ABSTRACT
We have so far examined taxes which are levied on the occasion of a transfer of wealth. We tum now to a consideration of an annual tax levied on the holding of wealth. In our examination of transfer taxes we pointed out that such taxes could be so devised as to represent a lump sum prepayment of an annual wealth tax (AWT). But even if transfer taxes are devised in this way, there remain some important differences between taxes levied on the occasion of a transfer of wealth and taxes levied annually on the holding of wealth. The two types of capital tax cannot be complete substitutes for each other, and it is important to appreciate what are the significant differences between them.
