In England, where landed property has always been more or less locked up by a complicated system of tenures and entails, and, under the rule of primogeniture, is confined to the hands of the few, and where personal property is hoarded by the nobility and large corporations, and the general tendency is to centralize wealth, these reasons apply, perhaps, with superadded force. The claim is recently made, however, that the burden of the English system imposed by the succession, legacy, probate, and other duties known generally as "Death Duties" falls most severely upon land.10 In this country, however, where land is widely distributed, and unquestionably bears the brunt and burden of taxation (generally to an excessive degree in proportion to what is collected from personal property), the same reasons would seem to fail of application. Personal property, however, in proportion to its immense value, generally escapes the hands of the collector, and in some localities-especially in large cities-to an alarming extent.11 However minute and comprehensive the law applicable to the collection of this tax, a consensus of opinion seems to prevail that the hiding of such property, and the adopting of any dishonorable method to evade the duty, are matters for congratulation on the part of the citizen. For this reason, in particular, and owing not so much to the faulty condition of the law, a large percentage of personal property annually escapes taxation in the United States; and any system that effectually reaches any portion of this property deserves commendation and study. A collateral or direct inheritance, legacy, or succession 10 See an article entitled "The New Death Duties in England." by the Earl of Winchelsea and Nottingham, North Am. Rev. Jan., 1895, p. 95. 11 Ely, Tax'n, p. 177. tax, it seems, presents the most complete system for reaching the class of personal property and privileges which it is framed to embrace, because its collection is aided and facilitated by the requirement of the law that a dead man's property, so to speak, shall somewhere and at some time pass through either a surrogate or probate court, as the case may be, for settlement and distribution. Here it is generally presented to the public view upon the records; there is not so much opportunity for secrecy; and thus it is brought within easy reach of the taxing state or community. § 2. The Tax Defined. Any exact definition of the collateral inheritance or succession tax must necessarily depend upon the language of the particular statute which may be under consideration. It will be observed, however, that, so far as this country is concerned, there is a general similarity between the dif ferent enactments defining the tax and those included within and exempt from the operation of its provisions. From the similarity existing between the Pennsylvania and New York laws, the decisions of the courts of the former state, embracing a period of over 60 years, will be found on this account to be of much importance as precedents upon the many questions that may arise. The tax may be defined generally to be a burden imposed by government upon all gifts, legacies, inheritances, and successions, whether of real or personal property, or both, or any interest therein, passing to certain persons (other than those specially excepted) by will, by intestate law, or by any deed or instrument made inter vivos, intended to take effect at or after the death of the grantor. The theory of the promoters of direct inheritance and collateral tax legislation is based both upon logical and legal ground; i. e. that what is generally understood as the right to take by will or from intestates is, after all, but a mere privilege of the municipal law, to be changed, modified, or repealed in the discretion of the state, and not a natural right,12 and that it is only just and proper, in consideration of this privilege, that property passing by will to lineals and collaterals, remote relatives, strangers to the blood, and corporations, or, through intestate laws, to collaterals and relatives having for the most part no particular claim whatever upon the decedent, should pay to the state conferring this valuable privilege a fair and reasonable bonus or percentage upon the value of the property thus transmitted and received. Hence these laws have been adjudged by the best authorities to impose, not a mere property tax, as claimed by some, but simply a tax, duty, or excise upon the devolution or succession of property under inheritance and intestate laws. Upon this ground such taxes have uniformly been held to be constitutionally valid, both under the federal and