*1 REVENUE, COLLECTOR OF INTERNAL HEINER, v. DONNAN et al. Argued February
No. 514. 1932. Decided March Attorney Youngquist, General with Assistant whom So- Thacker, Branch, Messrs. Claude R. licitor General Conner, were and Erwin N. Griswold Key, Sewall H.A. *2 Heiner, brief, on the Collector.
Mr. William for Donnan G. Heiner et al., Executors. *7 Court,
By filed, leave of briefs amid curiae were viz.: Johnson; Marshall; Wayne Mr. James By Mr. Messrs. Wallace, Dunbar, Colladay, E. F. Wilton H. David O. Merrick, Moore, Clinton and James O. on behalf of the Co.; Bank & Continental Illinois Trust and Messrs. Sam- Richardson, Henry uel and C. Powell Fordyce, W. J. et_al. Louis Union Trust Co. of the St. Fordyce, on behalf opinion delivered the Mr. Sutherland Justice the Court. from the Court á Circuit
This case is here on certificate 1, 1927, On March Third Circuit. Appeals inter and irrevocable Donnan, by John W. complete certain securities vivos, transferred without .consideration ,and con also, without children, to trustees for his four He money to his son. sideration, advanced sum died years on two after the 23, 1928, December less than In and advancement were made. The Commissioner gross térnal Revenue included in the estate of decedent property transferred, imposed the value authority on of the clause accordingly, death transfer (c) § of -the Revenue Act c. Stat. (U..S. V, C., Sup. 26, 1094), § Title without which, fact, that such a regard provides transfer .to within two to the death of the prior decedent shall “ and held been made in contemplation deemed have meaning within the of this title.”* of death gross value of of the decedent shall *“See. estate including the value at the time of his be- determined death *8 tangible personal, or or property, intangible, all real wherever situ- ated— any extent of interest therein of which the To the decedent
“(g) by made a or any transfer, otherwise, time trust contem- has at possession enjoyment take effect in or plation or intended to at of except adequate in case of a bona for an death, fide'sale or after his rejection the a paid tax, and, The executors after of action in refund, brought claim for this the federal dis- Pennsylvania trict the western district of to court of the tax to recover the attributable the inclu- amount in question by sion of the the property commissioner. court found that transfer in trial neither the trust nor in contemplation the advancement was made of death. of Judgment was rendered favor on the executors that the of un- ground foregoing provision (c) was § оf contravening constitutional as due clause process the Fifth and void to Amendment, being repugnant (2d) other sections of act. 48 F. An 1058. appeal taken, was and the of appeals court circuit has certified to two questions upon this of law which instruction court is desired: “ Does of 302 (c) second sentence section of revenue act 1926 violate the due process clause of fifth amendment to Constitution of the United States? “ 2. If the to question answer the first nega- tive, (c) is the second of sentence section 302 of the rev- enue act of 1926 because repugnant void to sections (c) of the same (a), act?” .1122 money money's full consideration in or worth. Where within years prior two to his death but after the enactment of this Act without such a consideration decedent has made a transfer or otherwise, any of his property, transfers trust or of or an interest therein, shown not admitted or to have been in contemplation of to possession enjoyment or intended take effect in or at or after death, aggregate his and the or value at the time value, of such property or interest so transferrеd to person $5,000, then, is in excess of such excess, extent such transfer shall be deemed and held have been made in contem- transfers plation, meaning Any death within this title. transfer of part material his in the disposition final nature or distribution thereof made the decedent within prior two prior his death but enactment this Act, without such con- sideration, shall, contrary, unless shown to the be deemed to have contemplation been made meaning death within the title.” *9 if first must question, answer to the made,
A negative that Congress the consti- upon ground the rest either representatives the of the estate deny to to power tutional by competent the show evidence right to of a decedent to two the death of prior within gift that a in of was in fact not made contemplation the decedent in that, although ques- the the tax theory upon or death; it nevertheless tax, as death transfer tion a imposed is tax. a may gift as sustained imposes- the Revenue Act of 1926 First 301 of Section “ of the net estate of every a the transfer dece- upon tax the of meaning There no doubt as to etc. can be dent,” the of language. thing The taxed is .transmission to living. from the dead the It does not include property “ inter vivos. essence, The pure rests, upon the that is the from generating death principle source which the takes its particular taxing power being and or transmit, is. to the transmission from the power living, which such taxes áre immedi- dead to on more ately power rested. ... it is the to transmit or trans- receipt-of or which is property mission death the sub- Moore, Knowlton ject by all death upon levied duties.” The value 41, 56, 57. transferred U. S. is consideration and contemplation without death gross the value of estate the decedent included death is tax, a because transfer purposes in effect. Milliken testamentary to be considered States, a United transfer, U. S. But such embodies made, begun completed so a transaction a living, gift (Brom- and between wholly taxable- McCaughn, 280 U. ley 124), S. but not sub- obviously ject any duty, form death since it bears no-relation" ” “ a generating source of such whatever death. found in the facts of life not in cir- to be And cumstance death. afterward death way no changes the say, situation; donor completion in a in the shifting, result death does not economic benefit of donfee shifting, prop- Chase Nat. Bank subject of death which is the erty, States, 327, 338; 278 U. Reinecke v. Northern v. United *10 Saltonstall, Co., 346; Saltonstall v. 339, S. Trust U. bring nor the death such 271; does in case 260, 276 U. S. else, or far being, anyone or for the donee so ripen into or interest concerned, any property right the gift is subject form of tax. any can be the of death Com- which States, 281 U. S. 503. Tyler Complete United pare of with all its ownership gift, together incidents, the no donee, life of donor and the both and passed during in or pass of kind to one cease interest remains consequence in of the death which happens' the other afterward. “ in of intended take phrase contemplation The or death,” his in the provisions effect ... at or after found act of and (c) prior acts, as applied §of vivos, fully puts executed inter them the same of taxation with causa category purposes mortis. light, the meaning purpose provision this the of in a considered, dealing recent decision of this court were Wells, of the Revenue Act States with United 116-117, 118: 283 U. S. purpose
“The dominant is to reach for- substitutes testamentary dispositions thus to the prevent evasion Coolidge, estаte tax. Nichols v. U. States, ante, United p. Milliken v. 15. As 542; the trans have all indicia otherwise a inter may gift of valid fer vivos, differentiating factor must be found in the ‘ Death must be contemplated,’ motive. that transferor’s must be motive induces the transfer is, which disposition. to testamentary leads As a con which sort mind naturally gives that rise body to the. dition that death is donor is about to. feeling near, reach the moment of inevitable surrender ownership, disposition to those likely prompt such who is most objects are deemed to be the of his proper bounty, evidence or non-existence of such a condi- existence great tion at the time of the gift- obviously import- ance in whether it is made determining contemplation of death. The natural and reasonable inference which from fact that in- period drawn but a short may.be between the recognized by tervenes transfer statutory creating the case provision presumption But years prior pre- two to death. gifts within us, [Act 1918] before is ex- sumption, statute one, and the stated to mere fact pressly be' a rebuttable shortly after not de- that death ensues even does absolutely termine it is deаth. contemplation question, is as to the of mind of the necessarily, state donor.
