The Earth Belongs to the Living

We are averse to damning children to a lifetime spent paying off their parents’ debts, yet we provide a mechanism for them to spend a lifetime living off their parents’ wealth.

Dead people can’t pay taxes. Dead people can’t do anything.

Internal Revenue Service Headquarters Building, 1993. Photograph by Jack E. Boucher.

In 1978, the economist Milton Friedman delivered a lecture titled “What is America?” at the University of Chicago. “Is America what it has seemed to be becoming these past few decades?” Friedman asked. “Is America not what it has been, not the land of promise of the past two hundred years, but is it instead a land of growing bureaucracy and diminishing freedom?”

After championing the many virtues of a free market system, Friedman fielded inquiries on its capacity to prevent the rise of monopoly, to protect the depletion of natural resources, and to combat racial discrimination. Responding to a question about equal pay for equal work, Friedman concluded by suggesting that low-paid jobs afford immigrant laborers the chance to work “their way up the ladder.” “Unfortunately,” he bemoaned, there’s no way you can immediately propel people to the top of the ladder.”

Another questioner was more radical. The student noted that Friedman’s lecture, ostensibly about “distribution of wealth,” had actually focused on “distribution of income,” thereby ignoring unearned fortunes resulting from “circumstance of birth.” “One possible way of redistributing the wealth,” he suggested, “is simply to have a 100 percent inheritance tax.” Such a tax wouldn’t pervert incentives in such a way that undermined the benefits of the free market system since, as the student phrased it, “It’s only after the person is dead anyway.”

“I beg your pardon, I’m afraid I don’t know the family you come from,” Friedman responded, to much laughter, “but as you grow up you will discover that this is really a family society and not an individual society . . . And the greatest incentives of all, the incentives that have really driven people on, have largely been the incentives of family creation, of establishing their families on a decent system.”

According to Friedman, the student was relying on a wholly limited conception of what people value and what drives them psychologically:

The thing that is amazing, that people don’t really recognize, is the extent to which the market system has in fact encouraged people and enabled people to work hard and sacrifice in what I must confess I often regard is an irrational way for the benefit of their children. One of the most curious things to me . . . is that almost all people value the utility which their children will get from consumption higher than they value their own.

The biological imperative to secure a good life for one’s children has been present across cultures throughout history. The most powerful members of society, those with the most control over its rules, have long sought to organize them in favor of their offspring. Today, inherited titles have been replaced by inherited fortunes, with capital serving as a gateway to social, cultural, and political capital. Thanks to his enormous inheritance, for example, Donald Trump, a uniquely unqualified presidential candidate, has secured second place in the contest for leader of the free world.

The vested interest in the happiness of one’s offspring after one’s death is, in a sense, irrational. But it is also a way of conceptualizing “life”—in the general sense of the word—as continuing beyond the span of one’s own. And when one does so, one might imagine oneself to be an actor in society after one’s death, capable of property ownership. One might imagine oneself to be a citizen after one’s death, and thus to have rights it is the government’s obligation to protect—rights that may be infringed upon by that very government. And so, one might begin to embrace irrational, inaccurate terminology. Not “inheritance tax”—a tax paid by one’s living inheritor, most often one’s child. But instead “death tax.”

Of course, dead people can’t pay taxes. Dead people can’t do anything.


In his 1689 work First Treatise of Government, English philosopher John Locke argued that children bear a “natural right of inheritance to their father’s goods, which the rest of mankind cannot pretend to.” Further, fathers who outlast their children, Locke wrote, can lay claim to their property, for “the debt a man owes his father takes place, and gives the father a right to inherit the son’s goods, where, for want of issue, the right of children doth not exclude that title.”

This question of whether inheritance is a divine right—or merely a mortal one—has defined the US since its inception. In a 1789 letter, Thomas Jefferson urged James Madison, in forming the United States government, to avoid Lockean tyranny. Jefferson argued that there is only one natural law, “that the earth belongs . . . to the living; that the dead have neither powers nor rights over it.” In stark contrast to Locke, Jefferson took care to note that a child who inherits his father’s property “takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject.”

