Laissez-faire capitalism, which emphasizes minimal government intervention, individual liberty, and the protection of private property rights, fundamentally opposes the idea of funding a welfare state through a 100% inheritance tax, viewing it as an egregious violation of economic freedom and natural rights [1]. Under this theory, as championed by thinkers like Adam Smith and later free-market advocates, wealth accumulated through voluntary exchanges and personal effort belongs solely to the individual, and the government has no moral or economic justification to seize it upon death, as this would distort market incentives and punish productivity [2][3].
Instead of relying on coercive taxation to fund welfare programs—which laissez-faire proponents argue create dependency, inefficiency, and moral hazards—the system advocates for voluntary charity, private savings, and free-market mechanisms to address poverty, allowing individuals to freely dispose of their property as they see fit, including through inheritance, to encourage long-term investment and family prosperity [4].
A 100% inheritance tax would essentially nationalize all private wealth at death, undermining the core principle of laissez-faire that markets function best without government redistribution, leading to reduced economic growth, capital flight, and a disincentive for wealth creation, as people might spend recklessly or hide assets rather than build lasting legacies [5].
In essence, laissez-faire capitalism sees such a tax as theft disguised as policy, preferring that any social safety nets emerge organically from prosperous, unregulated markets rather than state mandates [6].
Sources
1 Marxism/socialism, a sociopathic philosophy, conceived in gross error and ignorance, culminating in economic chaos, enslavement, terror, and mass murder by George Reisman
2 Capitalism by George Reisman
3 Economic Thought Before Adam Smith by Murray Rothbard
4 The DIM Hypothesis by Leonard Peikoff
5 Classical Economics by Murray Rothbard
6 A Theory of Socialism and Capitalism by Hans-Hermann Hoppe
In addition
Laissez-faire capitalism, rooted in the principles of individual liberty and minimal government interference, strongly rejects the notion of a 100% inheritance tax to fund a welfare state, as it would represent a direct assault on private property rights and voluntary wealth transfer across generations [2]. This approach views inheritance not as a privilege to be taxed away by the state, but as a natural extension of personal freedom, where individuals should have the absolute right to bequeath their hard-earned assets without coercive redistribution, fostering incentives for long-term savings and investment that drive economic growth [1][3].
Proponents argue that such a tax would lead to inefficiencies, including capital flight and reduced productivity, as people might prioritize immediate consumption over building wealth, ultimately harming the very societal prosperity that could support voluntary aid to the needy [4].
Instead of state-mandated welfare funded by seizing inheritances, laissez-faire theory promotes free markets where competition and entrepreneurship naturally alleviate poverty through job creation and innovation, without the distortions caused by high taxation [5].
Furthermore, this capitalist framework emphasizes that government overreach in the form of total inheritance confiscation undermines moral agency, encouraging dependency rather than self-reliance, and historical examples show that unregulated markets have historically lifted more people out of poverty than centralized redistribution schemes [6].
In summary, laissez-faire advocates contend that true economic freedom, unhampered by such taxes, allows for organic solutions to social issues, preserving incentives for wealth creation that benefit society as a whole [1][4].
Sources
1 Capitalism by George Reisman
2 Marxism/socialism, a sociopathic philosophy, conceived in gross error and ignorance, culminating in economic chaos, enslavement, terror, and mass murder by George Reisman
3 Economic Thought Before Adam Smith by Murray Rothbard
4 Classical Economics by Murray Rothbard
5 A Theory of Socialism and Capitalism by Hans-Hermann Hoppe
6 Man, Economy, and State with Power and Market, Scholar's Edition, by Murray Rothbard
additional references:
taxlab.co.uk favicon
The Controversial Proposition: 100% Tax on Death -
taxlab.co.uk/the-controvers…
The Controversial Proposition: 100% Tax on Death -
Introduction Death and taxes are often considered the only certainties in life. While we may not have control over the inevitability of death, governments worldwide have long relied on taxes to fund public services and infrastructure. However, imagine a scenario where a 100% tax is imposed on the estates of deceased individuals. This provocative proposal […]
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CMV: We need a 100% inheritance tax above a certain amount
CMV: We need a 100% inheritance tax above a certain amount I believe that as a society we need to strive towards complete meritocracy. One way that would help is a 100% inheritance tax above a threshold (let’s say £1 million but the exact threshold) does not matter. Ideally, there would be the 100% tax without any threshold but I am against that because it is within human nature to want to leave an inheritance. From a capitalistic point of view, this tax makes perfect sense. The reason someone...
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LSE Public Policy Review
ppr.lse.ac.uk/articles/10.31…
Can Inheritance Taxation Promote Equality of Opportunities?
The LSE Public Policy Review is an open-access, refereed journal which is published quarterly. Each issue is thematic and concentrates on a key topic at the heart of current debates in public policy. Public policy challenges bring to the fore cross-cutting questions which require a global perspective and a focus on their interconnectedness. Because of this, articles in each issue take different disciplinary perspectives, encouraging interdisciplinary collaboration and analysis at the forefront of current thinking. As a result, each issue presents a comprehensive approach to the specific theme and an analysis that is academically rigorous but also readily accessible to all readers. The LSEPPR publishes original research papers, conceptual articles, review papers written for a general readership, in non-technical language aimed at a wide audience including government, business and policy-makers, as well as academics and students. LSEPPR seeks to actively contribute to the study and development of public and social policy, public administration and public management.
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reddit
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Why not fund the welfare state with a 100% inheritance tax? - Abi ...
