Saturday, October 12, 2019

Is the Estate Tax a Good Wealth Redistributer?

The concentration of wealth among the very few is a problem. In a WSJ op-ed ten years ago, Art Laffer argued that estate taxation is not the solution:
Advocates of the estate tax argue that such a tax will reduce the concentrations of wealth in a few families, but there is little evidence to suggest that the estate tax has much, if any, impact on the distribution of wealth. To see the silliness of using the estate tax as a tool to redistribute wealth, realize that those who die and leave estates would be taxed just as much if they bequeathed their money to poor people as they would if they left their money to rich people. If the objective were to redistribute, surely, an inheritance tax (a tax on the recipients) would make far more sense than an estate tax.

1 comment:

Jim Gust said...

Wealth has been concentrated by the changes in the economy, in which a few winners have been remarkably rewarded. It has almost nothing to do with taxation--except, I suppose, that capital gains are not taxable until they are realized. The wealth tax is intended to get around that "flaw."

Estate planners are salivating at the prospect of a wealth tax, at the fees generated by effectively doing an estate tax return every year for the wealthy family.