Another Analysis of Batchelder’s Inheritance Tax Proposal

Aviva Aron-Dine (attorney) recently published her article entitled Trade-offs in Choosing Between an Estate Tax and an Inheritance Tax, 63 Tax L. Rev. 265 (2009).  An excerpt from her article is below:

My conclusion is that we may face a difficult tradeoff here. On the one hand, Batchelder convincingly argues that an inheritance tax better measures ability to pay and so is fairer on its own terms. On the other hand, the incentives it creates would tend to shrink the wealth transfer tax base. And the opportunity cost of the lost revenue, measured in terms of how it could have been used to promote equality of opportunity or outcomes, may be larger than the impact of the switch to an inheritance tax.