“ If *11 the a thought controlling it is as motive that affords the prompting disposition property, of. follows it that the statute does embrace test, inter vivos which from a spring different motive. Such were made the subject transfers of a distinct tax, since repealed.” is no
There power Congress doubt of the to pro vide for including gross in decedent, estate of a of the purposes death value con gifts made templation -of death; and likewise no of the power doubt body of that to create a rebuttable presumption made within a of two period prior death are made in contemplation thereof. But the presumption here created is not of that kind. It is made definitely incapable being by overcome proof of the conclusive — most positive Thus stated, character. the first question -is submitted answered the affirmative by Schlesinger v. Wisconsin, 270 U. S. and Hoeper Tax Commission, 284 U. The only difference between the present fixed there statute case is that Schlesinger and the case limiting application six -years a periоd there the two; at here it fixed is while presumption, involved, here while was Amendment Fourteenth length of time was not The Fifth Amendment. invalid was held presumption case. The factor statute made it ground conclusive upon other gifts, while like at actualitiés, regard without and that there was no ade- treated; not thus times were “ The presumption a distinction. basis for such quate 240), “are taxation,” (p. the court said consequent exercising upon theory that, judgment defended them in order discretion, legislature necessary found the. That to say, evasion of inheritance prevent taxes. required ‘A’ to submit to an exactment forbid- may if the Constitution this seems order necessary den the State lawful readily charges to enable- collect ‘B.’ against Rights guaranteed by federal Constitu- are not lightly treated; they tion to be so are superior supposed necessity. to this The State is forbidden to of law deny process equal protection due or the for any purpose laws whatsoever.” Schlesinger case since applied been times many courts, the lower federal by the Board of Tax Appeals, * and by courts; state and none of them seem to have- basis, at loss to been understand the of the decision, that a statute which imposes namely, upon an which the assumption taxpayer fact is‘forbidden to controvert, arbitrary is so and unreasonable that it can *12 under the Fourteenth not stand Amendment. White, Hall v. example, (2d) 48 1060; *See Donnan v. F. (2d) (the present case);
Heiner, 48 F. Guinzburg Anderson, 1058 v. Security (2d) 592; Co., F. American Trust 51 & 24 334; B. T. A. Executor, Robinson’s Tax Commission State Ky. 415; 28 S. W. year (2d) (involving period). three a is it material Nor that the Fourteenth Amendment was in the Schlesinger case, involved instead of the Fifth as The Amendment, upon legis- here. imposed restraint lation the due clauses of the by process two amendments Long, is the same. Coolidge U. S. 596. That a power may federal under the passed taxing statute arbitrary fall capricious so as to cause it before the process due of law clause of the Fifth Amendment Coolidge, 274 531, 542; settled. Nichols v. U. Brush- S. Co., 240 Tyler aber Pac. U. 24-25; v. Union R. States, United supra, p. Commission, v. Tax had Hoeper supra, court
before it for consideration which statute Wisconsin provided computing amount of income taxes by residing together payable persons as members of a the income of wife should family, be added to that of . by husband to and payable and assessed him. We held since in in fact the law and wife’s income was that, her separate was property, power the state without tax in part by measure his his income of wife. At page 215 we said: “ that, have no We doubt because of the fundamental our conceptions which underlie by system, attempt on person’s state to measure property in- or by come reference .to'the income another is due process guaranteed of law contrary by as the Four- teenth That which Amendment. is not fact the tax- payer’s income such calling cannot be income. Compare Coolidge, Nichols v. U. S. 540.” suggestion state court the provision was valid necessary prevent frauds and evasions of tax married persons rejected was definitely on the ground that such necessity claimed' could justify an otherwise unconstitutional exaction.
In substance and effect, situation presented Hoeper case is the same as that presented here. In the *13 in of respect property is laid part, the tax, first place, of in cоntemplation transferred not to been shown have had to passed title to which complete death and the the. the donor; secondly, of and the lifetime the during donee of gift or in respect laid the transfer of the upon tax is and calculated transfer, upon is upon It laid its value. being decedent, of the such value of the estate value, gift, and the es- inclusion of by enhanced the fictitious value. computed. upon for a tax tate made liable of statute the value when Moreover, under the arbitrarily and its value fixed as of is to be ignored, death. The result that upon of the donor’s is the date estate who succeed to decedent’s there is imposed those measured in part property the burden which no of the to which portion estate, the estate is comprises from which related, and the estate derives no bene- way no Plainly, is to any description. fit of measure the by imputing part property on A’s value which a result both the B, Schlesinger cases condemn and a arbitrary Hoeper denial of due an of law. Such exaction is not process taxation but “ not taxation that government is sрoliation. should It gains profits take from one another. That n taxation compels pay which the support gains from his own and of his government own property..” Co., 17 v. Railroad United States Wall. here presumption
The excludes consideration every tending fact and circumstance to show the real motive of man young in abounding the donor. health, bereft lightning of life within two stroke after a gift, conclusively presumed making have acted under inducement of the thought death, equally ailing old who already with the stands in the shadow And although of the inevitable end. tax explicitly upon is based the circumstance that the thought of death must the impelling (United cause of the transfer Wells, supra, p.
