INHERITANCE TAX. A charge or assess ment on the succession or devolution of property from a deceased person 141 his heirs or legatees.
Snell taxes were imposed in lIonie over two thousand years ago, and. in some form. have been a slurred. of revi.nue in several of the Continental countries of Europe almost since their organiza tion as independent governments. In England Gladstone called the various inheritance tax charges 'death duties.' and the name has since eonce into common usage. (See further under DEATH The colonies of Orval Britain. particularly Australia and New Zealand. have followed her example, and 'death duties' are one of the chief sources of revenue in those progres sive commonwealths. faxes of a similar (diame ter were imposed by the ]'niter] States Govern ment as a part of its internal revenue system during the Civil War, and were repealed seine time after its close. However, in some form or other, this form of taxation is imposed in a number of the United States.
The form, rates, and method of assessment and collection of such taxes A•.tr considerably in dif ferent States and countries. There are, however, certain general characteristics common to most jurisdictions. Such laws sometimes provide for a progressive rate according to the amount of property of the estate, also a graduated rate ac cording to the degree of relationship of the indi viduals entitled thereto.
In some jurisdictions the portion to which a widow or minor children become entitled is ex empt up to a certain amount, and lineal descend ants arc favored in preference to collateral rela tives whenever any distinction is made.
Lineal, collateral, and succession inheritance taxes have been established in the following States: Connecticut, 5 per cent. on all sums over $1000; Delaware. a graduated scale of from I to 5 per cent., according to amount and degree of relationship; Illinois, 1 per cent. on values over $20,000 to lineal descendants, 2 per cent. to 5 per cent. on all amounts to collateral relatives; Maryland, 2?f per cent. on all successions; New York, 1 per cent. on all property of value of over $10,000 to lineal heirs, 5 per cent. on all amounts
or values over $500 to collaterals; Ohio, 5 per cent. on values over $500; Virginia. 5 per cent. on all amounts. The following States have col lateral inheritance tax laws only: California, 5 per cent. on amounts over $500; Maine. per cent. on amounts over $500; Massachusetts, 5 per cent, on amounts over $5000; Minnesota, a 5 per cont. graded tax ; New Jersey, 5 per cent. on amounts over $500: Tennessee. 5 per cent. tax on all amounts; West Virginia. 2V. per cent. on all property.
The English death duties (q.v.) are graduated from 1 per cent. to 10 per cent., according to amount and degree of relationship of heirs. The Canadian provinces hate followed the English statutes elosely, both as to rates and substance. On the Continent. Germany, Austria. France, Switzerland, Holland. Russia. Italy, Spain, Pm. tngal. Greece, Denmark and Sweden have inheri tance or succession taxes.
The laws providing for such taxes have occa sioned a great deal of discussion and litigation. Their constitutionality has been bitterly attacked in several States, the contestants claiming that they do not provide a uniform method of taxa tion affecting all persons alike. as required by the constitutions of most States. but this contention ha'- been repudiated by the courts of most of these jurisdictions. These decisions have pro ceeded on the ground that such a tax is equally imposed and ploperly apportioned upon a I I classes; that it is a tax on the succession or devolution of property, rather than property it self. and is, therefore. uniform in its operation and effect. Death-bed gifts, made obviously to escape such charges, are usually included within the scope of these laws. The justice and con venience of this form of taxation have appealed to most economic writers. and it is rapidly grow ing in popular favor. See DEATH DUTIES N IIERITA SUCCESSION; TAX AND TAXATION.
Consult the authorities referred to under these titles. and also Tristan' and Coots, Probate Practice (London. WOO): Dos Pa ssos, collateral Inheritance, Legacy. and Succession Tuxes (2d cd.. New York, 1895).