Reforming Inheritance Policy

Under a national ownership strategy, inheritance policy should be restructured to discourage excessive concentrations of wealth and, in order to promote individual initiative and capital self-sufficiency, to encourage the broadest possible distribution of income-producing assets. Rather than gift and other “death taxes” on the estate (including assets accumulated within proposed Capital Homestead vehicles), taxation on generational wealth transfers should be based on the size of the recipient’s total accumulations after receiving the gift or bequest.

If the value of the recipient’s asset accumulations remains below the exempt level of capital self-sufficiency (e.g., $1 million), no tax would be imposed on the newly acquired assets. Above that exempt level, a reasonable generational asset transfer tax (or a single rate tax on “excess” Capital Homestead accumulations) would be paid. This would encourage the wealthy to spread their wealth among family members, friends, employees, and others they consider worthy, as long as the recipient’s accumulations remain below the statutory exemption.