States v. 118), the presumption, never- theless, precludes ascertainment the truth in re- spect requisite upon the liability which is made with rest, result, the present case and in many *14 others, of an putting upon estate burden a tax in measured part by the of property value never owned by the estate or in the degree remotest connected with brought death which it into existence. a Such statute is more less arbitrary and defensible against attack than arbitrаrily one retroactive imposing which this taxes, in court has decided be to clear violation Fifth' by As Judge Amendment. said Learned in Hand Frew “ Bowers, 12 (2d) F. Such a law far more than capricious merely retroactive taxes. Those do impose burdens, indeed but at unexpected least dis- they tribute them in accordance with taxpayer’s wealth. But this section distributes them in accordance with is .a far wealth; grievous injustice.” another’s that more To sustain the validity this irrebuttable presump- tion it is argued, apparent conviction, with that under the prima jade in presumption originally force there had been a loss of revenue, and decisions that holding par- ticular were contemplation not made of death are cited. This is near that very saying individual, to evasion, may innocent his stripped constitutional rights in order to a further more thorough enforcement startling against guilty the tax new and doc- —a
trine, by condemned its mere statement distinctly and by .repudiated Schlednger this court 240) and (p. 217) Hoeper (p. involving cases similar Both situations. emphatically rights superior declared that such were to necessity. this supposed government makes the the conclusive point a by created statute is rule of substan-
presumption and, law, tive as regarded such, upheld; should be and view tending support to are cited. The decisions earlier revenue acts created a prima presumption, fade was made the later of 1926. A which irrebuttable act is a rule presumption clearly rebuttable of evidence which Mobile, the effect burden of shifting proof, & R. Turnipseed, 35, 43; J. K. C. Co. v. U. S. is hard see how rebuttable statutory presumption a rule a turned from a evidence into rule of substantive result of making law the a later statute it conclusive. as is a proof; open both cases it substitute and in the conclusive. challenge other disproof, as However, presumption whether the latter be treated law, an or of substantive it constitutes rule of evidence fact legislative fiat, enact into existence a attempt, to, does and cannot be made exist not, which here are same, ready and the result is the unless we actuality, we Schlesinger case, overrule the are for that not; presumption dealt with conclusive the court case *15 question to the regard it invalid without of its tech held This court held' more than nical characterization. a a creating presumption operates that statute which once fair to rebut it due opportunity a violates the deny to Fourteenth Amendment. For exam clause process Alabama, 219, S. 219 U. et Man Bailey seq.; ple, “ It U. 5-6. is this Georgia, apparent,” ley v. “ 239) in that Bailey (p. the case a constitu said court transgressed .by be indirectly cannot prohibition tional more statutory presumption any of a creation the than to by enactment. The power violated direct be it can of' not a means from con escape is presumptions create restrictions.” stitutional power to enact as a is without legislative body
If a a the to denying litigant right a statute of evidence rule case, certainly the cannot power facts his prove guise the enactment emerge by putting to rule of substantive law. of a
Second.. The provision question cannot be sustained tax, as imposing gift (1) a because the intent of Con- gress to enact the provision as an of the death incident tax and not as a tax is gift unmistakable; (2) be- cause, if a tax, construed as imposing gift is in that so arbitrary still as aspect capricious to.cause it to within, fall the ban of the due process clause of the Fifth Amendment. Congress intent
1. The
include
made in con-
integral
of death as
templation
parts of the decedent’s
purposes
for the
death tax only
as,
estate
is so clear
preclude
argument
reasonably,
contrary.
Wells, supra,
United States court
as
held,
already
this
thought
that
it is the
shown,
death,
since
control-
that
ling
prompting
gift,
motive
affords
the test
“
it made in
contemplation
death,
whether
is
it follows
gifts inter
vivos which
that
the statute does not embrace
from a
motive.
Such transfers were made
different
spring
gift
since
And
subject
repealed.”
distinct
Co., supra,
Reinecke
Trust
signifi-
at
It
p.
see
tax referred
repeal
cant
to was made
(a),
(c. 27,
125),
the same act
Stat.
which
§
in question.
here
The tax
provision
contains
transfer of the net
but
it is first
upon the
imposed
estate,
gross
to ascertain the value of
necessary
estate,
is to be
provides
this
determined
in-
the statute
things,
auy
other
the value of
cluding, among
interest
which the decedent has at
time made a
of his death.
cоntemplation
statute
re-
transfer
value shall be determined
as of
the time
quires that
regard
without
value
of the decedent’s
*16
upon
The event
which the tax is
when received.
gift
transfer of the
but
gift,
is not
the
the
depend
made to
The tax falls
the estate
decedent.
transfer
of
not
the
and is
upon
gift,
computed
estate
upon the
but, by
the gift,
progressively
value of
upon
graduated
the value of
percentages, upon
the entire estate.
is
from a
of
It
consideration
these
apparent
features
so
Congress
statute that
not have
even
had,
could
in mind the
of
remotely,
imposition
gift
a
that to con-
in question
strue
such
tax
provision
imposing
a
to disregard
language
is
and the
plain
plain intent of
For this
do so would be
law
act.
court to
to enact a
construing
pronounce
under
of
one and thus
pretense
flagrant
itself
a
guilty
judicial
perversion
power.
if
assume, contrary
But
we
what
is
reasonable,
a
tax
imposed by providing
that
that
the value
transferred
consideration
de-
without
a
years
cedent within two
to his death shall be
prior
gross
in the value of the
estate,
included
the case
government
is no better.
thе Schlesinger
case,
Supreme
of Wisconsin
expressly
Court
had
held that
supported
tax could not be
as one on gifts inter vivos
“ Under
only, saying,
such taxation the classification is
wholly arbitrary
perceive
and void. We
no more reason
(cid:127)why
gifts
such
inter vivos should be taxed than gifts
made within six
years
marriage
other
event.
only
It
because
class
closely
with
connected
and a
the inheritance tax law
part
is created that
law becomes valid.” Estate
Schlesinger,
1,Wis.
10;
acterized. it be a gift tax, based, is nevertheless, the transfer of the upon gift, upon but the transfer of the estate; upon value of the estate, and not that of gift. Obviously these are bases no having relation gift. Moreover, whatever value to. n gift is not to. be determined as of the time when made, considered as a part is to be but, estate, fixed as of the date of the decedent’s death —a condition so obviously arbitrary as, and capricious by to con- itself, demn the tax, as a as gift tax, viewed violative of due process. It is to be the beneficiaries paid although it for in decedent, impossible is them to share gift which has passed beyond therefore, recall. It is, government to the person, exacted contribution pro based upon tanto the wealth of another. gift
Considered as a these conditions tax, demonstrate lack entire of relation between the and the taxpayer transfer subject which is the of the tax. They disclose there no rational for ground measuring tax, gift considered tax and as not as a death by the tax, value of an estate into coming being after the gift has become complete irrevocable, and of which the And comprises part. no they show that to impose lia- bility tax, a gift upon as tax, estate, they in terms in is, effect, to exact require, tribute from the gains or of one measured the gains or prop- erty of another. question first must be answered in the affirmative makes unnecessary to answer the second.
