Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Saturday, September 30, 2023

Inheritance tax debates overlook the psychology of the thing

Estate planningInheritance taxes have evolved beyond political associations. Some countries with competitive tax systems, like the United States and Ireland, have high inheritance tax rates, while India, China, and Russia, with diverse political systems, have a zero rate. This shift highlights that so called "death taxes" are no longer tied to political ideology, despite their historical links.

Inheritance and estate taxes are widely considered unfair, with a recent survey ranking them as the most unfair tax. However, very few deaths trigger an inheritance tax. For example, less than 4 percent of deaths in the UK result in an inheritance tax charge. These taxes are often ineffective revenue sources for governments because they are full of exceptions, and the wealthy can usually avoid them. In the UK, these taxes contribute less than 1 percent of tax revenues; in the US, federal estate taxes make up only 0.4 percent of government revenue.

However irrelevant inheritance taxes may be in the economic scheme of things, they excite us due to their close association with two themes that dominate our lives: mortality and family.

For more information see Stuart Kirk “Opinion: Inheritance tax debates overlook the pyscohology of the thing” Financial Times, September 29, 2023.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.


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