the extent to which the Pollock decision
had been whittled down by the time the Sixteenth Amendment was adopted
is found in Billings _v._ United States.[1507] In challenging an annual
tax assessed for the year 1909 on the use of foreign built yachts--a
levy not distinguishable in substance from the carriage tax involved in
the Hylton case as construed by the Supreme Court-counsel did not even
suggest that the tax should be classed as a direct tax. Instead, he
based his argument that the exaction constituted a taking of property
without due process of law upon the premise that it was an excise, and
the Supreme Court disposed of the case upon the same assumption.

In 1921 the Court cast aside the distinction drawn in Knowlton _v._
Moore between the right to transmit property on the one hand and the
privilege of receiving it on the other, and sustained an estate tax as
an excise. "Upon this point" wrote Justice Holmes for a unanimous court,
"a page of history is worth a volume of logic."[1508] This proposition
being established, the Court has had no difficulty in deciding that the
inclusion in the computation of the estate tax of property held as joint
tenants,[1509] or as tenants by the entirety,[1510] or the entire value
of community property owned by husband and wife,[1511] or the proceeds
of insurance upon the life of the decedent,[1512] did not amount to
direct taxation of such property. Similarly it upheld a graduated tax on
gifts as an excise, saying that it was "a tax laid only upon the
exercise of a single one of those powers incident to ownership, the
power to give the property owned to another."[1513] In vain did Justice
Sutherland, speaking for himself and two associates, urge that "the
right to give away one's property is as fundamental as the right to sell
it or, indeed, to possess it."[1514]

Miscellaneous

The power of Congress to levy direct taxes is not confined to the States
which are represented in that body. Such a tax may be levied in
proportion to population in the District of Columbia.[1515] A penalty
imposed for nonpayment of a direct tax is not a part of the tax itself
and hence is not subject to the rule of apportionment. Accordingly, the
Supreme Court sustained the penalty of fifty percent which Congress
exacted for default in the payment of the direct tax on land in the
aggregate amount of twenty million dollars which was levied and
apportioned among the States during the Civil War.[1516]