Should the death tax die? And should it leave an inheritance?

In this paper we examine the possibility of earmarking inheritance taxes to the financing of a transfer to the poor, aimed at reducing the payoff from small crime and at fostering the fulfillment of basic social responsibilities. A simple model of a society in which there are two types of agents either supplying legal labor or participating in criminal activity is presented. The effects of the transfer are examined with reference to two policy designs and to attitudes toward risk\ of the agents. Financing the transfer through inheritance taxation may be advisable as a way of collecting the needed revenue from agents who are likely to maintain strong enough incentives to good.