As a source of revenue, transfer taxation is relatively unimportant. In 1976 transfer taxation accounted for only $5 billion out of total revenues of $300 billion. The primary support for transfer taxation derives from the belief that it is a valuable means of promoting equality in the distribution of wealth. Supporters of transfer taxation believe that the normal outcome of a market economy is increasing inequality in the ownership of wealth and the receipt of income; transfer taxation is seen as a mechanism for offsetting this presumed cumulative process. This chapter explores from several perspectives the egalitarian imperative that has dominated the literature on transfer taxation.
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Notes and references
- 3.For documentation to the effect that failure to consider the relation between age and income overstates the degree of inequality by about 50 per cent, see Mortin Paglin, ‘The Measurement and Trend of Inequality: A Basic Revision’, American Economic Review, 65 (Sept. 1975), pp. 598–609.Google Scholar
- 7.See, for instance, the following articles in the Quarterly Journal of Economics: Ray C. Fair, ‘The Optimal Distribution of Income’, 85 (Nov. 1971), pp. 551–79Google Scholar
- Edmund S. Phelps, ‘Taxation of Wage Income for Economic Justice’, 87 (Aug. 1973), pp. 331–54Google Scholar
- Lester C. Thurow, ‘The Income Distribution as a Pure Public Good’, 85 (May 1971), pp. 327–36.Google Scholar
- 17.Lowell E. Gallaway, ‘On the Importance of “Picking One’s Parents”’, Quarterly Review of Economics and Business, 6 (Summer 1966), pp. 7–15.Google Scholar
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