Jefferson’s philosophizing was later echoed in important legal precedent. Article 1, Section 8 of the Constitution gives the federal government the right to impose excise taxes, while Section 9 prevents it from collecting direct taxes, except under very strict conditions. Where a direct tax is a tax on a state of being (owning property, being dead), an excise tax is triggered by a transfer of wealth (income or sales tax.) As early as 1874, in Scholey v. Rew, the Supreme Court upheld the constitutionality of a federal inheritance tax by classifying it as the latter.

The Court made a similar finding in 1916, in the case of New York Trust Co. v. Eisner. “If a tax on property distributed by the laws of a State, determined by the fact that distribution has been accomplished, is valid,” wrote Chief Justice Oliver Wendell Holmes in the majority opinion, “a tax determined by the fact that distribution is about to begin is no greater interference and is equally good.” Again, the Court recognized that a tax on a dead person’s estate is equivalent to a tax on the inheritor’s income. Indeed, Holmes’s phrasing (“property distributed by the laws of the State”), similar to Jefferson’s, was an implicit rebuttal of Locke’s assertion that an inheritor is owed his inheritance by virtue of divine law. It reinforced, and codified, a fundamentally American ideal.


In the Madison letter, Jefferson argued that a society that allowed debt to be inherited violated his sole natural law and condemned the practice on the grounds that it was tantamount to enslaving the next generation. “No man can by natural right oblige the lands he occupied,” he wrote, “or the persons who succeed him in that occupation, to the payment of debts contracted by him.”

We are averse to damning children to a lifetime spent paying off their parents’ debts, yet we provide a mechanism for them to spend a lifetime living off their parents’ wealth. According to Friedman, the government carries out this transfer not on moral grounds, but practical ones. Friedman argued that those who have already accumulated large fortunes—fortunes larger than they can ever imagine spending in their own lifetimes— lose some incentive to continue to be productive, to effortfully contribute to society, if they know they can’t pass on those fortunes to their children. “The only way in which you can redistribute effectively the wealth,” Friedman said, “is by destroying the incentives to have wealth,” an act which would impose too large a collective cost.

Of course, the very concerns Friedman expressed apply as much to the child as they do the parent. An inheritor can also lose the incentive to continue to be productive, to effortfully contribute to society.1 If anything, Friedman’s concerns apply tenfold. Diminishing marginal utility of wealth suggests that an individual values her first dollar more than her second, her second more than her third, and so on. And because children have yet to amass huge fortunes through their own labor, they derive greater utility from those fortunes than their parents might have. The lost productivity is necessarily higher. And the debt of that lost productivity is not borne by an individual; it is collectively shouldered by society at large.


From the launch of his presidential campaign, Jeb Bush was beleaguered by his surname and by his broad mishandling of its implications. “Look, I won the lottery when I was born 63 years ago, looked up, and I saw my mom,” he said during what would turn out to be his last debate, prompting knowing eye rolls across America. Every misstep, of which there were many, felt all the more grave for the sense that he of all people ought to be better at this. But while the scorn with which the country collectively spoke of the “Bush years” was predictable, he could not have anticipated the raw, animalistic hatred with which it would come to speak of “the Establishment,” a concept perfectly embodied by a man whose presidency seemed predetermined.

The most raw and animalistic of the supposed anti-Establishmentarians was Donald Trump, whose success sprung from a set of twin American ideals: a disdain of dynastic politics and an unshakeable sense that people are wealthy because they deserve it. The former accounted for Bush’s downfall, the latter for Trump’s ascent. A results-oriented approach—with “results” narrowly tailored to absurd specificity—has served as the crux of his campaign. How could his foreign policy lack gravitas if he and Vladimir Putin appeared on the same highly rated episode of 60 Minutes? How could he be poisoning political discourse if he was also polling well among Republican primary voters? And, most importantly, as he constantly reminded us, how could he lack an elementary understanding of how market forces operate if he was also rich?

While Trump pulled no punches in his attacks on Bush, Bush made no attempts to tear down the charade that fueled Trump’s rise. Namely, that he, too, had won the lottery. Analyses of the so-called businessman’s wealth trace it entirely to his father’s fortune, and reveal Trump would have fared better had he simply tossed his inheritance into an index fund rather than a series of ill-fated business ventures. “If he hadn’t inherited $200 million, you know where Donald Trump would be right now?” Rubio said during one debate, to his own amusement. “Selling watches in Manhattan.” But neither Bush nor Rubio put forth tax plans that sought to rectify this injustice. Along with every single fellow Republican candidate who took a stance on the issue, both proposed not to increase the estate tax, but to eliminate it altogether.

