Taxpayers often avoid ILITs because of the perceived high level of complexity. But if this approach is taken, there is no burden to be allocated to labor in the example just cited, just as there would be none to allocate to capital if its real income fell by 10 per cent and labor’s by 20 per cent. Part of the difficulty is that adherence to the realization principle permits capital gains to be transferred tax-free either as a gift or at death. More important, property taxes often are levied only on land and buildings. First, corporations are viable economic units with characteristics and behavior patterns that have very little relationship to the income and other characteristics of their stockholders.