It is so ordered. took no part Me. Justice Cardozo the consideration or decision of this case. Stone, dissenting.
Mr. Justice I think the tax involved this and its companion case, Co., post, p. 352, v. Delaware Trust all Handy respects valid, certified questions and that the both cases should negative. answered in the
The present federal estate enacted in 1916, Title Act of 1916, II of the Revenue c. 39 Stat. *18 in each
been continued successive Revenue Act. Al- of though privilege levied upon transferring property and on the imposed at death estates of passing decedents, (cid:127) was not tax limited such prescribed transfers. By of (b) (c) and the 1916 it was 202 Act extended to gifts § vivos, inter in made of contemplation death, and to gifts joint of or property upon tenancy tenancy by the entirety, of which inured the benefit surviving tenant upon death of the donor. Both classes gifts of were taxed rates, of the decedent’s estate at part as prescribed The by the estate tax. obvious purpose of these provi- sions was to or prevent compensate for the withdrawal inter vivos from by gifts of operation of the tax. 1918 Act, estate Revenue 402 (c) and (f), § 18, 1057, 1097, 40 in c. included Stat. the donor’s estate, all subject tax, to the estate gifts effected by any trust in taking effect possession enjoyment at the time of death, the donor’s and the in proceeds excess of $40,000 of life purchased by insurance the decedent in his lifetime named payable and beneficiaries at his death.
As a further measure for preventing avoidance of the vivos, inter in by gifts Congress, tax 1924, adopted the 319-324 of gift the Revenue Act of year, §§ c. 253, 234, 43 Stat. 313-316. That it was as a adopted measure to avoidance prevent of estate tax sufficiently from the fact that the graduated appears and rates exemp- were the the tax in tions same the case of testa- 301 transfers, (a), 319, mentary 303 (a) §§ 321 (4), (a) fact that in the and from the (l),1 Revenue Act of 1926 Report 179, No. Congress, also 68th. Sess., p. 1 See House 75; 1st Record, pp. Congressional 65, 3119, Vol. 3, 3120, 3122; Part 4, Part 3373; 8, pp. 3371, 3372, 8095, Part 8094, pp. 8096. the retroactive reductions rates the estate tax were gift 301, 324, to the rates of the tax. Reve- extended §§ 1926, 27, 9, 69, nue Act of c. Stat. 86. Provisions were tax against the estate crediting gift also was later to be gift required where the amount of the 322, gross, § Revenue included the decedent's estate. 1924, 404, 1928, Revenue Act of 316; Act of 43 Stat. § 791, 852, c. 45 Stat. inconvenience, inequalities expense
Because of administration, operation its difficulties other tax was the Revenue Act repealed § ex- years’ and as result of ten 125;2 Stat. in the administration of the estate tax and perience par- taxing contemplation ticularly provision of 302 present (c) the Revenue provision § added, operates was which Act Stat. two the tax on all made within impose *19 the motive of regardless purpose of the donor. death, Committee of the House of Ways Repre- and Means The legislation this sentatives, report recommending in its Sess., 1st 1, Congress, 15), No. 69th Report p. (House tax on in gifts contemplation that the out pointed administration, in its practical ineffective bad been deaffi in to of revenue the Government conse- loss great awith difficulty оf enforcement will be “ the that quence, gift tax.” repeal in view of the serious more even the was amendment qualification, stated, without It gifts within two years, on all made tax the imposing one “ provision of this the inclusion said that death, and only inway and is of the evasion most prevent will 3 prevented.” can be which it 2 Congress, p. 9. 52, Sess., 1st 69th Report No. Senate See 3 correspond to have motivated seems also consideration This Viet, England adopted statute, 44 legislation. In 1881 English ing inter gifts made within vivos, (2) (a), which included 12, c. § subject estate, to death in donor’s months three Con- power here with the only As we are concerned in discussing I shall no time take gifts, to such gress which has by Congress of language form particular taxing In statute purpose. its sought accomplish inter it can be vivos, though legacies, were gifts they as all says that consequence no whether the enactment the donor irre- of death of are years within two gifts death or buttably presumed contemplation all metre tax on made directly imposes gifts whether years case, two death. either within donor’s which, with only here, we are concerned the power exert, indisputably sought lеgislative body choice of words which it has the particular with that purpose. expressed its terms,
The reduced to is whether simplest question, an power to estate possesses supplement Congress it, from the revenue' derived as was its protect inter vivos, on a tax all purpose, declared donor, years within two of the death of the at the same and in manner though rate the same were I it has. think made at death. inter borne in mind that gifts it is to be
At the outset
vivos are
taxation.
from federal
Whatever
not immune
have been
formerly
entertained,
it is now
may
doubts
may tax
national Government
all
settled
year,
1889,
was
months
increased to
duties.
three
VII,
10 Edw.
c.
(1), and to three
Viet. c.
§
except
force,
par-
(1),
provision remaining in
the last
some
§
mention,
present
until
necessary
now
circumstances not
ticular
time.
*20
B,
Appendix
The brief for the
lists fourteen
Government
No.
which, prior
present
in®1926,
to the enactment of the
statute
states
necessary
expedient
legislation;
adopt
found
similar
had
subjected
gifts
made within
statutes
inheritance taxation
state
years
ranging
periods
from
to six
of the donor’s death. See
“
Death,” 5
Sabine, Trаnsfers in
Internal Reve-
Contemplation
also
News,
1931, p.
September,
nue
may
to those which
comparable
and at rates
inter vivos
Bromley McCaughn,
death.
on
at
imposed
gifts
be
vivos,
were inter
That
the present
That
answered
question
v.Wisc
If
337 in stating argument presented rejected and And there, n 240): Court said (p. “ and presumption consequent taxation are de- fended upon theory that, exercising judgment legislature in necessary found them order discretion, evasion of prevent inheritance taxes. say That is to ‘A’ may required be to an submit exactment forbidden by the Constitution if this in necessary seems order to enable the State readily to chargеs against collect lawful ” «B.’ Here, graduated tax imposed by Congress on gifts inter vivos is Bromley McCaughn, supra, forbidden, not v.
