiture.2 1 Strode v. Conn., 52 Pa. St. 181. 2 Arnaud v. Arnaud, 3 La. Ann. 337. Carpenter v. Pennsylvania, 17 How. (U. S.) 456, 462. Sec. 12. Privilege Taxed as a "Commodity." The privilege of transmitting or receiving by will or descent property on the death of the owner is a "commodity" within the meaning of this word in the Massachusetts constitution, and an excise may be laid upon it. Minot v. Winthrop, 162 Mass. 113, 122 (Lathrop, J., dissenting), 26 L. R. A. 259. CHAPTER III. THE INHERITANCE TAX IN POLITICAL § 13. Economically Sound. § 14. Arguments in Favor of and Against Tax. Sec. 13. Economically Sound. Firmly entrenched in a long and honorable history, with the endorsement of the leading economists of ancient and modern times, and approved by the present practice of most civilized governments, he would be indeed brave who should attempt to attack the theory or validity of any sane inheritance tax from an economic standpoint. See In re Morris, 138 N. C. 259, 50 S. E. 682. A very learned discussion of the economic theory of the inheritance taxes may be found in the monograph on the inheritance tax by Max West, published in 1908, on pages 189, et seq. Mr. West notes that the inheritance tax has received the approbation of political economists from a very early day down to recent times. It was advocated by Pliny the younger, and by Adam Smith (Wealth of Nations, bk. V, chap. II, pt. II), although Smith pointed out the inequality of the taxes caused by the fact that the frequency of transference was not always equal in property of equal value. Mr. West notes the objection of Ricardo (Principles of Political Economy and Taxation, chap. VIII), whose views were criticised by McCulloch. Jeremy Bentham was a strong advocate of the inheritance tax. John Stuart Mill (Principles of Political Economy, bk. V, chap. XI, s. 3), advocated not only progressive inheritance taxes but the abolition of collateral inheritance and a limitation of the amount which any one should be allowed to take either by inheritance or bequest. Mr. West, on pages 195 and 196, cites many political writers on inheritance taxes. From an economic standpoint no tax has more to commend it and none is easier to defend As has been well said: "This method of increasing the public revenue is wise, simple, and effective — wise because it does not touch private property during the life of the owner and thus places no burden upon business activity; simple because the tax is easily ascertained and collected while estates are being administered in the probate court; effective because by the application of progressive rates, it adds no burden to the poor, but permits those who have much to contribute to the government somewhat in proportion to their ability to pay. It invades no natural rights. It violates no maxim of the law. It overleaps no constitutional barriers. It is neither revolutionary nor socialistic, but is, on the contrary, a measure of practical wisdom and social justice, and has been truly styled an 'institution of democracy.' Another desirable feature of the inheritance tax is the fact that it cannot be shifted. (Report of Minnesota Tax Commission, 1910.) How often Property becomes Subject to Tax. In the learned treatise on the inheritance tax by Max West, pages 228, et seq., he points out that the length of a generation is from thirty-three to thirty-six years and that one thirtythird to one thirty-sixth of the private wealth of a country will change hands annually by inheritance, bequest, or gifts causa mortis, aside from the exemptions. It has been calculated that in Massachusetts one-ninth of the tax will be eliminated by an exemption of five thousand dollars or one-fifth by an exemption of ten thousand dollars, and that at least one-fiftieth of the private wealth of a state should annually become subject to inheritance taxes, even if the ten thousand dollar exemption applied to all estate in New York and Massachusetts. Sec. 14. Arguments in Favor of and Against the Tax. The most common arguments against the tax are that it bears on those least able to afford it, and that it is harsh and unequal in one form or another.1 No defense can well be made of confiscation, as practiced in Oklahoma and in the New York act of 1910, or of the double taxation which most of our statutes impose on non-residents, but to a fair, reasonable law with liberal exemptions there can be no objection. There is much to be said in favor of the tax. It is certain and economical in collection, it bears usually on the wealthy, who are best able to pay it, and as it never takes what the taxpayer has, but only what he is to get, it is ideal from the standpoint of the French tax commissioner who remarked, "The science of taxation consists in plucking the most feathers with the least squawking." 1Mr. West, on pages 209 et seq., considers the objections to the inheritance tax as follows: First. That it is a tax on capital and hence tends to diminish the national wealth. Second. Its inequality on account of a varying frequency of transfers resulting from death. Third. That to levy a property tax and inheritance tax on the same property in the same year constitutes double taxation. Fourth. That the tax is a tax upon widows and orphans. Fifth. That the tax will discourage industry and thrift and drive away capital. Sixth. That the tax will be evaded by gifts inter vivos. Seventh. That the tax is confiscation, extortion, and a dangerous step towards communism. Advantages. On pages 213 et seq., Mr. West considers the practical advantages of the inheritance tax as follows: It is certain, the cost of collection is not high, and as to the time of payment, it is the most convenient of all direct taxes. It leaves little opportunity for fraud. The receipts do not come in all at the same time, but are distributed through the entire year. The returns are remarkably constant from year to year. It is elastic, as an increase in the rate of tax cannot diminish the death rate and the tax itself cannot be shifted. “Ability or faculty to pay has come to be the test in determining the justness of taxation." State v. Bazille, 97 Minn. 11, 16, 106 N. W. 93, 6 L. R. A. (N. S.) 732. The arguments that the recipient of the larger amount is able to pay a larger rate of tax and that it is against public policy to allow large estates to be held together after the death of the owners, are discussed in In re McKennan, 25 S. D. 369, 126 N. W. 611, 618 (reversed on rehearing), 130 N. W. 33. Arguments Classified. Mr. West classifies the arguments in favor of the inheritance tax, on pages 199 t seq., as follows: 1. The Extension-of-Escheat Argument intestate inheritance between distant relatives. 2. The Diffusion-of-Wealth Argument allowed to remain in one family. that no good reason exists for that large estates should not be 3. The Partnership Argument — that the state is a silent partner in the business of each citizen and when the partnership is dissolved by death the silent partner is entitled to a share of the capital. 4. The Value-of-Service Argument — that the inheritance tax is a payment for the particular services connected with the institutions of inheritance and bequest and that these are not natural rights, but privileges conferred by positive law. 5. The Cost-of-Service Argument considers the expense of governmental action rather than its value to the heir and would make the tax defray the expense of the probate courts, and other expenses connected with the inheritance. 6. The Back-Taxes Argument, to the effect that inheritance taxes are in place of taxes which have been evaded by property owners during their lives. 7. The Lump-Sum Argument considers the tax as a property tax or a capitalized income tax and paid once in a generation instead of once a year. 8. The Accidental-Income Argument that inheritance is a sudden acquisition of property without effort on the part of the heir, an accretion of wealth, which manifestly increases his ability to pay taxes. - 9. The Co-heirship of the State in which the state and the local political units are regarded as co-heirs with individuals. The tax is regarded in number 1 and 2 as a limitation of inheritance in numbers 3, 4 and 5 as a fee; and in numbers 6, 7 and 8 as a tax. Strongest Argument for the Tax. "One of the strongest arguments in favor of the inheritance tax arises from the recognized right and duty of the state to regulate inheritance to such an extent as the public welfare may require. The right of bequest and inheritance is a natural right only to the extent that it is socially useful; that it furnishes an incentive to the creation of wealth or furthers its preservation and judicious management. Although we uphold devise and descent as the best known method of securing this end, yet we must admit that it is open to very serious objection and very often fails completely. While the man who acquires wealth by that act gives evidence of his ability to manage it properly, it is by no means so certain that his heirs will possess that qualification. It is most fitting, therefore, that the state in apportioning |