83

is now imposed upon certain lineal and collateral heirs of 1 per cent., providing that any estate which may be valued at a less sum than $20,000, shall not be subject to any such duty or taxes; and the tax is to be levied in this case only upon the excess of $20,000 received by each person. The tax on certain collateral heirs, such as uncle, aunt, niece, nephew, or any lineal descendant of the same, is imposed at the rate of $2 on the clear market value of such property received by each person on the excess of $2,000 so received by each person. The statute provides that in all other cases the rate shall be as follows: On each and every $100 of the clear market value of all property, and at the same rate for any less amount; on all estates of $10,000 and less, 3 per cent.; on all estates of over $10,000 and not exceeding $20,000, 4 per cent.; on all estates over $20,000 and not exceeding $50,000, 5 per cent.; and on all estates over $50,000, 6 per cent.; exempting an estate which may be valued at a less sum than $500. This statute is evidently modeled after the New York statutes in many respects, but it does not seem to have been carefully drafted with regard to legal phraseology, and for this and other reasons may unfortunately be the source of much litigation.

(q) Minnesota.

Under the constitution of this state, by recent amendment, it is provided that there may be, by law, levied and collected a tax upon all inheritances, devises, bequests, legacies, and gifts of every kind and description above a fixed and specified sum, of any all natural persons and corporations. Such a tax, above such exempted sum, may be uni

83 Id. § 1; St. (Bradwell's Ed.) p. 213, § 307.

84 Adopted November 6, 1894. See note on proposed tax, 2 Minn. Law J. May, 1894, p. 123. This provision was evidently inserted to meet the ruling in State v. Gorman, 40 Minn. 232, 41 N. W. 948.

form, or it may be graded or progressive, but shall not exceed a maximum tax of 5 per cent.

(r) Proposed Legislation in other States.

The times seem to be propitious for this system of taxation. It is being agitated successfully everywhere, and has few opponents, and it will not be long before it will be adopted by all the American states. Legislation looking to its adoption in other states where these laws are desired has been very active during the past four years, and the system has been undergoing improvement in the states where the laws already exist.

In Illinois, as we have already noticed, a law has been recently passed taxing property passing to collateral and lineal heirs in certain cases, including both the estates of resident and nonresident decedents. In Minnesota and Wisconsin bills were before the legislatures of 1893 and 1895, proposing inheritance taxes, but failed to pass. In Minnesota, however, as we have seen, a constitutional amendment has been made allowing the legislature to impose a graded tax. 80

An amendment to the Pennsylvania statute of 1887 was proposed in the legislature of 1894 and 1895, imposing a tax upon lineal heirs, but the bill was defeated in the senate. Similar bills were proposed in Connecticut and Massachusetts. Bills have also been pending, but did not succeed, during the present year, before the legislatures of Michigan, Minnesota, and Nebraska, and other states. The federal inheritance or succession tax of 2 per cent. contained in the income tax act of 1894 is inoperative, the whole act having been declared unconstitutional.87

86 See State v. Mann, 76 Wis. 469, 45 N. W. 526, and 46 N. W. 51; State v. Gorman, 40 Minn. 232, 41 N. W. 948.

$7 Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429, 15 Sup. Ct. 673.

§ 6. Canadian Statutes.

In recent years this system of taxation has also been introduced in the Canadian or British provinces, in the form of succession and legacy duties. A short reference to some

of these statutes may be instructive.

(1) Quebec. 88

By a statute in force in this province, passed in 1892, amended in 1894, duties are imposed on successions to and transfers of real estate and movable property at the rate of from 1 to 10 per cent.

Estates that do not exceed $3,000 are exempted.

The tax is graded as follows:

Relating to property passing to those standing in a direct line, a duty of per cent. on any sum between $3,000 and $5,000 to 3 per cent. on sums over $200,000.

In the collateral line the duty is from 3 per cent. to 8 per cent., according to degree of relationship.

To strangers to the blood a duty of 10 per cent. is imposed. ·(2) Ontario.

89

Succession duties are imposed under a statute passed in 1892. Estates not exceeding $10,000 and legacies not exceeding $200 are exempt, and direct heirs are taxable only when the whole estate exceeds $100,000. The rate is 2 per cent. where the property passing is between $100,000 and $200,000, and passes to decedent's father, mother, husband, wife, children, grandchildren, daughters-in-law, and sons-inlaw, and 5 per cent. where the property exceeds $200,000. Remote relatives pay 5 per cent. and strangers to the blood

88 Statute of Quebec, 55 & 56 Vict. 1892, p. 46, c. 17, amended by 57 Vict. (1894) p. 84.

89 55 Vict. p. 9, c. 6.

10 per cent. Religious, charitable, and educational be

quests are exempt.

(3) Nova Scotia.

A duty is assessed on all property, real or personal, capable of being devised or bequeathed, or passing by descent or inheritance. The act does not apply to property under $5,000, or to property given to religious or charitable purposes, or to a father, mother, husband, wife, child, brother, sister, daughter-in-law, or son-in-law, where the property so passing does not exceed $25,000. Where the value is in

excess of such figures a tax at 2 per cent. is imposed, and when it exceeds $100,000 5 per cent.

Where property passes to other lineal relatives than those named, and exceeds $5,000, the excess is taxed at 5 per cent. To collateral relatives or strangers to the blood the duty is 10 per cent.

Legacies that do not exceed $200 are exempted.

(4) Manitoba.

Duty is assessed on all property, real or personal, capable of being devised or bequeathed, or passing by inheritance or descent.91

Estates not exceeding $4,000 are exempted to the same lineal relatives as those under the Nova Scotia statute.

On all others there is a graded duty of from 1 per cent. up to $25,000 to 10 per cent. on one million or more.

(5) British Columbia.92

Here the act does not apply to estates of less than $5,000, nor to property passing to or for use of father. mother, husband, wife, child, grandchild, daughter-in-law, or son-in-law of deceased, where the property so passing does not ex

90 Laws 1892, p. 97, c. 6, as amended Laws 1894, p. 59, c. 29.

9156 Vict. pp. 88-93, c. 31. 92 Laws 1894, p. 249, c. 47.

ceed $25,000. If it exceeds $25,000, the first $5,000 is exempted, and the rest taxed at one-half of the rates hereinafter named.

With these exceptions all other property is taxed as follows: Up to $100,000, 1 per cent.; between $100,000 and $1,000,000, from 2 to 4 per cent.; over $1,000,000, it is 5 per

cent.

(28)