Yet for some reason, we find these proposals less jarring than a tax cut for, say, white men, even though they afford similar biological advantages. An inheritance is a reward, beyond the myriad benefits of having been raised wealthy, for one’s lineage. It ensures that economic power begets further economic power, in the literal sense of the word. Our society is fueled, by virtue of our tax code, by dynastic economics.


Jefferson further argued that as laws, like debt, have the capacity to constrain our freedom, both ought to come with a built-in expiration date of sorts, so that new generations might set up their own systems of governance without being tethered to the laws of their forefathers. He recognized that the power to repeal laws is meaningfully distinct from a law with a built-in term limit. The two would only be equivalent, he wrote, “if every form of government were so perfectly contrived that the will of the majority could always be obtained fairly and without impediment. But this is true of no form.”

It is equally true that economic class is not completely fluid, and it’s no surprise that lower estate taxes correlate with lower economic mobility across generations. After all, tax policy itself is a broker of economic power.

And as Friedman himself wrote in Capitalism and Freedom, “Our minds tell us, and history confirms, that the greatest threat to freedom is the concentration of power.” In warning against taxation as a form of government tyranny, Friedman equated a lack of economic power with lack of political freedom. And so just as government authority exacted via undemocratic means is inherently oppressive, just as political power derives from the consent of the governed, a too-powerful economic elite can be tyrannical as well.

The greatest check against the perverting influence of power is its precarious nature, its impermanence. Those who come into wealth not by producing goods or providing services from which society benefits, but by sheer accident of birth, are heirs to a throne; they are propelled immediately up the ladder.

When Locke argued that children were entitled to their deceased fathers’ property by natural law, what he really described was a natural instinct. But there are other instincts as well. Less base and tangible, but no less primal or real. The foundation of natural law is a belief in fairness and justice, toward a system of earned advantages and away from the notion of material comfort or destitution as one’s birthright. Not equality, but egalitarianism, is a prerequisite of freedom in its truest, deepest lived expression. It is what legitimizes any power at all.


The visceral reaction we have today to Jefferson’s glossy treatises on liberty, that we might have to Theodore Roosevelt and Woodrow Wilson’s ostensibly high-minded championing of the estate tax as a matter of fairness and equality, stem from historical hypocrisy. Progress that has been made in the realm of social justice has expanded our notions of citizenship and, in turn, of who is entitled to economic justice as well.

Yet today, racial disparities stem not merely from unequal opportunity that results in disparities in income, but even greater disparities in wealth. Disparities that amount to a continuation of slavery, of colonization, of internment, and any number of other crimes against humanity perpetuated by an American elite. And if America continues to progress further, if society becomes more fluid and meritocratic still, then the division of capital tomorrow will continue to reflect the systemic injustices that still plague it today.

This is precisely what Jefferson hoped to avoid in advocating for inherently temporary laws. He hoped to tighten the lag time between our ever-evolving social and cultural norms and institutional reform. What are governments, and the markets they establish and regulate and enforce the terms of, but structures created by humans to impose concepts like fairness and egalitarianism on a naturally unfair and inegalitarian world. But economic justice, like legal justice, cannot be perceived as arbitrary in order to be effective, in order for people to have faith in it, to abide by its terms, and to invest wholeheartedly in its promise.

What is, at its basest level, a biological imperative, can be transformed instead into the hallmark of a healthy society: the vested interest of its members in preserving that health beyond the span of their own lives. For what Friedman called irrationality is in fact humanity. And just as Friedman accused the student of having a limited conception of what it is that people value, he, too, suffered from a limited view.

A 100 percent inheritance tax is thus not desirable as a significant revenue generator for government or as a way of amassing power, but as a way of dispersing it, of preventing inherited wealth from corrupting our markets, and social, cultural, and political norms. As parents live their lives outside the narrow confines of economic self-interest, so too tax policy ought to reflect a view of the “decent system” in which they hope to establish their families as one that extends beyond material comfort, a more fully human way of improving the world in which their children live.

  1. It is empirically true that children with larger inheritances are more likely to exit the labor force: http://piketty.pse.ens.fr/files/Holtz-Eakinetal1993.pdf 

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