The Federal Estate Tax
History, Law, and Economics
216 pp., 6 x 9 in, 10 figures
- Published: September 10, 2019
- Published: August 16, 2019
A comprehensive and accessible account of the U.S. estate tax, examining its history and evolution, structure and inner workings, and economic consequences.
Governments have been levying some form of inheritance tax since the ancient Egyptians did so in the seventh century BC. In the United States, the federal government experimented with various forms of inheritance taxes, settling on an estate tax in 1916 and a gift tax in 1932. Despite this long history, there are few empirical studies of the federal estate tax. This book offers the first comprehensive look at U.S. estate and inheritance taxes, examining their history and evolution, structure and inner workings, and economic consequences. Written by David Joulfaian, a veteran economist at the U.S. Department of the Treasury, the book provides accessible accounts of such topics as changes in tax laws, issues of equity, the fiscal contribution of the estate tax, and its behavioral effects.
Joulfaian traces the evolution of U.S. inheritance taxes from 1797 to the present, noting that the estate tax rate and base expanded through 1976, then began to decline. He describes the tax itself, explaining that it currently applies to estates and gifts in excess of $11.18 million, and outlines applicable deductions and credits. He sketches a profile of taxpayers and their beneficiaries; surveys the revenues from estate and gift taxes; and discusses the effect of estate taxation on labor decisions, saving and wealth accumulation, charitable giving, life insurance ownership, and other economic activities. Finally, he addresses criticisms of the estate tax and analyzes its shortcomings. Accompanying tables present a wealth of data gathered by Joulfaian in his research and not available elsewhere.
This is the most comprehensive and thoughtful treatise on estate taxation written in the twenty-first century. Joulfaian judiciously and perceptively summarizes all of what is known about what might be America's most controversial Federal tax.
Lawrence H. Summers, Charles W. Eliot University Professor and President Emeritus, Harvard University
A treasure trove of information on the history, revenue effects, legislative debates, and behavioral consequences of the estate and gift tax by one of the nation's leading, most experienced, and informed experts on the subject. No one—and, I mean, no one—should propose legislation, perform research, or simply try to understand taxes on the wealthy without this book on the top of the desk.
Eugene Steuerle, Cofounder, the Urban-Brookings Tax Policy Center; author of Dead Men Ruling
This important book brings together many empirical studies to provide a clear and exhaustive review of economic analyses pertaining to the estate tax. It artfully weaves the empirical studies into a comprehensive tapestry presenting several key insights. The result is an invaluable resource for all policy makers and analysts.
James Repetti, William J. Kenealy, SJ, Professor of Law, Boston College Law School
At a moment of active policy debate on wealth inequality and its intergenerational transmission, this volume offers the definitive account of the U.S. estate tax. Comprehensive data analysis supports a careful assessment of how the tax affects incentives for wealth accumulation. Any researcher or policy analyst interested in wealth inequality or wealth taxation will learn a great deal from this timely volume.
James Poterba, Mitsui Professor of Economics, MIT; President, National Bureau of Economic Research