This Article rejects a central claim of taxation and private law theory, namely, Kaplow and Shavell’s prominent thesis that egalitarian social goals are most efficiently achieved through income taxation and transfer, as opposed to egalitarian alterations in private law rules. Kaplow and Shavell compare the efficiency of rules of tort to rules of tax and transfer in meeting egalitarian goals, concluding that taxation and transfer is always more efficient than other private law legal rules. We argue that Kaplow and Shavell reach this conclusion only through inattention to the body of private law that informs the very basis of their discussion: underlying property entitlements. This Article contends that Kaplow and Shavell’s comparison of rules of taxation to rules of tort fails to take proper account of the powerful role that (re)assigning underlying property entitlements plays in achieving egalitarian goals, even at the level of formal theory. We conclude that, contrary to Kaplow and Shavell’s prominent claim, as a matter of efficiency, the rules of income taxation and transfer are not always preferable to alterations in the initial assignment of property entitlements in achieving distributive or egalitarian goals.