The paper presents a theory on the best way to tax capital for the benefit of society. The researchers use a model to calculate the ideal tax rates on inheritances based on certain factors. They find that higher tax rates on inheritances are best for society, especially for wealthy individuals. Unlike previous theories, taxing inheritances is still important even with optimal labor taxes. Positive capital taxation is also beneficial due to certain preferences. In addition, market imperfections and unpredictable changes in investment returns can justify shifting towards lifetime capital taxes.