and the case is one not where A’s property taxed to enable the Government to collect lawful charges against B. Here A’s gift, may taxed, which lawfully instance, taxed because removes from the operation of tax, which, another gift, but would be applied to the property Concededly at A’s death. there is in the Federal nothing Constitution or laws which necessarily precludes gifts taxation of at the same rate if death, and value as at they had passed donor’s rather than at rate and value prevailing at the time Bromley McCaughn, gift. The tax- upheld v. supra, inter vivos all gifts taxed at the same-rates exemptions with the as in of testamentary same the case . States, Milliken 20, v. United In transfers 283 15, U. S. inter vivos, gifts a selected class of were not testa which mentary although contemplation were Phillips taxed a part so of the donor’s estate. See v. Co., Dime Deposit Trust & Tyler In U. S. 160. Safe States, United upheld taxation, U. we S. as a estate, donor’s of another selected part class vivos, inter entirety estates donated both, although for the was spouse benefit title, possession, and neither nor testamentary enjoyment made inter taxation of at death. Similar passed vivos, finally only but effective at death, was sustained Co., Reinecke Northern Trust U. S. States, Bank Chase National v. United 278 U. 327; see Bowers, U. S. Taft Schlesinger case the classification of the gifts *22 taxation the
selected for under state was statute deemed arbitrary be so as to- violate the Fourteenth Amend- legislation forbids ment, which state denying equal pro- Here, tection the laws. we of are concerned only with the Fifth Amendment. As was said this by Court States, LaBelle Iron Works v. United 392: U. Fifth no equal “The protection clause; Amendment only rule of uniformity prescribed the with respect to duties, imposts by Congress and excises- laid is the uniformity required by I, territorial Art. 8. . . . § difficulty any of adjusting system of taxation so as. in its precisely equal render bearing proverbial, nicety required and such of not even the States under equal protection clause, much less Congress of under general requirement the more of due of process law White, See Treat v. Flint 264, 269; taxation.” U. S. Co., Tracy 158; Barclay & Stone Co. v. v. 220 U. S. Edwards, 267 U. S. has been held invalid under Fifth Amend
No tax based on classification, ment an it is improper because significant that the entire one forty years hundred and held history, only its taxes the Fifth condemned were those deemed to arbitrarily Amendment be retro Coolidge, Nichols Unter 531; active. See U. S. myer Anderson, Coolidge Long, 440; 276 U. S. U. S. 582. I is, think, then,
It plain, tax cannot rightly on its face. These gifts inter be held unconstitutional vivos, being from immune and the obvious taxation, and pérmissible purpose present and related sec- to protect tions being revenue thé from the derived tax- in taxing want due them can estates,4 process ation class of the selection of this within only because arise for at the prescribed rates, taxation two of taxing from the trans- permissible policy remote is so unrelated to be palpably or to it as at death so fers unreasonable. arbitrary and practice disposing is evident
It if vivos, regard inter generally adopted, would, by gift seriously or or motive of. the defeat age donor, less and that the tax, prac of the estate impair operation if before encouraged gifts, shortly such tice would were left free of form the dоnor, the death á legitimate ground in itself would be taxation. That as was legacies, all at same rates taxing object but is to gift tax; protect since done derived from Gov revenue to be the estate to tax every gift regard is not bound without ernment the end sought relation to convenience to its *23 of and levying the Government it. expense collecting aim at the evil where for tax may it exists select It .and of which has tends .gifts experience ation-that class shown the estate .tax. Court has held to defeat This most the Fourteenth Amendment for that does not explicitly subjects for form of the selection of taxation for bid they may not or readily effectively be very the that reason tax-which by legislative another it is the policy reached Comptroller, Watson v. State 254 S. to maintain. U. of 125. And since the one tax 122, 124, imposition the purpose the the by compensate is induced- loss in accomplishing may. effect this result itself other, the basis subjects be the of the selection taxation. St. York, 201 S. District 633; John v. New U. Columbia 4 Ways Committee, Report, 1, and Means No. 69th Con House Tyler States, 497, p. 1st 15. S. gress, Sess., See v. United U. States, 283 505; 15, Milliken United U. 20. v. S. Brooke, 150; 138, Shevlin-Carpеnter
v. U. S. Co. v. Minnesota, 218 U. S.
. being object here, That imperative it is not that of the motive donor be made the exclusive basis of selection, of for taxation, these gifts as in the case of of death. contemplation made The fact that such gifts, shortly death, regardless before of motive, chiefly contribute to the withdrawal of property from operation tax; enough the estate to-support selec tion, though not they even are conscious evasions of the opprobrious epithets estate and can certainly them. The applied opinion Court does not Congress select, has deny power basis, that on this cer tain be taxed as estates are In fact, taxed. recently Congress held Court has does possess that language so in power completely said applicable tax. Tyler States, to the United present U. S. tax on estates as a entirety, part, estate to the passing surviving the decedent’s spouse, was upheld regardless it, motive which inspired and the the. rested on decision was and only possible ground sole “ legitimate aim of Congress the evident was to an or in prevent avoidance whole part, estate this method of disposition during life spouse time of who owned the property, whose funds had been to procure used separate it; pro adjunct review an vision under the general scheme .is part which it is a of taxation entirely appropriate of. end.” See also a means to that Reinecke Northern 278 U. Co., 339; Bowers, Trust U. S. 470, Taft . 482 taxed some as the may, present The. gifts instances, *24 states, bear no relation whatever death, to opinion except that all near death. But do an all are have intimate to the of policy taxing relation the and vital estates of gainsaid, cannot be at what decedents would is, by otherwise be taxed the gift, withdrawn the from of operation the taxing act, and the revenue derived-from the necessarily taxation of estates unless act impaired, the impairs it, vivos, which the giving away inter property is itself It generally taxed. cannot be said made gifts near the time of death do not have a greater tendency to at defeat the estate tax than made remote periods from it, greater both of the number amounts because and gifts more оf the former and because such with- certainly from the the estate tax operation draw property and relatively infrequent gifts than do the earlier or be lost before may destroyed which $5,000 in of amounts death. Gifts excess donor’s taxed, which alone are are any year,, in one donee which, fortunes in the from substantial made usually life, relatively accumulated late cases, are generality of life, if which, given away not great bulk and the Nor that the cost can be denied at death. pass would collecting earlier, the tax on gen- inconvenience - which frequent gifts, less led to smaller, erally not themselves or tax, may require repeal them and nearer between distinction justify death. time if to make selection power Congress Since priori that such do say facts cannot we warrant, facts making selection which it did,. or that exist or without arbitrarily exercise of the acted Congress rightfully' which belong discretion it. judgment U. S. As was said in Riley, Stebbins Saunders, 270, ‘it 12 Wheat. is but a proper Ogden wisdom, integrity, to the due respect ..“. by which legislative law body, patriotism favour of its until validity, its presume passed, is proved beyond all rea- constitution violation doubt.” sonable
342 underlying constitutionality The existence of facts is always the burden on him presumed, always to who assails the selection a class for taxation to estab- lish that there could be no reasonable for legis- basis making lative it.5 judgment But if presumption even that not be indulged, on the passing Congress to power impose tax, this we cannot disregard the nature of the rightly difficulties in the involved effective administration of a scheme for taxing transfers at we eyes cannot close- our to those perhaps less which have- been disclosed apparent, form of experience with thiá taxation in the States, United which led the enactment of the present statute.
