Intergenerational Wealth Transfer and the Need to Revive and Metamorphose the Israeli Estate Tax

Law Ethics Hum. Right. 2014; 8(1): 59–101

43 Pages Posted: 14 Aug 2014

Date Written: August 13, 2014

Abstract

This article suggests enacting an accession tax instead of the estate duty – which was repealed in Israel in 1981. This suggestion evolves from historical and normative explorations of the tension between perceptions of familial intergenerational property rights and justifications for the “death tax,” as termed by its opponents, i.e., estate and inheritance tax. First, the Article explores this tension as expressed in the history of the Israeli Estate Duty Law. This chronological survey reveals a move from the State’s taken-for-granted interest in revenue justifying the Law’s enactment in 1949; moving on to the “needy widow” and “poor orphan” in whose name the tax was attacked during the years 1959-1964, continuing to the abolition of the tax in 1981 in the name of efficiency and the right of the testator to transfer his wealth to his family, and finally cumulating with the targeting of tycoon dynasties that characterizes the recent calls for reintroducing the tax. Next, based on the rich literature on the subject, the Article maps the arguments for and against intergenerational wealth transfer taxation, placing the Israeli case in larger philosophical, political, and pragmatic contexts. Lastly, it associates the ideas of accession tax and “social inheritance” with inspirational sources for rethinking a realistic wealth transfer taxation to bridge the gap between notions of intergenerational familial rights and intergenerational social justice.

Suggested Citation

Hacker, Daphna, Intergenerational Wealth Transfer and the Need to Revive and Metamorphose the Israeli Estate Tax (August 13, 2014). Law Ethics Hum. Right. 2014; 8(1): 59–101, Available at SSRN: https://ssrn.com/abstract=2479798

Daphna Hacker (Contact Author)

Tel-Aviv University ( email )

Ramat Aviv
Tel Aviv, 69978
Israel

HOME PAGE: http://https://en-law.tau.ac.il/profile/dafna

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