ABSTRACT
The ideas that are promoted with foundation money have been controversial throughout the twentieth century. The tax laws allow foundations to be established with tax-free donations and bequests, and then allow foundations to operate as non-profit organizations. One of the characteristics of many tax reform proposals is that they would eliminate the tax deductibility of charitable contributions. The largest foundations are established through bequests rather than charitable contributions, but they are affected by the deductibility of charitable contributions because they provide an alternative way to avoid taxation. The taxation of bequests as it exists in the United States at the end of the twentieth century is based on questionable motivations. Inheritance tax policy is a part of a broader issue of how public policy should address disparities in income and wealth. The goal of equality would be most easily achieved by lowering the incomes of those at the top end of the income distribution.