It is evident the estate if tax, not supplemented by an effective provision taxing gifts tending to it, defeat to a considerable extent, fail of its would, purpose. The on in contemplation death, devised for upheld by has been this Court, Milliken v. purpose, States, United 283 15, U. S. but difficulties its successful administration have become apparent. The donor of which would property súbject otherwise be taxes at his death heavy does not usually disclose his mаking if gift, even he purpose does conceal it. not, and often may analyse He does not, his motives or for whether determine himself his dominating purpose is testamentary substitute disposition which Milliken subject would to the States, v. United see Wells, United States 23; supra, p. v. U. S. 102, or 5 Sinking-Fund Cases, 700, 718; S.U. Nicol Ames, v. 173 U. S. 514-515; Stranahan, 470, 492; 192 U. S. Graves Buttfield 428; U. S. Minnesota, Zahn v. Board Works, Public 325, 328; 274 U. 365, 395; Euclid v. Ambler Realty 272 U. S. Co., Co., Hardware Dealers Mut. Fire Ins. Co. v. Glidden S.U. 158; O’Gorman & Young, Inc. 282 U. S. Co., Fire Ins. Hartford 251, 257-258. pre other motives as to combined with it is so whether in making it the donor though even taxation, its clude and that others, like must die he, be unaware cannot escape natural course events, will, his.donation pass on his other imposed will be tax which *26 Wells, supra. United States at death. See ing . of one and searching purposes of motives
difficulty survive, far dead, which, they of so proofs who is need personal representatives, of his are the control As the event has the diffi elaborated. proved, not.be establishing requisite mental state of the culties of in' gifts donor has rendered the tax on contem deceased and means plation of death a weak ineffective of compen drain on revenue by for the withdrawal of sating of from the of operation vast amounts the estate tax.
The Government has been involved in 102 cases arising (b) under 202 of the 1916 Revenue Act and § its success of, ors.6 number does This the cases includ,e (c) 1926, under 302 of the Revenue arising Act of § consideration. present statute under And it includes only cases, was those decision which determined question of fact, answer made to the had gift whether of death. contemplation been made gifts of involving approximately $4,250,000, In 20 cases In was 3 it was partially the Government successful.7 6 463, 1916, (b), 756, 778; 202 c. Act of 39 Stat. Revenue Revenue § 18, 1057, 1097; (c), c. 40 1918, 402 Stat. Revenue Act of Act of § 278; 136, 227, 42 (c), Stat. Act of 302 402 c. Revenue 1921, § § (c), 253, 304. c. 43 Stat. years were made these cases the within two of death. 18 approximately $3,000,000, gifts made was exclusive
The value of the so definitely realty personalty, of which was not value of certain Among group reports. one in which in the cases was indicated (cid:127)by $880,100, made 'when the donor was advised his was Phillips Gnichtel, die, (2d) physician he was about 27 F. a successful;8 nd in 78 involving gifts largely in excess of
$120,000,000, it was unsuccessful. In another jury disagreed.9
In 56 of the total of 78 cases against decided thе Gov ernment, the gifts were made within two years of death. In this group 56 donors, two were more than ninety years of age at the time of death; ten were between (cid:127)eighty and ninety; twenty-seven were between seventy and eighty; six were between sixty and six seventy; were between fifty and only one was sixty; younger than fifty.10 There was one gift of $46,000,000, made within two months of death by a donor seventy-one years age at death;11 $36,790,000 one of made by a donor over eighty, who consulted a tax expert before making the 636; cert. den. 278 another $421,200 U. made within four seventy-two months death a donor age, Luscomb Commissioner, (2d) 818; $1,000,000, F. one of over Brown v. (2d) Routzahn, (N. Ohio); 58 F. D. $312,000, one of (2d) Bowers, (S. Y.). Kunhardt v. 57 F. D. N. Two of the *27 more $200,000, Rengstorff McLaughlin, were.of than (2d) v. 21 F. 177; Commissioner, Green v. 6 B. T. A. 278. were of Six more than $100,000, Farmers Bank Commissioner, & Trust 43; Co. v. 10 T. A. B. Burling Commissioner, 264; v. 13 B. Commissioner, T. A. Hale v. 342; Sugerman 18 B. A. Commissioner, 960; T. v. 20 B. T. A. McClure Commissioner, (2d) (C. v. 5th); 56 548 C. A. F. Neal v. Commis sioner, (2d) 53 F. 806. Two were of more than $50,000, Second Commissioner, 1066; National Bank 12 v. B. T. A. Latham v. Com missioner, 16 B. T. A. 48. The others were either less than that amount, Commissioner, 1289; Kahn 4 v. B. T. A. Wheelock Com v. missioner, 828; 519; 13 B. T. Rolfe Commissioner, A. v. 16 B. T. A. appraised gifts shown, or the value of the is not Lucas, Schoenheit v. (2d) 476; 44 Commissioner, 791; F. Lehman Appeal v. 6 B. T. A. Wаrd, 3 B. T. A. 879. 8 Commissioner, 9; 7 McCaughn, Serrien v. B. T. A. 112 Bloch v. not reported (E. Kelly Pa.); Commissioner, D. v. 8 B. T. A. 1193. 9Byron Tait, (D. reported Md.). v. not 10 age definitely by of four of the donors is not shown The reports, these, but as to at least three of there are indications that years. decedents were of advanced Astor, reported yet (S.
