The case for taxing death
How to balance people's desire to bequeath assets with the unfairness of inheritance.
No tax is popular.
But one attracts particular venom.
Inheritance tax is routinely seen as the least fair by Britons and Americans.
This hostility spans income brackets.
Indeed, surveys suggest that opposition to inheritance and estate taxes (one levied on heirs and the other on legacies) is even stronger among the poor than the rich.
Politicians know a vote-winner when they see one.
The estate of a dead adult American is 95% less likely to face tax now than in the 1960s.
And Republicans want to go all the way: the House of Representatives has passed a tax-reform plan that would completely abolish “death taxes” by 2025.
For a time before the second world war, Britons were more likely to pay death duties than income tax; today less than 5% of estates catch the taxman's eye.
It is not just Anglo-Saxons. Revenue from these taxes in OECD countries, as a share of total government revenue, has fallen sharply since the 1960s.
Many other countries have gone down the same path.
In 2004 even the egalitarian Swedes decided that their inheritance tax should be abolished.
Yet this trend towards trifling or zero estate taxes ought to give pause.