What is the primary goal of donor's tax legislation?

The primary goal of donor's tax legislation is to prevent the circumvention of the estate tax through gifting. This legislation is designed to ensure that individuals cannot easily avoid paying estate taxes by transferring their wealth to others before they pass away. The donor’s tax applies to gifts made during a person's lifetime, thereby reducing the potential tax advantages that could arise if someone were to gift away their assets to avoid higher taxation after death.

By imposing taxes on large gifts, the legislation aims to maintain a fair tax system where wealth distribution is monitored and controlled. This approach ensures that taxpayers fulfill their fiscal responsibilities regardless of how they choose to allocate their wealth during their lives. Consequently, the donor's tax serves as a mechanism to reinforce the estate tax, ensuring that intended taxation on wealth does not evade due collection simply because of gift transfers.