Magoun v. Illinois Trust Savings Bank/Dissent Brewer

Mr. Justice BREWER, dissenting.

I am unable to concur in the foregoing opinion, so far as it sustains the constitutionality of that part of the law which grades the rate of the tax upon legacies to strangers by the amount of such legacies. If this were a question in political economy, I should not dissent, but it is one of constitutional limitations. Equality in right, in protection, and in burden is the thought which has run through the life of this nation, and its constitutional enactments, from the Declaration of Independence to the present hour. Of course, absolute equality is not attainable; and the fact that a law, whether tax law or other, works inequality in its actual operation, does not prove its unconstitutionality. Merchants' & Manufacturers' Nat. Bank v. Pennsylvania, 167 U.S. 461, 17 Sup. Ct. 829. But when a tax law directly, necessarily, and intentionally creates an inequality of burden, it then becomes imperative to inquire whether this inequality thus intentionally created can find any constitutional justification.

That this is a law imposing taxes is not open to question. The title of the act is, 'An act to tax gifts, legacies,' etc., and the first section provides that 'all property * *  * which shall pass by will or by the intestate laws of this state *  *  * shall be, and is, bubject to a tax at the rate hereinafter specified.' Classifying inheritors and legatees into the three classes of near relatives, remote relatives, and strangers, and imposing a different rate of taxation as to each of these classes, may not be objectionable. The classification is based upon differences which bear just and proper relation to it, and, where classification is rightiful, differences in the rate of taxation may be, so far as the federal constitution is concerned, permissible. But beyond this classification the statute provides that as to the third class (that is, strangers) the rate of taxation shall vary with the amount of the estate. In other words, the actual tax to be paid does not increase simply as the legacy increases, which would be the rule of equality, but the rate of taxation is also increased as the amount of the legacy passes from one sum to another. Upon a legacy over $50,000 it is 6 per cent., while upon one under $10,000 it is only 3 per cent.

It seems to be conceded that, if this were a tax upon property, such increase in the rate of taxation could not be sustained; but, being a tax upon the succession, it is held that a different rule prevails. The argument is that, because the state may regulate inheritances and the extent of testamentary disposition, it may impose thereon any burdens, including therein taxes, and impose them in any manner it chooses. There are doubtless some matters over which the state has purely arbitrary power. For instance, it is under no obligations to grant any charters; and the legislature may, undoubtedly, in giving a charter to one set of persons, impose one series of burdens, and in granting a similar charter to another set may impose entirely different burdens. But these are cases of mere gratuities, mere favors and privileges, and any donor of such may add to them the burdens he pleases. But I do not understand that legacies and inheritances stand upon the same footing, True, the state may regulate, but it has no arbitrary power in the matter. The property of a decedent does not at his death become the property of the state, nor subject to its disposal according to any mere whim or fancy. And yet, if it is a purely arbitrary power, I do not see what constitutional objection could be raised to any disposition which a legislature might make of the property of any decedent. Take the illustration made by counsel for appellant: Could the legislature of Illinois, which passed this statute, constitutionally enact that the estate of every person dying withi the limits of the state should be given to the members of that legislature? Or, if the matter of personal benefit be interposed as against the validity of such legislation, could it enact that the property of A. on his death should pass to the state, the property of B. to some religious or charitable institution, and the property of C. be divided among his children? Can there be a doubt that such inequality of legislation would vitiate it? But, whatever may be the power of the legislature, Illinois had regulated the matter of descents and distributions, and had granted the right of testamentary disposition. And now, by this statute, upon property passing in accordance with its statutes a tax is imposed; a tax unequal because not proportioned to the amount of the estate; unequal because based upon a classification purely arbitrary, to wit, that of wealth; a tax directly and intentionally made unequal. I think the constitution of the United States forbids such inequality.