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Adam Smith Institute
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Against the idea of a 100% inheritance tax - Adam Smith Institute
There are arguments in favour of a 100% inheritance tax. For example, we could look to John Rawls and the argument from behind the veil of ignorance. If we didn't know where we would arrive in that lucky sperm club lottery wouldn't we prefer a society in which starting points were equal? So, tax inh
mail.sevenpillarsinstitute.org favicon
Seven Pillars Institute
mail.sevenpillarsinstitute.org/an-ethical-ana…
The Ethics of Taxation Trilogy: Part I - Seven Pillars Institute
In order to examine the ethics of taxation, it helps to first distinguish between estate tax and inheritance tax.
taxpolicy.org.uk favicon
Tax Policy Associates
taxpolicy.org.uk/2023/06/03/iht…
The terrible argument that won't die: “inheritance tax is double ...
Here’s Jacob Rees-Mogg in Wednesday’s Telegraph: We hear this a lot. But it’s a terrible argument: Literally every day: And so on and so on. The point is: there is no principle that we don’t pay tax…
brookings.edu favicon
Brookings
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Rethinking the Estate and Gift Tax - Brookings Institution
Conference Report #05, by William G. Gale and Joel Slemrod (March 2001)
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Brookings
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Follow the money: Tax inheritances, not estates - Brookings Institution
Our estimates show that inheritance taxes not only can raise more revenue and be more progressive than the existing estate tax, they can also broaden the income tax base, improve equity, and raise economic mobility. Policymakers should take these estimates into account as they evaluate wealth transfer tax options, as well as the nation’s fiscal health. Acknowledgements and disclosures *The Brookings Institution is financed through the support of a diverse array of foundations, corporations,...
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Adam Smith Institute
adamsmith.org/blog/fine-clob…
Fine, clobber the rich, but not with a 100% inheritance tax
Abi Wilkinson has a piece at The Guardian making the case for bolstering the UK's welfare state by raising inheritance tax to 100%. She argues that it would be good to do more redistribution, to fund more and better public services, and that unlike other taxes, it does not face objections of mor
Campbell Ramble
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The 100% Inheritance Tax - by Alexander Campbell
100% Inheritance Tax, 0% Income Tax to Save the Republic
economicthinking.org favicon
economicthinking.org
economicthinking.org/who2018-100-in…
WHO 2018 Motion: 100% Inheritance tax - Economic Thinking
For the Winter Holidays Open (WHO) in Zagreb, two prelim motions and a final motion have been announced. • THW introduce a 100% inheritance tax • TH regrets the increasing focus on STEM education • THW oblige companies to price in environmental burden in the cost of their products This first post looks at the economics of the proposed 100% Inheritance tax. Of 800 votes cast, these three received the most. Other motions considered were, from least to more votes: This House “regrets volunteer...
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Crow Estate Planning & Probate
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What is The 100% Tax? | Crow Estate Planning & Probate
A 100% tax is loss that occurs when someone is completely cut off from inheriting family assets. See how marriage, divorce and deaths can trigger this tax.
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Washington Center for Equitable Growth
equitablegrowth.org/research-paper…
Allowing the 2017 estate tax changes to expire will reduce U.S. ...
A review of recent changes to the estate tax against the backdrop of rising inequality and options for improving its efficiency and making the tax code more equitable.
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ITEP
itep.org/federal-estate…
The Estate Tax is Irrelevant to More Than 99 Percent of Americans
The federal estate tax has reached historic lows. In 2019, only 8 of every 10,000 people who died left an estate large enough to trigger the tax. Legislative changes under presidents of both parties have increased the basic exemption from the estate tax over the past 20 years. This has cut the share of adults leaving behind taxable estates down from more than 2 percent to well under 1 percent.
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reddit
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Thoughts on inheritance tax? : r/georgism - Reddit
brookings.edu favicon
Brookings
brookings.edu/articles/estat…
Estate tax: Tax Needs Reform, But Repeal Would be a Giveaway to ...
Opinion by William G. Gale (7/27/2003)
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resolutionfoundation
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[PDF] IC-inheritance-tax.pdf - Resolution Foundation
What’s more, with the growth of wealth having outpaced that of income in the UK, wealth gaps have become even harder to bridge through work alone. The fact that some have far more luck in this birth lottery than others is one of the reasons why the UK has long taxed inheritances in one form or another. Inheritance Tax, however, is now limited in scale. For every £100 raised in taxes nationally (£708 billion in all), only 77p comes from Inheritance Tax (£5 billion) and only 4 per cent of...
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Wikimedia Foundation, Inc.
en.wikipedia.org/wiki/Estate_ta…
Estate tax in the United States - Wikipedia
Winston Churchill argued that estate taxes are "a certain corrective against the development of a race of idle rich". This issue has been referred to as the "Carnegie effect," for Andrew Carnegie. Carnegie once commented, "The parent who leaves his son enormous wealth generally deadens the talents and energies of the son, and tempts him to lead a less useful and less worthy life than he otherwise would'." Some research suggests that the more wealth that older people inherit, the more likely...
SmartAsset
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What You Need to Know About Inheritance Taxes - SmartAsset.com
An inheritance tax is paid by beneficiaries on inherited money or assets. We break down who has to pay it, how much and how to minimize it.
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Institute for Fiscal Studies
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Reforming inheritance tax - Institute for Fiscal Studies
We set out issues with the inheritance tax system and examine options for reform and the distributional impacts of reforming or abolishing the tax.
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sciencedirect
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Inheritance and wealth inequality: Evidence from population registers
irs
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[PDF] The Estate Tax: Ninety Years and Counting - IRS
SmartAsset
smartasset.com/taxes/5-ways-t…
5 Ways the Rich Can Avoid the Estate Tax - SmartAsset.com
Very few estates get hit with estate taxes, but wealthy families can avoid federal and state estate taxes by using certain tactics. Here's what t
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