11 Estate not Y.). N.D.
345 a donor $10,400,000 aged of over gift;12 one death;13 months six before seventy-six, in death, which the assessed seventy-five at aged donor was one other There excess $1,000,000.14 was over of $1,000,000;16 5 others in excess largely $2,000,000;15 of $250,000;18 excess $500,000;1713 excess of 4 others $100,00019 value was 14 in excess 2012 3 definitely cases; involved total- not shown 12 Nevin, (2d) 478; den. 283 U. 835. 47 F. cert. Commissioner v. 13 (2d) Heiner, 6 Rea v. 389. F. 14 Willcuts, Flannery (2d) 25 951. F. v. 15 Commissioner, A. B. 500. White v. 21 T. Gimbel v. Commis 470; v. T. A. 16 Crilly Commissioner, 15 B. reported (D. Md.); Lough Tait, 214; not B. A. sioner, 11 T. v. Stieff Security (E. Pa.); McCaughn, not reported D. American & ran v. Commissioner, 334. v. 24 A. B. T. Trust Co. 17 McCaughn, Mass.); Esty Brehmen v. unreported (D. Mitchell, v. Wells, United Pa.); 102; 283 States (E. v. U. S. unreported D. A. 255. Borden, 6 T. Appeal B. McLaughlin, Pa.);
18 Mather (2d) (E. 223 Pohlman 57 F. D. v. Thurman, Apperson v. Neb.); States, not reported (D. United v. Donald, (S. Beltzhoover Ind.); reported (D. not D. reported v. not Romberger States, 242; Cl. United v. Miss.); Ct. Com 65 v. Safford Moore v. 193; Commissioner, 279; B. T. missioner, 21 A. 21 A. B. T. 1150; v. Commissioner, Boggs Commissioner, 8 B. T. A. Lavelle v. Commissioner, 470; 15 v. Jaeger T. White v. 824; A. B. A. 11 B. T. Fidelity-Philadelphia 897; A. Trust Co. v. Commissioner, 16 B. T. Vaughn Riordan, v. 910; B. T. A. 280 Fed. Commissioner, 17 19 Wilfley Helmich, (E. (2d) Richardson v. Mo.); v. F. D. Armstrong (D. Rose, v. reported Md.); (S. Tait, reported not D. (30 States, 222; Burnet, v. United Ga.); (2d) 35 F. Loetscher v. Off States, (2d) Howard v. United App. 38; 835; F. D. C. 65 Ct. Cl. 713; 332; Commissioner, Allen Rogers 20 B. A. Commissioner, T. Mississippi Valley Trust 1124; A. Co. B. T. Commissioner, *28 v. 136; Gerry Commissioner, 748; 22 B. T. A. B. T. A. Estate of 1254; Connell, 11 B. A. United T. States Trust Co. Commissioner v. Pratt v. 312; Commissioner, Meyer 377; 14 B. T. A. 18 B. T. A. v. United States, 60 Ct. Cl. 474. 20 Motter, Beeler (2d) 33 788; F. Lozier v. Commissioner, 7 v. v. Commissioner, 18 B. T. A. 218. 1050; Heipershausen B. A.T. 346
ling $100,000.21 less thaii In 22 remaining cases gifts were made more than two death before the donor.22 judgment Ways
The of the and Means Committee that (c) 302 required §of 1926 was provision Act drain on the from the stop the revenues estate tax, these 56 strikingly confirmed cases. The value of alone, those cases a total was $113,401,157, realty that does include personalty of unde- not termined very large value or the on which the Gov- ernment, already noted, sought the case collect a $1,000,000. more than In many cases, those in notably which large amounts were the gift was all substantially involved, others, donor’s estate. the addition of the amount 21 States, Root (2d) (S. v. United Molton v. Fla.); 56 857 F. D. Sneed, Gardner, (N. Owen v. reported Ala.); reportеd not D. not (E. Cromwell v. Y.); Commissioner, 461; Appeal 24 D. T. A. N. B. Kaufman, 31; 5 v. T. A. Schulz 7 B. T. Commissioner, B. A. 900; 1212; Davis v. Goldman v. Commis Commissioner, 9 B. T. A. sioner, 92; Miles, 692; Appeal Gaither v. 11 B. A. 268 Fed. T. 1196; Appeal Richardson, McDonald, 1295; 1 2 B. T. A. T. B. A. Appeal Hillenmeyer, 2 B. T. A. 1322. 22 realty, $6,707,056. total of these gifts, value exclusive of was States, Tesdell reported (S. Iowa); United Mason United D. v. v. States, (2d) 317; Tips Bass, (2d) 460; Smart v. United 17 v. 21 F. F. States, (2d) 188; McCaughn Carvill, (2d) 69; 21 F. Phillips 43 F. v. v. Stein v. Commissioner, 1054; Commissioner, 7 B. T. A. 9 B. A.T. 486; v. Commissioner, 176; Appeal Spafford, Baum 21 T. A. B. 3 v. 1016; Commissioner, 199; Fleming B. T. A. Hausman B. T. A. v. Commissioner, 419; Commissioner, 9 B. Brehmer v. T. A. 9 B. T. A. 423; v. 1226; Wolfermann v. Com Commissioner, 9 B. T. Hicks A. 285; 10 B. Illinois Merchants Trust missioner, T. A. Co. Com v. v. missioner, 818; Bishop Commissioner, 130; 12 B. T. 14 B. T. A. A. 1418; v. Commissioner, Commissioner, Fincham 16 B. A. Hunt T. 624; Siegel 683; Commissioner, B. T. A. A. Polk B. T. Miles, Fidelity Lucas, 175; Columbia Trust 268 Fed. & Co. v. F. T, (2d) 146; Appeal Starck, B. A. 514. *29 place the donor would estate of to the gifts of the that the total so higher brackets, in the gifts tax on the much have been collected is might tax that amount of the on the have been payable would than the tax that larger they of which from estates separately considered gifts that cases inferable fairly It is also had part. been of the portion a small only constitute litigated actually years within two made large gifts were which instances death. the donor’s of the admin- details many are but a fеw These of Con- the conclusion the Act supporting istration of and of money amounts large committees that gressional operation from the being were withdrawn inter vivos circumstances under by gifts tax estate all for the would gifts indicated that but clearly which that and estates, as a of the donor’s part have been taxed had gifts number and amount of such far greater years. by persons two of death been made within age. advanced objectionable, if is not so because
The present made the intention of donor is not basis motive or it not tend It is not because does the classification. so evil aimed at. It is to or for the prevent compensate effectively stopped the revenue leak will not be so because within in the tax all two by including estate and years Legislation accomplish end, of death. be dismissed reasonably adapted it, summarily cannot Nor deemed arbitrary capricious. can being Congress invalid on the acted arbi- assumption all drawing the line between made within trarily of death and made before. Congress two those can- rigidly taxing held to a choice between all gifts not be rеgardless necessities taxing none, practical avoidance, regardless experience preventing and expense administering convenience practical clause of equal protection Even the the Four- the tax. impose any deemed to has not been teenth Amendment inflexible rule of taxation. such recog involves the classify power very power degree between those distinguish differences in nize and remote from are near and those which are which things at; Fuller, Telephone Co. aimed Citizens’ object *30 236 U. 384. 373, Miller v. S. 322; Wilson, 229 S. see U. to that a anyone suggest occurred to state never It age age fix .consent, could not, statute, conveyance, although to make á will or competence as competent within class selected included some than some who are excluded. competent be less might police may classification be power, exercise of the amounts where numbers or the distinction on mere based subject to classification appropriately the class between n .and regulation, for one of degree.23 not chosen is by general be levied there is a rules, all taxes must
As
framing
for
action in
revenue
legislative
larger scope
still
Amendment,
under the Fourteenth
with
even
its
iaws,
equal
laws. The
protection
legis
guarantee
Magoun
exemptions.
v. Illinois Trust
may grant
lature
300; Hope Natural Gas
Bank, 170 U. S.
