- 56 -
under what is supposed to be an excise tax on the
transfer of property at death.
In petitioner's view, then, the estate tax may
constitutionally be imposed only with respect to property that
is transferred to a person. We think petitioner confines the
permissible scope of the tax far too narrowly in light of
long-established Supreme Court interpretations. With
reference to a predecessor estate tax (Revenue Act of 1918,
ch. 18, sec. 401, 40 Stat. 1096), which provided for a
computation of the taxable estate in the same "tax inclusive"
fashion as the current tax, the Supreme Court observed: “What
this law taxes is not the interest to which the legatees and
devisees succeeded on death, but the interest which ceased by
reason of death.” Young Men's Christian Association v. Davis,
264 U.S. 47, 50 (1924). See also Ithaca Trust Co. v. United
States, 279 U.S. 151, 155 (1929); Knowlton v. Moore, supra at
49. Instead, the estate tax extends more broadly as an excise
upon the shifting at death of the incidents of property. As
the Supreme Court clarified more than 50 years ago in
Fernandez v. Wiener, 326 U.S. 340, 352 (1945):
It is true that the estate tax as originally devised and
constitutionally supported was a tax upon transfers. But
the power of Congress to impose death taxes is not
limited to the taxation of transfers at death. It
extends to the creation, exercise, acquisition, or
relinquishment of any power or legal privilege which is
incident to the ownership of property, and when any of
these is occasioned by death, it may as readily be the
subject of the federal tax as the transfer of property at
death. [Citations omitted.]
Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 NextLast modified: May 25, 2011