Taxing Inherited Wealth: A Philosophical Argument (original) (raw)
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Death by a thousand cuts: The fight over taxing inherited wealth
2006
The federal estate tax has been on the books for nearly 90 years. Although it raises relatively little revenue and affects only the richest 1 or 2 percent of the population, the estate tax has traditionally been viewed by its supporters as an emblem of the American commitment to progressive taxation and equal opportunity. Yet in recent years the estate tax has become widely unpopular, and in 2001 Congress voted to repeal it, albeit only in 2010 and only for one year. Professors Michael Graetz and Ian Shapiro have written an important new book about the campaign for estate tax repeal and its implications for the ongoing debate over federal tax reform. In Death by a Thousand Cuts: The Fight Over Taxing Inherited Wealth (Princeton, 2005), Graetz and Shapiro pose three central questions: (1) How did the estate tax become so unpopular? (2) Why was there no organized and effective resistance to the campaign for repeal? (3) How did the groups opposed to the estate tax manage to remain united, despite internal tensions, in holding out for complete repeal rather than settling for a pragmatic compromise? In exploring those questions, Graetz and Shapiro, drawing on their backgrounds in tax policy and political science, have undertaken a major research project, including interviews with many of the key players. The result is a fascinating glimpse into the workings of American politics in "the age of polls, sound bites, think tanks, highly organized membership organizations, and single-issue coalitions." The book is engaging, enlightening, and thought-provoking. Graetz and Shapiro's writing sparkles with subtle wit and their story moves with the fast pace of a best-selling thriller, but their message is deadly serious.
J.S. Mill on the Income Tax Exemption and Inheritance Taxes: the Evidence Reconsidered
1996
A succession duty is the most unobjectionable mode of [statically and intertemporally redistributing wealth]. .. because in that way it is confined to hereditary wealth. I think you must allow people to retain the full advantage for their lives of what they have acquired; but the State may deal with it on the occasion of succession. I certainly do think it fair and reasonable that the general policy of the State should favour the diffusion rather than the concentration of wealth.
The Abolition of Wealth Transfer Taxes: Lessons from Canada, Australia and New Zealand
SSRN Electronic Journal, 2005
AssociateProfessor, FacultyofLaw, University ofToronto. I am indebted to AssafLikhovski, AlanMacnaughton, Richard Schmalbeck andLarry Zelenak forhelpfulcommentson earlier drafts. Iam also indebtedto Doug Robertson, a J.D. studentatthe Universityof Toronto FacultyofLaw, for excellent research assistance.and to the Social Science andHumanities Research Council of Canadafor financial support I wouldalso like to thank participants at the Tel Aviv Tax Policy workshop. 4 (2005). For a recent argument that Congress might benefit from uncertainty regarding repeal of the federal gift and estate taxes, see Edward 1. McCaffery & linda R. Cohen, Shakedown at Gucci Gulch: A Tale ofDeath, Money and Taxes (Univ. S. Cal. Law & Econ. Research Paper No. 04-20, 2004), available at http://ssrn.com/ahsUact==-581084\. 3. See ORO. FORECON. COOPERATION & DEV., REVENUE STATISTICS OF O.E.C.D. COUNTRIES (2003) [hereinafter O.E.C.D.]. In 1972, estate and gift taxes accounted for 23% of total revenues in the United Kingdom and 0.7% of gross domestic product; in 2002, these figures were 0.6% and 0.2%, respectively.
2018
Diese Studie befasst sich mit verschiedenen Erbschaftssteuermodellen, die in ausgewählten europäischen Ländern und den Vereinigten Staaten Anwendung finden. Dabei zeigt sich, dass der Großteil der Länder bei der Höhe des angewandten Steuersatzes die Beziehung zwischen Erben und Erblassern und auch das Ausmaß der Erbschaft berücksichtigt. Speziell der intergenerationale Transfer innerhalb der Familie wird durch niedrigere Steuersätze und höhere Freibeträge steuerlich begünstigt; darüber hinaus insbesondere Betriebsvermögen und Eigenheime. Des Weiteren werden in der Analyse unter anderem Verteilungseffekte und Steueraufkommenspotentiale der verschiedenen Erbschaftssteuermodelle beleuchtet. Obwohl die Länder derzeit relativ geringe öffentliche Einnahmen durch die Erbschaftssteuer erzielen, lassen das Wachstum des privaten Vermögens und dessen Konzentration auf ein höheres Einnahmepotential in Zukunft schließen. Overview: This article provides an overview of different inheritance tax regimes in selected European countries and the United States. We identify that in the majority of countries the tax rate is related to the relationship between bequeather and inheritor as well as the value of the inherited assets. In most countries the transfer of wealth within families is treated preferentially (lower tax rates, tax exemptions and reliefs). This is particularly the case for business assets and family homes. This analysis further discusses the features and effects of inheritance tax regimes based on various criteria. These cover behavioural responses of individuals and different distributional effects of an inheritance tax. Furthermore, the amount of tax revenues varies considerably between countries and over time. Although the actual revenues of inheritance taxation are quite low in the selected countries (ranging between 0.1% and 0.5% of GDP), some indicators point to higher revenue potentials in the future. Due to an increase in private wealth and its concentration over time, we can expect to observe an increase in inheritance tax revenues, even though countries allow high inheritance tax-free 2 amounts. An appropriate design of inheritance taxation could further help to foster economic growth and decelerate the increase in wealth inequality.
