Choosing between an Income Tax and a Wealth Transfer Tax

Posted: 8 Jan 2002

See all articles by David Joulfaian

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

Abstract

This paper traces the implications of replacing the estate tax with a basis carry over regime under the income tax. Such changes are likely to level the playing field and generally extend uniform tax treatment to gifts and bequests, spousal bequests and bequests to children, gains realized during life and those held at death, and deaths in community property versus non-community property states, among others. Relative to current law, these changes may have the effect of reducing spousal bequests in favor of direct transfers to the children, and discouraging lifetime gifts in favor of bequests as well as borrowing to finance consumption.

Suggested Citation

Joulfaian, David, Choosing between an Income Tax and a Wealth Transfer Tax. National Tax Journal, Vol. 54, No. 3, pp. 629-43, September 2001. Available at SSRN: https://ssrn.com/abstract=296144

David Joulfaian (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States

Georgetown University - Department of Economics ( email )

37th St NW & O St NW
Washington, DC 20007
United States

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