Harlan F. Stone

“ It is true that the tax prohibited by the treaty is in terms a tax on property or on its removal, but it is also true that the modern conception of an inheritance tax as a tax on the privilege of transmitting or succeeding to property of a decedent, rather than on the property itself, was probably unknown to the draftsmen of article 7. But whatever, in point of present day legal theory, is the subject of the tax, it is the property transmitted which pays it, as the Iowa statute carefully provides. ”

“ The contention that the present discrimination is not one forbidden by the language of article 7, since the decedent's power of disposal is the same as that of a citizen, leaves out of consideration both the nature of the tax contemplated by the contracting parties and the fact that the treaty provisions extend explicitly to the withdrawal of such property by the alien heir upon inheritance and, as already pointed out, protect him in his right to receive his inheritance undiminished by a tax which is not imposed upon citizens of the other contracting party. ”

“ But, in the present case, the decedent was a citizen of Denmark, owning property within the state of Iowa, and article 7, by its terms, in applicable to charges or taxes levied on the personal property or effects of such a citizen; hence its protection may be invoked here if the discrimination complained of is one embraced within the terms of the treaty.
That there is a discrimination based on alienage is evident, since the tax is imposed only when the nonresident heirs are also aliens. ”