Abstract

The Tax That Doesn't Tax

The article throws light on inheritance taxes in the U.S. Americans believe that inheritance taxes have seriously curtailed the practice of transferring fortunes from generation to generation, and that the estates of the wealthy are being broken up. The truth is that the yields from current federal estate and gift taxes are trifling. The total of privately owned wealth in the U.S. in 1953 amounted to about $1,000 billion. If this sum devolves once each thirty-three-year generation to the succeeding generation, then about $30 billion is being transferred annually by gift or by inheritance. But the federal yield from estate and gift taxes in 1953 was $891 million. Thus transfer taxed as inheritance and gift taxes are called, collected equaled 2.9 percent of the tax base.