In their discussion of ways and means for obtaining revenue, the early writers on fiscal subjects generally gave space to a consideration of inheritance taxes. Adam Smith opposed the tax because it did not conform to his canons of taxation, and increased the transfer of capital, which was the basis of productive labor of individuals, to the use of the state, the most of whose activities were unproductive. He did admit, however, that when property descended to others than dependents, it might be taxed without a feeling of any very great inconvenience. Ricardo objected to the tax on the ground that it was a capital levy. His reasoning was that if a man paid a tax of $100 out of a bequest of $1,000, he would have no inclination to save the amount of the tax, but would consider the bequest as one of $900. If, however, he were allowed the bequest of $1,000, and then were assessed the amount of the tax on some objects of consumption, he would retrench expenditures in order to save the necessary amount.

Views of Mill and Bentham. - While many other early writers found objection to the principle, John Stuart Mill and Jeremy Bentham were advocates of inheritance taxes in the extreme. Mill took the view that inheritances, other than to near relatives, should be abolished; that the amount which could be received by bequest should be strictly limited, and that rates should be progressive. He denied any right of inheritance, and contended that both individuals and society would be better off if no one were freed from the necessity of working by the receipt of a large fortune.

Bentham favored the plan because he thought it would produce revenue with the minimum of sacrifice. He expressed his position in the form of a paradoxical question: "What is that mode of supply, of which the twentieth part is a tax, while the whole would be no tax and would not be felt by anybody?" He contended that this situation would be accomplished if the power of bequest of persons having no direct heirs were regulated, and that all cases of intestacy - descent of property when no will had been made - be abolished, except in an immediate family. A person who had expected no inheritance would feel no burden if the state took the entire amount. If, however, an estate had been given to him, and then a part taken for taxes, the burden at once would be apparent. These opinions are but representative of many expressed by early writers on economic topics.