New Rationale and Design for Taxes on Gratuitous Wealth Transfers

Abstract

In this Article, the author argues that a distinct tax on gratuitous wealth transfers cannot be justified under the traditional narrative of curbing wealth concentration and taxing windfalls because these goals can be achieved under the income tax and a wealth tax. Furthermore, equal opportunity is a noble goal, but a wealth transfer tax is not the appropriate measure to achieve it. Rather, the author argues, wealth transfer taxes can be used, on the one hand, to promote intergenerational justice especially by conceiving them as a gift to the new generation. On the other hand, they can ameliorate intragenerational injustices between people receiving nothing and people receiving something and between people receiving something and other people receiving even more. This hybrid nature of wealth transfer taxes calls for a New Generation Tax (NGT), an estate tax with unique features taking into account the new rationale that the author gives to wealth transfer taxes.