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DEATH AND TAXES: A LIBERTARIAN REAPPRAISAL
Published online by Cambridge University Press: 14 August 2023
Abstract
Imagine two friends. Anna inherits nothing and works for every penny she has, while Mary inherits millions. How should a world that respects individual autonomy and private property rights treat Anna’s earnings and Mary’s inheritance? Should it tax them the same, or tax one more heavily than the other? If the latter, which one? The conventional wisdom holds that although some “right” libertarian theories justify taxing income, none justify taxing inheritances. Such taxes are “expropriations” and “an especially cruel injury” that “run[] roughshod over [a] deceased’s interest in the ends his property will serve.” This essay explores the standard libertarian objections to taxing gifts and bequests and argues that libertarians overstate their case when distinguishing the taxation of gratuitous transfers from other types of taxation. At minimum, the benefit theory of taxation embraced by many minimal statists and classical liberals mandates that the receipt of gifts and bequests should be taxed to the recipient. Moreover, the goals of curbing inherited political power and preventing wealthy families from insulating their members from market competition provide two additional explanations for why taxing inheritances to recipients is compatible with classical liberal values.
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- © 2023 Social Philosophy & Policy Foundation. Printed in the USA
Footnotes
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School of Law, The University of San Diego, mirandafleischer@sandiego.edu. Competing Interests: The author declares none. Thanks to Susie Morse, Shu-Yi Oei, Jim Repetti, Diane Ring, David Schmidtz, David Walker, Matt Zwolinski, the participants in the Boston College Tax Policy Workshop, and the other contributors to this volume.
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