Chapter 1 Inheritance Taxation: Redistribution and Predistribution
Research on Economic Inequality
It is well known that taxes on the transfer of wealth typically raise very little revenue. However, this does not mean that they are ineffective as tools for redistribution. In this paper we show how important such taxes can be in the long-run distribution of wealth, reducing equilibrium inequality (the "predistribution" effect) by a much larger amount than what is apparent in terms of the immediate impact of the tax (the "redistribution" effect).
Inheritance, opportunity and liberty: Are hereditary wealth transfers legitimate under liberalism?
Revista de Informação Legislativa, 2023
This paper discusses the morality of the right of inheritance from a liberal perspective. It focuses on two liberal values: equality of opportunity and liberty. First, it argues that inheritances disturb equality of opportunity, as interpreted by John Rawls and Ronald Dworkin in their respective theories of justice. Because both authors prioritize leveling opportunities over other distributive considerations, they cannot coherently assert that inheritances are just. Second, it argues that any plausible conception of liberty must be justified in moral terms, so that one cannot argue in favor of inheritances simply because restricting it would decrease people's freedoms. It then insists that there is no morally justifiable basic freedom of inheritance. Finally, it acknowledges that abolishing inheritances is not a feasible goal on the short term. As a policy proposal, it suggests strengthening inheritance taxation instead, and illustrates how that could be done in the Brazilian case.
Optimum Taxation of Inheritances
SSRN Electronic Journal, 2000
ABSTRACT We incorporate the fact that inheritances create a second distinguishing characteristic of individuals, in addition to earning abilities, into an optimum income taxation model with bequests motivated by joy of giving. We show that a tax on inheritances and a uniform tax on all expenditures including bequests are equivalent and that either is desirable, according to an intertemporal social objective, if on average high-able individuals have larger inherited endowments than low-able. We demonstrate that such a situation results as the outcome of a process with stochastic transition of abilities over generations, if all descendants are more probable to have their parent’s ability rank than any other.
Inheritance tax regimes: a comparison
Public Sector Economics
This paper provides an overview of different inheritance tax regimes in selected European countries and the United States. We show that in the majority of countries the tax rate is related to the relationship between testator and the beneficiary as well as the value of the inherited assets. In most countries the transfer of wealth within families is treated preferentially (lower tax rates, tax exemptions and reliefs). This is particularly the case for business assets and family homes. The analysis further discusses the features and effects of inheritance tax regimes, which include behavioural responses of individuals and different distributional effects of an inheritance tax. Although the actual revenues of inheritance taxation are quite low in the selected countries, some indicators point to higher revenue potentials in the future. An appropriate design for inheritance taxation could further help to decelerate the increase in wealth inequality.
Egalitarianism, Inheritance, and Taxation: On Daniel Halliday’s The Inheritance of Wealth
Law, Ethics and Philosophy, 2021
This paper offers a critical response to Daniel Halliday's recent book The Inheritance of Wealth: Justice, Equality, and the Right to Bequeath. It explores how background institutional arrangements affect the justification of any right of persons to bequeath wealth and suggests that the right to bequeath is weaker and more qualified than Halliday allows. The paper also examines the variety of egalitarian justice that Halliday adopts in the course of developing his novel treatment of inheritance taxation and raises some concerns about Halliday's formulation and interpretation of egalitarian justice. The egalitarian credentials of the Rignano scheme of inheritance proposed by Halliday are probed and the normative significance of the coercive dimension of inheritance tax is considered.
Journal of Applied Philosophy, 2019
Inherited wealth will be of increasing importance in years to come. Yet inheritance taxation is unpopular, and part of this unpopularity is due to family concerns. Such taxation is seen by many as morally problematic because it is taken to violate important family values. In this article, we explore five family arguments against inheritance taxation: firstly, whether we have a right to benefit our children; secondly, whether it is a virtue to benefit one's children; thirdly, whether children have a right to their parent's belongings, due to common ownership; fourthly, whether inheritance taxation may impair a vital sense of continuity and belonging; and lastly, an argument from incentives that appeals specifically to the relation between parents and children. We conclude that none of the arguments provide strong objections against a moderate or even a high inheritance tax rate, at least not when special provisions are made for things like family houses or farms. However, since the arguments all introduce concerns that should be assigned some weight, it would be unjust to abolish inheritance entirely.