r even exempting them entirely) than those to collateral
relatives.[3]

(3) In exempting legacies below a certain amount.[4]

(4) In having rates progressing with the size of the legacy; (this
feature is less general, but is prominent in most of the later laws).

Sec. 2. #Fiscal importance of inheritance taxes.# The fiscal importance
of inheritance taxes has been comparatively not very great (except in
New York State), but it has rapidly grown. In 1903 the receipts from
this source (in 27 states) were over $7,000,000; in 1913 they were (in
35 states) $26,000,000. The spread of inheritance taxes and the higher
and progressive rates applied are an expression in part of the need
of additional revenues and in part of the growing popular concern
regarding the concentration of wealth. Yet the actual legislation is
something of a compromise between fiscal policy (to get revenues) and
social policy (to reduce or to distribute the larger fortunes).[5] In
New York legacies of over $1,000,000 are now taxable at 4 per cent
to relatives in the direct line and to all others at 8 per cent. In
Washington the tax to relatives in the direct line is but 1 per
cent, but to others it may go as high as 12 per cent on legacies over
$100,000. In Wisconsin, somewhat similarly, the tax may rise to 15 per
cent on the excess above $500,000.

Sec. 3. #Income taxes; general nature.# All taxes, whether assessed upon
the capital value of goods or not, come out of (reduce) the incomes
now or later available for individuals. But there are various ways
of attacking incomes, i.e., of apportioning the tax burden. Income
taxation is that form in which the basis of the assessment and levy
is the income of the taxpayer as it arises (not accumulated wealth,
or capital, or business processes, or expenditures). Of the various
conceptions of income[6] the one mainly employed in income taxation
is monetary income arising in the course of business, supplemented
occasionally (but not consistently) by some items of material income
that are expected to come to the person. There is not in the long run
such a contrast between wealth taxation and income taxation in their
ultimate burden and effect as is usually supposed.

Indeed wealth (or capital) taxation as applied to accumulated wealth
is more far-reaching than income taxation, for it falls upon the
present worth alike of monetary and of psychic incomes (e.g., the
value of a house whether it is let to a tenant o