CHAPTER 9 - Taxation of Capital or Wealth

Abstract

This chapter describes the taxation of capital or wealth. Taxes on wealth transfers consist primarily of death duties and gift taxes that in practice are usually closely integrated with death duties. There is an important distinction between estate duties, levied on the aggregated total of property left at death, and inheritance taxes, where duty is levied on the shares of the property in the hands of the beneficiaries. A capital transfer tax and an accessions tax are more sophisticated versions of an estate duty, and an inheritance tax, respectively. A capital levy is a tax on wealth stock. One shall not be considering a capital levy, but the problems it raises, and its economic effects are very similar to a very heavy annual wealth tax, with the vital difference that a capital levy is an exceptional measure intended for use once only, whereas a wealth tax is a regular component of the tax system.