By Shrishti Srivastava
Humans are inherently social beings, reliant on fellow individuals for emotional and psychological support. This interdependence has driven societal evolution, culminating in the organized and civilized societies of the present day. Among the many integral components of society, family stands as the fulcrum around which an individual’s life revolves. A Family provides emotional stability and often serves as a driving force for individuals to strive for success, build assets and secure the future of their kin.
Inheritance, defined as the transfer of property or assets from one generation to the next, underscores the deep ties between family and individual efforts. Properties and assets hold not only immediate financial value but also potential for increased worth over time. Many nations including the United States, Italy, France and the UK, impose inheritance taxes – a percentage levied on the inherited property. The rates of these taxes can vary significantly, often depending on the relationship between the deceased and the beneficiary.
The fundamental question arises - is taxation on inheritance justified?
This debate can be explored through the perspective of two influential philosophers, John Rawls and Robert Nozick, whose contrasting views on justice and the role of the state provide profound insights.
John Rawls’ Perspective: Redistribution and Justice
John Rawls (1921-2002) a prominent American Political Philosopher argued that the taxation on inheritance is justified as it will subsequently aid in providing a level playing ground to all individuals. In his seminal work “Theory of Justice”, Rawls talks about the “Fairness” and “Equality of Opportunity” advocating for a redistribution of wealth to neutralize the inequality arising from arbitrary social advantages.
Chosen and Unchosen Choices
Rawls delineates between “chosen” and “unchosen” choices in life. Individuals bear responsibility for the outcome of their chosen decisions, such as violating traffic laws. However, they cannot be held accountable for unchosen circumstances, such as the family or social class into which they are born. These unchosen factors, or “social endowments”, shape an individual’s opportunities and privileges, often leading to significant disparities in wealth, education and social status.
Natural vs. Social Endowments
Natural endowments such as intelligence or abilities of humans. Talents with which humans are born and thus he terms this endowment as “morally arbitrary” and argues that the talent or ability of an individual should be treated as a common asset instead of an asset of one person. He further propagates – “Talent neither we deserve, nor we do not deserve.” This endowment is not determined by the factors of society and thus can be considered by him.
Social endowment encompasses factors such as Place of Birth, Family Background, Caste, Class, Creed, and Nationality, which influence an individual’s societal positioning and access to opportunities. This is the central argument of Rawl's theory. Rawls highlights that individuals who fall on the positive side of this endowment are morally obliged towards the people who fall on the negative side of the endowment – the least advantageous. Social endowments can also be seen as a social construct, based on which individual’s trajectory gets directed. For Rawls, inequality arising out of natural endowment is justified but inequalities arising because of social endowment are unjustified and thus he calls on the State to mitigate these disparities.
Justification for the Inheritance Tax
Rawls argues that when one enters the market, he/she will be purely treated based on his/her talent and ability and will get rewarded by the market based on the contribution he or she makes.
It is against the same backdrop; Rawls would argue in favor of taxation on inheritance. For Rawls, inherited wealth bestows significant advantages, such as access to better education, job opportunities and societal status, which are unattainable for those born into less privileged circumstances, hence by taxing people who pose, the state can redistribute the wealth and can use the funds for the welfare of the least advantageous and eventually raising the baseline, ensuring a level playing ground for everybody to an extent.
States who tax citizens on inheritance, give the arguments of Rawls as moral ground for the same.
Robert Nozick’s Perspective: Individual Freedom and Entitlement
Robert Nozick (1938 -2002) an American Philosopher and a contemporary of John Rawls, would certainly not accord with taxation on inheritance. In his book – Anarchy, State and Utopia published in 1973, Nozick vehemently advocates for minimalist state and individual rights.
Unlike Rawls, Nozick's individual is central and supreme. According to him, nobody owes an obligation towards any other being. Nozick propagates for a Minimal State i.e. a state which would be involved only in protecting the Right to Life, Liberty and Property. The State would also be looking after the common public good.
Nozick’s non-accordance with taxation on inheritance is rooted in his Theory of Entitlement, as conceptualized by him. As per the Theory of Entitlement – if a person owns property/wealth which he/she has acquired through just means without getting into unjust means such as stealing or seizing then nobody can claim it. He termed it as Just Initial Acquisition. The second principle to this theory is – Just Transfer - As per this if the owner is transferring his/her acquisition to someone else willingly then there is no harm and hence it could be done. Inheritance falls under the category of Just Transfer and hence taxation on the same would be an arbitration by state.
As per Nozick, taxation is a raid. Property is a physical extension of wealth and wealth is a product of the labour of an individual, thus taxing people for their labour is a gross violation of their dignity. If an individual is willingly transferring his/her acquisition to someone else, nobody including the state could claim or tax the person.
On the social front, contrary to Rawls, society does not exist for Nozick and so does the idea of welfare or ameliorating the life of the least advantageous.
Contradicting Rawls, Nozick argues that by redistribution, one is penalizing the human being who has acquired wealth through his/her labour and just means.
He also argues that for redistribution one needs a State to regulate or monitor the redistribution. He challenges the authority of the state in monitoring the transfer of wealth which is not generated by them but by individuals. He terms the State as “Mamma from Heaven.” Redistribution or taxation on inheritance contradicts Nozick’s idea of a minimal state. For Nozick, inequality is justified if it is acquired through just means.
Contradicting Rawls, Nozick argues that Rawls does not penalize you for your social endowments but rather penalizes you for your natural endowments and hence this penalization or taxation is unjustified. Since society does not exist for Nozick, the idea of social cooperation ceases to operate.
Conclusion: Finding the Common Ground
The extent to which taxation on inheritance is justified is a question of subjective understanding and interpretation of individuals and society. Rawls’ emphasis on fairness highlights the importance of addressing systemic inequalities and providing equal opportunities, while Nozick’s defense of individual freedom underscores the value of autonomy and property rights.
To say that society does not exist would be an unimaginative statement as the options with which an individual is served also get influenced by society and the state. The moral responsibility that we have towards each other is essential for communitarianism and civilization to flourish. Taxation might be the one way out for making the world equal which is inequal in its essence. Taxation and redistribution, if designed thoughtfully and implemented transparently, can help balance these disparities and create a more equitable society.
However, it is crucial to strike a balance that respects individual rights while addressing collective needs, ensuring that all stakeholders are considered in the process a common consensus could be drawn upon for the larger benefit of society.
References –
Rawls, John. A Theory of Justice. Harvard University Press, 1971.
Nozick, Robert. Anarchy, State and Utopia. Basic Books, 1974.
Kymlicka, Will. Contemporary Political Philosophy: An Introduction. Oxford University Press, 2002
About the Author
Shristi Srivastava is a final year Masters in Public Policy student. Having done her Bachelor's in Political Science, Shristi's interests revolve around Gender, SDG's, Caste and Comparative Politics and the intersection of politics and policies at the national and international level. She is an avid reader and believes in inclusive and equal society.
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