6

the opponents of the tax, the words throughout the United States,' are deprived of all real significance, and sustaining the contention must hence lead to a disregard of the elementary canon of construction which requires that effect be given to each word of the Constitution. Taking a wider view, it is to be remembered that the power to tax contained in Section VIII of Article I is to lay and collect 'taxes, duties, imposts, and excises; but all duties, imposts and excises shall be uniform throughout the United States.'" Thus, the qualification of uniformity is im posed, not upon the taxes which the Constitution authorizes, but only on duties, imposts, and excises. The conclusion that inherent equality and uniformity is contemplated involves, therefore, the proposition that the rule of intrinsic uniformity is applied by the Constitution to taxation by means of duties, imposts, and excises, and it is not applicable to any other form of taxes. It cannot be doubted that in levying direct taxes, after apportioning the amount among the several States, as provided in Clause 4 of Section IX of Article I of the Constitution, Congress has the power to choose the objects of direct taxation, and to levy the quota as apportioned directly upon the objects so selected. Even then, if the view of inherent uniformity be the true one, none of the taxes so levied would be subjected to such rule, as the requirements only relate to duties, imposts, and excises. But the classes of taxes termed duties, imposts, and excises, to which the rule of uniformity applies, are those to which the principle of equality and uniformity in the sense claimed is, in the nature of things, the least applicable and least susceptible of being enforced. Excises usually look to a particular subject, and levy burdens with reference to the act of manufacturing them, selling them, etc. They are or may be as varied in form as are the acts or dealings with which the taxes are concerned. Impost duties take every conceivable form, as may by the legislative authority be deemed best for the general welfare. They have been at all times often specific. They have sometimes been discriminatory, particularly when deemed necessary by reason of the tariff legislation of other countries. The claim of intrinsic uniformity, therefore, imputes

to the framers a restriction as to certain forms of taxes, where the restraint was least appropriate and the omission where it was most needed. This discord, which the construction, if well founded, would create, suggests at once the unsoundness of the proposition, and gives rise to the inference that the contrary view by which the unity of the provisions of the Constitution is maintained, must be the correct one. In fact, it is apparent that if imposts, duties, and excises are controlled by the rule of intrinsic uniformity, the methods usually employed at the time of the adoption of the Constitution in all countries in the levy of such taxes would have to be abandoned in this country, and, therefore, whilst nominally having the authority to impose taxes of this character, the power to do so would be virtually denied to Congress. Now, that the requirement that direct taxes should be apportioned among the several States contemplated the protection of the States, to prevent their being called upon to contribute more than was deemed their due share of the burden, is clear. Giving to the term uniformity as applied to duties, imposts, and excises a geographical significance, likewise causes that provision to look to the forbidding of discrimination as between the States, by the levying of duties, imposts, or excises upon a particular subject in one State and a different duty, impost, or excise on the same subject in another; and therefore, as far as may be, is a restriction in the same direction and in harmony with the requirement of apportionment of direct taxes. It is yet further asserted that the tax does not fulfil the requirements of geographical unformity, for the following reasons: As the primary rate of taxation depends upon the degree of relationship or want of relationship to a deceased person, it is argued that it cannot operate with geographical uniformity, inasmuch as testamentary and intestacy laws may differ in every State. It is certain that the same degree of relationship or want of relationship to the deceased, wherever existing is levied on at the same rate throughout the United States. The tax is hence uniform throughout the United States, despite the fact that different conditions among the States may obtain as to the objects upon which the tax is levied. The propo

sition in substance assumes that the objects taxed by duties, imposts, and excises must be found in uniform quantities and conditions in the respective States, otherwise the tax levied on them will not be uniform throughout the United States. But what the Constitution commands is the imposition of a tax by the rule of geographical uniformity, not that in order to levy such a tax objects must be selected which exist uniformly in the several States. Indeed, the contention was substantially disposed of in License Tax Cases.42

As to the contention that, viewing the tax as one on succession, the law was in regulation of a matter within the exclusive control of the States, the court, after reaffirming the principle that the tax is one on the right of succession, say: " Can the Congress of the United States levy a tax of that character? The proposition that it cannot rests upon the assumption that, since the transmission of property by death is exclusively subject to the regulating authority of the several States, therefore the levy by Congress of a tax on inheritance or legacies, in any form, is beyond the power of Congress, and is an interference by the National Government with a matter which falls alone within the reach of state legislation. The fallacy which underlies the proposition contended for is the assumption that the tax on the transmission or receipt of property occasioned by death is imposed on the exclusive power of the State to regulate the devolution of property upon death. The thing forming the universal subject of taxation upon which inheritance and legacy taxes rest is the transmission or receipt, and not the right existing to regulate. In legal effect, then, the proposition upon which the argument rests is that wherever a right is subject to exclusive regulation, by either the Government of the United States, on the one hand, or the several States, on the other, the exercise of such rights as regulated can alone be taxed by the government having the mission to regulate. But when it is accurately stated, the proposition denies the authority of the States to tax objects which are confessedly within the reach of their taxing power, and also excludes the National Government