Savings
283,
&
289; Missouri
Hall,
Dockery,
274 U. S.
v.
191
v.Co.
impose graduated
on
may
gifts,
165.
taxes
S.
It
U.
Bromley McCaughn,
income.
280
or on
v.
inheritances,
Moore, 178 U. S.
Brus
124;
41, 109;
Knowlton v.
U. S.
Co.,
1, 25;
240
S.
see also
Union
U.
haber v.
R.
Pacific
23
272;
Rock,
276 U. S.
v. Little
237
Schoene,
Reinman
Miller v.
Swasey, Consider
171;
U. S. 91.
also Euclid
v.
U. S.
v.
Welch
365;
272 U.
Co.,
Ry.
S.
Realty
K & T.
Missouri,
Ambler
Co. v.
267; Murphy
623;
California,
v.
U. S.
194 U. S.
May,
Keokee
227. And see
Taylor,
Coke Co. U. S.
Consolidated
dissenting opinion
cases collected
footnote 1 of the
particularly the
Mr.
Brandéis in Louisville Gas & Electric
Justice
Co. Coleman,
.
277 U. S.
42-44
It
137.24
a tax
Riley,
may
268 U. S.
impose
Stebbins v.
than
ownership
on
chain stores
heavily
more
that falls
Tax
of a
number. State Board
smaller
ownership
on
Jackson, 283 U. S.
Great Atlantic
527;
Commissioners
gen-
Maxwell, 284
And
Co. v.
U.
&
Tea
Pacific
create classes for taxation wherever there
it
erally may
judgment
differences
legislative
is basis for the
in kind.25
differences
degree produce
admittedly
here
to
on
being
impose
The purpose
.tax
making gifts
inter
the ex-
vivos—to
privilege —that
substantially
exercise
impairs
operation
its
tent’that
for
estates,
Congress
it
to say
of the tax on
was
how
far
and how
it
impairment,
necessary
far that
extends
taxation of
either
in the
or to
go
prevent
for it. Unless the line it
draws
so wide
compensate
to have no relation to the
palpably
of the mark
end
power
is not
it
sought,
judicial
reject
another, or
say
that no line
may
substitute
drawn.
graduated
types
upheld
have
taxes
been
Other
Clark v.
*31
331; Metropolis
Titusville,
329,
U. S.
Chicago,
184
Theatre
Co.
v.
And
61, 69-70.
see
Commission,
228 U. S.
Salomon
State Tax
v.
Keeney
222
484;
York,
525,
New
536; McCray
278 U. S.
v.
U. S.
v.
States,
27.
United
195 U. S.
also
Anderson,
McKenna v.
See
31 F.
(2d) 1016,
869;
S.
Couthoui,
den.
U.
cert.
F.
States,
Inc. v. United
.
(2d)
den.,
158,
post, p.
54 F.
cert.
548
classification
dependent
Instances of
for taxation
on numbers or
Quong Wing Kirkendall,
amounts are
59;
v.
223 U. S.
Citizens’ Tele
phone
Fuller,
Co. v.
donor’s death, than that made has no more force the donor’s made within two years the selection taxation compensates of the tax is that it of death. Since basis since it for the drain on the is paid estate estate, which compelled pay donor’s would otherwise death, object the whole tax on transmission at estate if tax on the would be defeated levied on of the of a determining another basis. reasonableness is one, another, is levied lieu of which, it like necessary to all the affecting statutes course consider matter. Interstate Busses subject Corp. Blodgett, 245; & Mechanics Savings 276 U. S. Farmers Bank v. Minnesota, S. 529. Where the very purpose U. compensatory of thе one tax is that it is justification other, objection it is no that the is for the loss other, equivalent avoiding made the exact thus under which, circumstances, some inequality might be ob See General American Tank jectionable Car Corp. . 367. No one has yet indicated Day, precisely U. of- the tax measuring this method works way in what hardship than the tax on It injustice estates. greater where, here, the tax certainly greater from paid who, regardless of the donor his age, giving estate after statute was his force, his took away death within two would bring it into chances - for taxation where would if have been éstate his States, See Milliken not been made. v. United had gift A very different case would be' pre supra, pp. if the taxed were made before the enactment sented taxiing many statute and before the years, *32 ‘ Bowers, 12 (2d) 625, F. 630.26 in Frew v. See Nichols sought to on In this case the Government collect tax a trust and passed, years estate tax was twelve before the before created The of the estate tax to application Coolidge, supra. v. mentioned the Act gift inter vivos types the other made though even was uniformly upheld, beеn Milliken United years before death. more than two Deposit v. Dime Trust and States, Phillips supra; Safe States, Reinecke v. United Co., Tyler supra; supra; Bowers, Co., supra. supra; Northern Trust Taft all contem- I that on say cannot on all' death, imposed supplemented that plation of death, is not adapted others made within two The object. history litiga- legislative a legitimate contemplation to which oyer gifts made in tion Congressional made, reports has been reference investigation prepared Committees after extensive I find no indicate that it is. can aid, plainly expert with invalid. The saying reason for tax is adequate me on seems to to rest no-substantial validity of its denial arbitrary itself an unreasonable to be ground and Federal Govern- sovereign power restriction of.the neither words of the Fifth tax, for which ment judicial interpretation of nor it affords Amendment justification. answered the negative. should be questions joins this opinion. Brandéis
Mr. Justice Judge Hand, concurring, said, p. Learned death. 630: the settlor’s “ effect, nothing made after law went into I transfers have As to may insist take their say; one that settlors chances. But as to appears passed the law made before was the result is those There are settlements which too whimsical stand. the settlor years.” for 30 outlives