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The taxpayer in Fernandez had challenged the imposition
of the estate tax in that case on "direct tax" grounds not
dissimilar to those advanced by petitioner. Fernandez
involved a since-repealed provision (Revenue Act of 1942, ch.
619, sec. 402, 56 Stat. 941-42) that required the inclusion of
the entire amount of community property (both the decedent's
and the surviving spouse's shares, except for any portion
traceable to the surviving spouse’s personal earnings or
separate property) in the taxable estate of the first-dying
spouse. The taxpayer argued that insofar as the estate tax
was imposed on the value of the surviving wife's share of
community property, it was an unconstitutional (unapportioned)
direct tax because there was no "transfer" of the wife's
community share to her; she merely retained the share she
owned prior to her husband's death. The Court, although
conceding that the wife owned her share before and after her
husband's death, concluded that the husband's death terminated
a right to manage the wife's share accorded him under State
law and made her control exclusive. This "redistribution of
powers and restrictions on powers", even though ownership
never changed "[furnishes] appropriate [occasion] for the
imposition of an excise tax." Fernandez v. Wiener, supra at
355-356. "It is enough that death brings about changes in the
legal and economic relationships to the property taxed". Id.
at 356.
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