Author granted license

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International

Document Type


Publication Date





University of Chicago Press




The United States taxes gifts made while an individual is living more leniently than it taxes wealth transfers at death. Although in some measure this disparity has existed since the enactment of the modern estate and gift taxes in 1916 and 1932, it was significantly narrowed by the Tax Reform Act of 1976 (the 1976 Act). That statute replaced the separate gift and estate taxes with a regime that taxes the cumulative total of an individual's lifetime taxable gifts and his taxable estate at death, under a single (or "unified") graduated table of rates. Nevertheless, there remains a signficant difference between the taxation of gifts and estates. Under existing law, the gift tax base systematically excludes the transfer tax paid, whereas the estate tax base does not. As a result, effective gift tax rates are systematically lower than estate tax rates, and the system that we actually have is something less than a truly "unified" wealth-transfer tax.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.