"Che Conservative.
THE INHERITANCE TAX BILL.
I have been glad to find an occasional
point of cordial consensus with Tim
CONSERVATIVE , such , for example , as
the patriotism of planting trees , and the
enactment of a Torrens land-transfer
law. A bill for the latter was intro
duced by myself in the session of 1897 ,
failing for want of consideration. I
hope the present bill by Representative
Hanks may pass. The Torrens system
is successfully in operation in the
province of Manitoba , with slight
change the Manitoba law may be used
in Nebraska and effect a reform whose
needs become more apparent with
every year's addition to our political
length of days.
This letter is written to secure the ac
tive , efficient co-operation of TIIE CON
SERVATIVE and its readers for another
genuine piece of progressive legislation ,
the enactment of a Nebraska inheri
tance tax law. Two bills have been
introduced on the subject , H. R. 864 , by
Representative Hawxby , of Nemaha ,
and another bill by Representative
Reams , of Ouster. Both bills are before
the house committee on revenue and
taxation and the slight differences in
their proposed procedure , it may be
hoped , will there be blended in one
harmonious whole ; it is for the justice ,
propriety and efficiency of this amend
ment to our revenue law that I plead.
And first the general features of the
proposed legislation , H. R. 864 provides
for :
1. A tax of one per cent , on estates
passing to direct ( lineal ) heirs , the tax
being on the excess of $10,000 received
by each-person.
2. A tax of two per cent , on estates
passing to collateral heirs , the tax being
on the excess of $2,000 received by each
person.
8. A graded tax on estates passing
to strangers to the blood , ranging from
8 to 6 per cent , according to the sum re
ceived by each person.
This tax is to be collected by the
county treasurer through the probate
court and to be paid into the state
treasury.
The justice and propriety of the pro
posed enactment rest upon these con
siderations :
1st , That the state protects and se
cures the passing of property after the
death of its owner to his heirs , a
peculiar privilege which in many cases
could not exist without the machinery
of the state , and that it is fairly entitled
titled to compensation for conferring
this peculiar privilege.
2nd , That the notorious present in
equalities in taxation of personal proper
ty , and the escape from taxation of a
largo part of the same during the own
or's lifetime , afford just ground for its
fair assessment and taxation when the
state shall pass its ownership to othoi
persons ,
3rd , That the growth of the modon
tate , even with unhoped-for economy ,
lemands growth of revenue ; that no-
vhero can this increase of revenue bo
derived with more certainty and equity ,
vith less burden to industry and with
nero palpable perception of the state's
service for the taxation than when it
undertakes to receive the property of a
lead man and distribute it among other
persons who have not ( in many cases )
; athered it.
Efficiency As a Revenue Measure.
Its efficiency as a revenue raiser maybe
bo glimpsed at iu the following figures ,
incomplete , yet sufficient to give an ap
proximate idea of what it is doing else
where :
REVENUE DERIVED FROM INHERITANCE
TAX LAWS.
New York
From 1885 to 1804 $11,000,000
Massachusetts
1892 12,000
1898 59,000
1894 127,000
Pennsylvania
1890 670,000
1891 1,282,766
1892 ' . . . . . 1,111,120
Maryland
1890 88,000
1891 67,000
1892 . . . . . ' 114,000
Connecticut
1890 14,600
1891 74,758
1892 177,662
The complete figures for later years
are not just at hand , but show a gradual
increase in revenue as the working of
tie ] law becomes more effective. In
Illinois the Armour and McCormick
estates have paid $15,000 or $20,000
apiece into the state treasury under the
inheritance tax law , and who shall say
that it was severe burden to the benefi
ciaries of the estate or an unjust charge
for the services of the state ? The
British Empire , according to the States
man's Year Book for 1900 , derived a
revenue of $57,000,000 from various
death and succession duties iu the fiscal
year 1899.
The constitutionality of the Illinois
inheritance tax law lias been upheld by
the supreme court of the United States
recently in the case of Magoun vs. The
Illinois Trust and Savings bank , 18th
Supreme Court Reporter , p. 594. This
is the leading cose on the subject anf
carefully cites and reviews the history
decisions and principles involved. Th
court holds : First , that an iiiheritauc
tax is a tax on the succession. Second
that it is not a tax on property. Third
that there is no natural right to tab
property by descent , but that it is i
statutory right , find that the state maj
impose a tax ou this right , may dis
criminate as between relatives one
strangers ; may grant exemptions and
may provide a graded tax upon estate
'passing to distant relatives and strangers
Opinion of Economists.
The great thinkers and writers wh
mvo created the science of political
oonomy are of accord upon the justice ,
n'opriety and efficiency of an inhori-
aiice tax , however far separated their
chool of thought or point of view.
Adam Smith says ( book V , chap. II ) :
The transference of all sorts of proper
ty from the dead to the living , and that
of immovable property , of land and
louses , from the living to the living ,
are transactions which are in their na
ture either public or notorious , or as
such cannot long be concealed. Such
Tausaotions , therefore , may be taxed
directly. Taxes upon the transference
of property from the dead to the living
fall finally , as well as immediately , upon
; ho person to whom the property is
rransf erred. "
John Stuart Mill iu his chapter on
taxation , after quoting from Adam
Smith his rules for levying taxes , saj-s :
"I conceive that inheritances and
legacies , exceeding a certain amount ,
are highly proper subjects for taxation ;
and that the revenue from them should
be as great as it can be made without
giving rise to evasions. The principle
of graduation ( as it is called ) that of
laying a larger percentage on a larger
sum , though its application to general
taxation would be in my opinion ob
jectionable , seems to me both just and
expedient to legacies and inheritance
duties. "
Prof. Ely , of Wisconsin University ,
iu his work "Taxation in American
States and Cities , " p. 815 , says : "A
direct inheritance tax * * # when
moderate in amount is a just tax which
can always be assessed fairly , and col
lected without difficulty or considerable
expense. "
Seliginan ( Incidence of Taxation , chap.
VII ) , says : "A tax on inheritances can
not be shifted , for evidently there is no
one to whom it could bo transferred. "
And farther on he enumerates it as one
of the forms of taxation recommended
by him to legislators.
Summed up , the proposed amendment
to the revenue law of this state has in
its support the master minds in the field
of political economy , the decision of the
supreme court of the United States , the
approving experience of sister states ,
the plain common sense of reasoning
minds , and , I trust , THE CONSERVA
TIVE with all its readers. Nebraska is
at present floundering along with a
revenue system admitted to bo ineffec
tive and yet whoso general transforma
tion is not to be looked for at this ses
sion of the legislature , and probably not
for many years. Let the present body
enact the simple , moderate , tested ,
amendment proposed and it will have
accomplished more than can be hoped
for in any other possible way.
A. E. SHELDON.
Lincoln , Neb.
