Kenneth F. Scheve Jr. is a professor of political science at Stanford University. David Stasavage, a professor of politics at New York University, is the author of “States of Credit: Size, Power, and the Development of European Polities.

Under the deal struck by President Obama and Congress to avert the “fiscal cliff,” the estate tax — long targeted for elimination by Republicans — survived, but in a substantially diminished form.

In 2001, the year George W. Bush became president, individual estates over $675,000 were taxed and the top rate was 55 percent. Now, the maximum tax is 40 percent and only individual estates worth more than $5.25 million are taxed (a figure that will now be automatically adjusted for inflation).

The estate tax has a history as long and controversial as the income tax. Its first modern version appeared in the federal tax code in 1916, three years after the ratification of the 16th Amendment, which authorized the federal income tax. Advocates of the estate tax see it as a crucial tool for raising revenue and a buffer against the sharp, nearly inexorable rise in inequality over the past four decades. Opponents, who call the levy “the death tax,” say it penalizes savers, harms growth and interferes with parents’ ability to pass on their wealth to their children....