Taxation of Wealth Transfers: A Philosophical Analysis

Abstract

Tax policy discussions are dominated by economic theories, and do not often involve philosophical analysis. Because tax is applied distributive justice, it makes sense to bring the insights of philosophy to bear on the work of creating and implementing tax laws. As one model of how philosophy can inform discussions of tax policy, this dissertation looks in particular at the taxation of wealth transfers from three different philosophical perspectives. Because wealth transfer taxes, more than most income or consumption taxes, are enacted primarily to redistribute wealth and to increase equality of opportunity, focusing on these taxes, rather than on the more widely used income tax, allows the analysis to focus on how the tax does or does not comply with the philosophical goals of the society that enacted the rule. In order to evaluate whether a system of wealth transfer taxation is compatible with the philosophical beliefs of contemporary American society, the dissertation examines three commonly held philosophical belief systems: libertarianism, liberalism, and utilitarianism. In each case, after explicating the theory, the dissertation adopts the perspective of that theory to analyze whether a wealth transfer tax system is desirable. Further, the dissertation analyzes what form of wealth transfer tax system is most compatible with the system. The final chapter of the dissertation explores what form of wealth transfer tax system is most compatible with all of the philosophical theories explored in the dissertation.