42 5 Wall. 462; 18 L. ed. 497.

from almost every subject of direct and many acknowledged objects of indirect taxation. . . It cannot be doubted that the argument when reduced to its essence demonstrates its own unsoundness, since it leads to the necessary conclusion that both the national and state governments are divested of those powers of taxation which from the foundation of the Government admittedly have belonged to them. Certainly, a tax placed upon an inheritance or legacy diminishes, to the extent of the tax, the value of the right to inherit or receive, but this is a burden cast upon the recipient and not upon the power of the State to regulate. . Under our constitutional system both the national and state governments, moving in their respective orbits, have a common authority to tax many and diverse objects, but this does not cause the exercise of its lawful attributes by one to be a curtailment of the powers of government of the other, for if it did there would practically be an end of the dual system of government which the Constitution established."

In Snyder v. Bettman43 the court say that the case of Knowlton v. Moore "must be regarded as definitely establishing the doctrine that the power to tax inheritances does not arise solely from the power to regulate the descent of property, but from the general authority to impose taxes upon all property within the jurisdiction of the taxing power. It has usually happened that the power has been exercised by the same government which regulates the succession to the property taxed; but this power is not destroyed by the dual character of our government, or by the fact that under our Constitution the devolution of property is determined by the laws of the several States."

In an earlier chapter it has been pointed out that a federal inheritance tax levied upon bequests to a State or a municipal corporation thereof,45 or a state tax on legacies consisting of United States bonds46 is not unconstitutional.

43 190 U. S. 249; 23 Sup. Ct. Rep. 803; 47 L. ed. 1035.

44 Chapter V.

45 Snyder v. Bettman, 190 U. S. 249; 23 Sup. Ct. Rep. 803; 47 L. ed. 1035. 46 Plumber v. Coler, 173 U.S. 115; 20 Sup. Ct. Rep. 829; 44 L. ed. 998.

In Murdock v. Ward it is held that a federal inheritance tax may be imposed on legacies or shares consisting of United States bonds, even when these bonds have been issued under a law expressly exempting them from taxation in any form, state or federal, direct or indirect.48

§ 275. Protective Tariffs.

The constitutionality of a protective tariff, that is, a system of customs duties levied on foreign imports so arranged as to furnish incidental protection to home industries, though questioned in earlier years, has now passed beyond the range of controversy. Such laws being on their face revenue measures, may not be questioned because their effect, and indeed the intent of the legis lature, is primarily to supply protection rather than revenue. The doctrine of the court in McCray v. United States 19 is conclusive as to this. But even if this were not so, a tariff avowedly levied primarily and solely for protection is constitutionally justified under the grant of authority to Congress "to regulate commerce with foreign nations." 50

§ 276. Bounties. 51

The constitutionality of bounties has never been squarely passed upon by the Supreme Court. Their validity was questioned in

47 178 U. S. 139; 20 Sup. Ct. Rep. 775;.44 L. ed. 1009.

48 The court say: "Whether the United States, in the exercise of the power of taxation, can be estopped by a contract that such power shall not be exercised, we need not consider, because the contract in this case does not, as we view it, mean that a State may not, or the United States may not, tax inheritances and legacies, regardless of the character of the property of which they are composed. That some of the holders of United States bonds may not have paid franchise taxes to the States, and others may have paid state or federal inheritance and legacy taxes, has nothing to do with the contract between the United States and the bondholders. The United States will have complied with their contract when they pay to the original holders of their bonds, or to their assigns, the interest, when due, in full, and the principal, when due, in full."

49 195 U. S. 27; 24 Sup. Ct. Rep. 769; 49 L. ed. 78.

50 For a summary of the arguments pro and contra as to the constitutionality of protective tariffs, see passim Stanwood, Tariff Controversies in the United States in the Nineteenth Century.

51 For the definition of bounties see Downs v. United States, 187 U. S. 496; 23 Sup. Ct. Rep. 222; 47 L. ed. 275.