Introducing Probabilities and Present Value Analysis into Taxation: A Comment.

Abstract This article presents comments on the introduction of probabilities and present value calculations into the analysis of gift tax. While the verbal description is formulated in terms of present value, it is actually future value which is calculated. While either of these may be used to choose amongst alternatives, two future values cannot be compared if they are not carried to the same date. The estate tax liability is calculated on the rather strange assumption that the taxpayer will die with certainty when exactly reaching his expected life.