state constitutions; 13 and it has been held that the tax is not like an ordinary tax,-it is 12 1 Bl. Comm. bk. 2, pp. 11, 12. See "Forum" for December, 1886; article by Judge Thomas, of Pennsylvania, upon "The Power of the Legislature Over the Subject of Wills," etc. Prof. R. T. Ely, in "Taxation in American States and Cities" (page 519), gives in full a bill which he approves, and which was presented in the Illinois legislature in 1887, to reform the statutes of descent and wills. Its object is sweeping, being to restrict the amount any person or corporation may take from the same decedent,-wife or husband, not over $500,000; child, etc., not over $500,000; remote relatives and others, not over $100,000. Such legislation would appear impracticable, or, at least, not consistent with the freedom of American institutions where private rights and property are concerned, though it has been indorsed by Mills (Polit. Econ. bk. 5, c. 9, § 1), who agreed that collateral heirs should be entirely excluded (Id. bk. 2, c. 11, § 3). See, also, an article entitled "Limitations of the Amount One May Take by Descent or by Will," by H. B. Hurd, Esq., 48 Alb. Law J. Sept. 23, 1893, p. 244. 13 See chapter 2, §§ 8, 25, 27. not exactly a penalty,-but is more in the nature of an assessment.11 It is not a forfeiture, because that presupposes an of fense. 15 No matter what it may be called, or upon what interests imposed, no tax can be less burdensome, and interfere less with the productive and industrial agencies of society; 16 and, when the subject is fairly considered, no substantial objection presents itself for not applying the tax rigidly upon all interests, testate and intestate. Possibly, small estates, widows, and purely public and private charitable institutions or almshouses for the gratuitous relief of the poor, sick, and helpless should in all cases be exempt. 3. The Roman Law. The origin of the collateral inheritance or succession tax is plainly traceable to the Roman civil law. Some writers claim it antedates that law. Gibbon, the historian, says that it was suggested by the Emperor Augustus to the senate, for the support of the Roman army; that it was imposed at the rate of 5 per cent. upon all legacies or inheritances of a certain value; but that it was not exacted from the nearest relatives on the father's side; 17 and that the tax was the most fruitful, as well as the most com 14 Strode v. Com., 52 Pa. St. 182. 15 Arnaud's Heirs v. His Executor, 3 La. 337; Quessart's Heirs v. Canonge, 3 La. 560; In re Vanderbilt's Estate (Surr.) 10 N. Y. Supp. 239; Carpenter v. Pennsylvania, 17 How. (U. S.) 462. 16 In re McPherson, 104 N. Y. 316, 10 N. E. 685. 171 Gibb. Rome, p. 133. Dion Cassius (liber 55) says: "It was imposed upon all successions, etc., except those to the nearest relatives and to the poor." It is also mentioned by Pliny, Panegyricus, c. 37. See 21 Enc. Britt. (8th Am. Ed.; Little, Brown & Co.) "Taxation," p. 65. prehensive.18 It was called "Vicesima hereditatum et legatorum." § 4. Succession and Legacy Taxes in England. 19 In England the legacy tax is said to have been first brought to public notice by Adam Smith. There is reasonable ground for claiming, however, that what was substantially an inheritance or succession tax also existed under the feudal system, especially in the exactions which were made by the feudal lords of what are known as reliefs and primer seisins, in which the heir or successor was compelled to pay a certain sum, or perform a certain service, before he could be invested with the estates of his ancestor.20 While the statutes in this country,21 as a general rule, cover in one law all property passing to collaterals, etc., by will and by instrument inter vivos, to take effect at or after the death of the grantor, whether of real or personal property, in England legacy and succession taxes are imposed under independent statutes. Only legacies of personal property were, at first, taxed in that country. Successions to real property, to which the term is more accurately restricted,22 were not made liable until the year 1853. The English legacy act originated, in 1780, with Lord North, whose attention, it is stated, was drawn to the Roman and Holland systems by Adam Smith's book.23 181 Gibb. Rome, p. 134. See, also, Williams' Case (1827) 3 Bland. 259. 19 Smith, Wealth Nat. pp. 683, 684. 20 Bl. Comm. (Shars. Ed.) bk. 2, *66-*68; Smith, Wealth Nat. p. 684; Ely, Tax'n, 32. 21 See Appendix, where 10 of the most important state statutes are given in full. 22 Blake v. McCartney, 4 Cliff. 101, Fed. Cas. No. 1,498. 23 3 Dowell, Hist. Tax'n, 148. Gibbon's History was published be |