Why Tax Wealth Transfers?: A Philosophical Analysis

INTRODUCTIONShould we still, in 2016, upon the one-hundredth anniversary of the estate tax in the United States, ask the question, "Why tax wealth transfers?" Is the answer merely one of political exigency? A leftover set of arguments from the early twentieth century? Or is there new evidence? Are there reasons why, in 2016, scholars and elected officials should consider wealth transfer taxation as an essential part of any coherent tax policy? And further, if this form of taxation is economically or philosophically important, is it also politically feasible? Are there reasons to think that the American public would endorse a healthy estate tax, bringing the purview of the tax back to its pre-2001 levels, and strengthening it against aggressive tax planning strategies that threaten to eviscerate the tax base? And if such endorsement is possible, how best to present the tax? What arguments demonstrate the tax's position in an ideal tax system, designed to enact the most commonly endorsed principles of fairness and justice? A glance at the current state of the U.S. federal wealth transfer tax system might lead one to conclude that, even were it desirable, saving the estate tax might be impossible. This Article, however, outlines reasons to believe that a more robust wealth transfer tax system, although not necessarily in the form it currently takes, is an essential component of a comprehensive progressive tax system aimed at increasing economic equality in this country. Further, this Article demonstrates that wealth transfer taxation is consistent with most commonly held philosophical-political views, when those views are examined and their logical consequences identified.Philosophy as a subject matter is most commonly relegated to the hallowed halls and ivory towers of universities. An individual might dabble in Nietzsche or Plato as an eighteen-year-old, but most people leave philosophy behind when choosing a career, a life plan, or moving on to the postcollege "real world." This is unfortunate. Philosophy represents civilization's greatest tradition of thoughtful contemplation about life's most important questions, including, among other things, how best to structure society. One element of the structuring of society is the design of a tax system, and philosophy has, historically, had something to say about tax design.1But beyond specific recommendations regarding best practices in tax design, philosophy can help us think through the consequences of the particular philosophical views that individuals articulate. For instance, if an individual believes that property rights are fundamental and argues for the preeminence of property rights over all other elements of structural design in society, what consequence should that claim have on the tax system? Is such a belief consistent with social life? Should we interpret the claim in a way that makes it consistent with that individual's lived experience? If the individual lives in society, benefitting from the advantages that come from that life, should we understand the claim of priority for property rights differently than we would understand the claim if the individual chose to live off the grid, rejecting the benefits attributable to social life? In addition to understanding the consequences of particular claims, philosophical analysis allows us to identify what structural components might be endorsed by a variety of belief systems.This Article begins from this point, applying philosophical analysis to the question of wealth transfer taxation. It demonstrates that, despite the political opposition to the current U.S. federal estate tax, a robust wealth transfer tax system is, in fact, consistent with most philosophical views about property rights, social rights and obligations, social opportunity, and government responsibilities. At the center of this argument is the claim that political expressions of social will, especially to the extent they must be reduced to a preference for "Democrat" or "Republican," do not accurately represent the complex of ideas addressed by the taxation of wealth transfers. …