Death taxes are no way to deal with intergenerational inequality

(Thomas Piketty wrote "Capital in the Twenty-First Century," which posited a world where the rich would ultimately accumulate all the capital in the world because the rate of return on assets is higher than growth. It has striking similarities to Thomas Malthus' discredited work on population growth.)

With this mindset, it's easy to see why she would want to tax inheritances and redistribute the wealth to lower taxes. Except most of the extra taxes generated would go to pay for the elderly, who are the ones driving the increase in health and age expenditure.

It wouldn't make it any easier to buy a house for a young person tomorrow than it is today (although it would make some young people who wouldn't inherit as much, more miserable).

Wouldn't it just make more sense to make older Australians responsible for more of their aged care?

Apart from the fact that her death duties proposal would be massively unpopular and join the other 98 recommendations of the PC from the last six years that have been ignored, if it were implemented it would do considerable damage.

Here's the challenge with an inheritance tax

An inheritance is a gift and not dissimilar to winnings in a lottery. You couldn't tax one without taxing the other, and not just winnings from games of chance. Any gift would have to be taxed.

But we have a general approach to these things that you only tax income-earning activities, that is activities that you deliberately engage in to earn an income. Bookies get taxed on their winnings, punters don't.

Then there is the problem of the family farm.

This would be the biggest boost to corporate farming ever because many properties would have to be sold, and what family enterprise is going to be able to buy them when faced with the same ultimate prospect of inheritance taxes?

I've got nothing against corporate farming, but family farms have a place too, and can be some of the most innovative.

At the same time, it would plunge some obstinate operators into subsistence as they clung to debt-ridden properties after paying the tax.

Family businesses would face a similar problem.