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Taxation Without Explanation: The Federal Gift Tax, Jeffrey S. Kinsler
Taxation Without Explanation: The Federal Gift Tax, Jeffrey S. Kinsler
Law Faculty Scholarship
The Federal Gift Tax is designed to implement two competing policies: to tax gifts so as to prevent taxpayers from depleting their estates (and thus evading the estate tax) with tax-free lifetime transfers; but to tax gifts at a rate lower than testamentary transfers so as to encourage taxpayers to circulate wealth during life, thereby stimulating economic growth and income tax revenue. The gift tax has always been carefully crafted to balance these competing interests. That is, until now. The Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") completely perverted these two policies.' EGTRRA was sold to the …