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Jewish World Review
Jan. 23, 2006
/ 23 Teves, 5766
Rabbi Dr. Asher Meir
Is it proper to tax bequests?
Q. Is it fair to tax bequests?
A. Estate taxes are among the most controversial
levies in our economy.
Many people believe they are the ideal tax. Middle
class individuals earn
most of the income, because they are most of the
people. But their share of
bequests is far lower, since by definition only
wealthy people accumulate
large fortunes. So bequest taxes are a highly
progressive tax, meaning that
wealthy people pay a larger share.
Furthermore, many people view it as a tax on unearned
income, since the heirs didn't do anything to deserve
it. So it is also a fair tax.
Finally, the assumption is that people accumulate
money mostly to enjoy the well-being or the honor and
power it confers, so that taxing estates doesn't
discourage initiative very much. So it is also an
Other people view the estate tax as the most unfair
tax possible. Government has a right to tax economic
activity, since they contribute to its productivity.
So personal and business income taxes are acceptable.
But after all these taxes have been paid, what right
does the government have to tax the same money yet
again, merely because the original earner has passed
Bequests are further viewed as one of the main
incentives for earning and saving. These individuals
view an estate tax as something close to arbitrary
From all the sources I have found, the Jewish view is
closest to the first approach, the one that
legitimates inheritance taxes.
It is true that our law gives bequests a special
status. We find this in
the Torah (bible), which warns a father not to discriminate in
the son of a less-favored wife (Deuteronomy 21:17). We
find in later legal
sources that a son is like a continuation of the
father, so that a bequest
is not considered completely like a transfer. Finally,
we find that the
Code of Jewish Law rules that the best policy is to
leave most of the
estate to the offspring, leaving a meaningful minority
for charity. (1)
However, as we wrote in a previous column, Jewish
tradition does not particularly encouraging saving up
specifically in order to bequeath property to
offspring. "Rav said to Rav
Hamnuna, If you have wealth, enjoy it. For there is no
enjoyment in the
grave, and no leisure after death. And if you should
say, I must leave it
to my children… people are like plants: as these
wilt." (2) Rather than hoarding, parents should help
their children to the
best of their ability during their lifetimes;
ultimately, it is the
responsibility of the child to find a flourishing
And the custom has been to consider bequests as income
for all practical
purposes, especially as relates to tithes and communal
taxes. For example,
the renowned Enlightenment authority Rabbi Yeshahayu
Horowitz writes: "Even
if the father was scrupulous his whole life to give
tithes, even so now
that the son has acquired [the property], why
shouldn't he take tithes from
what G-d has given him? (3)
Leaving bequests is an honored tradition in Judaism,
and it is certainly
proper for parents to help their children while they
leave and also
ultimately as they leave this world for the next. A
inheritance tax would certainly interfere with this.
At the same time,
estates have never been seen as the main reason for
accumulation, and modest taxes and tithes on estates
have been long sanctioned.
SOURCES: (1) Rema, Choshen Mishpat 282 (2) Eiruvin 54a. (3) Shela
Laws of Charity and
Tithes; see also Aruch HaShulchan, Yoreh Deah 249:6.
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THE JEWISH ETHICIST, NOW IN BOOK FORM
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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan
administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology.
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