Divide and Conquer: Using an Accessions Tax to Combat Dynastic Wealth Transfers

34 Pages Posted: 25 Feb 2016

Date Written: February 24, 2016


The current estate tax raises little revenue, yet is ill designed to further the social goals used to justify it. This Article takes one frequently mentioned goal — minimizing dynastic wealth transfers — and explores what insights focusing on that objective yields for the design of the transfer tax system. It starts from the premise that what renders dynastic wealth transfers problematic is that such transfers can bestow upon the recipient unearned political and economic power, which contravenes the democratic ideal that power should be earned, not inherit-ed. Under this view, the tax system should be concerned with neither the build-up of wealth per se nor transfers of wealth that are not large enough to bestow power upon the recipient. Instead, the tax system should be concerned only with transfers of wealth large enough to confer economic and political power on the recipient. The structure that best reflects this concern is a progressive cumulative accessions tax that focuses on the recipient, instead of an estate tax that focuses on the transferor. Each recipient should have an extremely high exemption amount, given that receiving a few hundred thousand or couple million dollars does not give one power. Lastly, there should be no generation-skipping penalty, because what matters is how many individuals have the ability to use the power accompanying the wealth.

Keywords: tax policy, inequality, distributive justice, wealth taxation, equality of opportunity, wealth, wealth transfer taxes, estate taxes, inheritance taxes, plutocracy

JEL Classification: D31, D63, H23, H20, K34, P16

Suggested Citation

Fleischer, Miranda Perry, Divide and Conquer: Using an Accessions Tax to Combat Dynastic Wealth Transfers (February 24, 2016). Boston College Law Review, Vol. 57, 2016, San Diego Legal Studies Paper No. 16-211, Available at SSRN: https://ssrn.com/abstract=2737530

Miranda Perry Fleischer (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
(619) 260-2319 (Phone)

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