The   Inheritance Tax.
Krilturs Iudiana  Farmer:
No pleasure will be presented to the
Indiana Legislature at its ensuing session
which will In- nf greater significance tn
the farmers tban the bills relating to taxation. Xo one conversant -with thc facts
will deny that the farmers bear mora than
their fare share nf the hardens of taxation.        Whatever legislation may be pro-
ihe transmission ol property! and la protecting it while the transfer is being effected: (5) Tbe State may regard the
tax as . an equivalent of the
taxes nn pru|ierty which the decedent evaded during his life time; (Hi Tbe inheritance tax may he considered as ■ tax upon
an income paid once la ■ life time; (7;
ESacb citizen should contribute towards the
upport  uf the government  in  proportion
dues  nut  disturb  industry  or  liusiness.   It
dues nut check consumption or production
of   goods,   nor   discourage   Saving   ami   investment.     It   enaliles   the   State   to  reach
much  Intangible property,    which  would
otherwise escape taxation, especially if it
piSSOfl   to   aliens.
This tax has been tried in other Aineri-
eau States and in Kurupe anil has proved
a   success Of   the   thirty seven   States
the transmission of both real and personal
property.       Tin-  recant    tendency    has
been to make it apply to direct as well as
collateral heirs and to both real and personal  property.
In the matter of exemption the tendency
has been to reduce tin- amount exempted,
even to zero in the ease of some collateral
heirs. In twenty nine States the amount
is fixed irrespective of the size of the in-
The Champion Car load of Steers,  International.  1006.    Fed by  Funk Bros., HI nington, III., sold by Clay, Robinson & Co., Chlcsgo for $17.00 per cwt.
posed which would have the effect of alleviating that burden should, therefore,
have the hearty support of all persons and
organizations interested in- agriculture. I
desire in this communication to call attention to the inheritance tax as a means of
reducing to a slight extent at least this
load of taxation.
An inheritance tax is one imposed upon
the transfer of property by will, or by the
interstate laws of thc State from any
person dying possessed of the same. Such
a tax has been justified in the following
ways: (1) The inheritance tax is merely an extension of thc right of escheat for
the purpose of limiting inheritances in the
interest of the public welfare: (2) It tends
to diffuse wealth in the interest of the
whole State: (3) In the accumulation of
wealth the State is a silent partner, and
when that partnership is dissolved by
death the State is entitled to a share of
the assets; (4) The state may claim reimbursement for tlle expenditure it incurs
and the benefits it   confers in    regulating
to his ability and tin- tax-paying ability
of the heir or legatee has been suddenly in-
* rea sed by this accidental or gratuitous
acquistfon of property. Hence a speeial
contribution may be demanded from him.
The objection that the tax-paying ability
of a family may be in some Instances de
creased by the death of the head of the
family may bc nut by allowing an ample
exemption in favor of the widow and
minor heirs, and by making the rate of
taxation lower than in other - uses. These
various arguments will have different <le-
of weight with different Individuals
according to their views and temperaments. Space will not permit a fuller
discussion of these theoretic bases of the
tax.
On the practical side the inheritance
tax has many merits to commend it. It
can be administered with little expense
and without friction. It is iinpussil le for
the person who pays the tax to shift the
burden upon the laborer, tin- consumers
of  commodities,  or  the  land  owner.       It
lying between the Atlantic ocean and the
Pacific -.eean north of the (lull* Stales,
but nine (.including Indiana) arc without
an Inheritance tax of some kind. In 1003
this tax yielded in Massachusetts $506,-
000; in Connecticut, $250,000; in New
Y.irk. (4,005,000; in Pennsylvania, $1.-
300,000; in Illinois $519,000; in Iowa.
1235,000, and in California, $287,000. In
France the Income from the Inheritance
tax contributes more than six per cent of
the total revenue of the State; in (Jreat
Britain about ten per cent. In Indiana
aftcr the tax has been well established
it ought to yield five or six per cent of
• -nr total  revenue  for  State  purposes.
Thirty American States use an inheritance tax in some form. All of these
-■■ the tax upon collateral heirs—one
up-ill the transmission of personal property only, and twenty-nine upon the transmission of both real and personal properly.
Fifteen of them also impose the tax upon
direct heirs: three upon the transmission
ol   personal   property   only,   and   12   upon
kerltance; iu one State the amount de-
. leases as thc Inheritance increases.
In thc case of collateral heirs the exemption most frequently granted is $500,
altho it ranges from zero to $25,000. In
the ease of direct heirs the exemption
most frequently admitted is $10,000, altho it has a range from .$2,000 to $20,000.
11 also seems to be the tendency to place
the tax upon the separate shares, less the
exemption and not upon the estate as a
whole.
In regard to the rates of taxation the
tendency is towards an increase and also
towards lhe application of the progressive
principle instead of tlie proportional principle. The progression takes two directions, i. c, the rate increases as the
amount of the inheritance increases, and
also as the relationship between the heir
and the decedant grows more distant. In
Ihe case of collateral heirs twenty-two
States have proportional rates and eight
have progressive rates; in the case of ilir-
l ect heirs fourteen have proportional rates
I