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...

This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the relationships among the main functions of taxation—notably, raising revenue, redistributing income, and correcting externalities—and the mapping between these functions and various...