The bottlenecks encountered in inheritance and transfer tax, solution proposals and application in the United States

Inheritance and Transfer Tax, one of the wealth taxes, which has existed since 1926, has undergone many changes, but none of these changes have been structurally reformative. This tax, which has a very low share in total tax revenues, has continued to exist for social purposes rather than financial purposes, but from time to time, the debates on its abolition have arisen. However, its abolition would be contrary to the principles of taxation and fair and equitable distribution of tax burden according to the financial strength under Article 73 of the Constitution. In this context, instead of abolishing the Inheritance and Transfer Tax, which may be used as a tool for improving the income distribution, the main objective should be to determine the necessary regulations and to strengthen both the financial and social objectives of this tax. In this study, after giving basic information on wealth taxes, primarily, literature and legislation research were conducted to determine the problems encountered in the application the Inheritance and Transfer Tax. Then, the disputes between the tax administration and the taxpayer, which were brought to the judiciary, were discussed, and the special notices of the taxpayers were examined and it was revealed which issues were not clear enough in the execution of this tax. Thus, all the problem areas that are encountered and might be encountered were detected. Furthermore, many countries, notably the United States, were examined in terms of the Inheritance and Transfer Tax and coordinately compared with Turkey, so the position of our country was determined. Finally, according to these findings, some solution proposals including some structural reforms were shared. As a result, it is believed that both the financial objectives of the tax in question, such as financing public expenditures, and the social objectives such as ensuring justice in income distribution shall strengthen if the reform proposals which are put forward regarding the problem areas raised in this study are adopted.