Accidental Bequests: A Curse for the Rich and a Boon for the Poor
AbstractWhen accidental bequests signal otherwise unobservable individual characteristics such as productivity and longevity, the tax administration should partition the population into two groups: One consisting of people who do not receive an inheritance and the other of those who do. The first tagged group gets a second-best tax Ã la Mirrlees; the second group a first-best tax schedule. The solution implies that receiving an inheritance makes high-ability types worse off and low-ability types better off. High-ability individuals will necessarily face a bequest tax of more than 100%, while low-ability types face a bequest tax that can be smaller as well as larger than 100%. With a Rawlsian social welfare function, the low-ability types too face a more than 100% tax on bequests.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 114 (2012)
Issue (Month): 4 (December)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
Other versions of this item:
- Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2009. "Accidental bequests: a curse for the rich and a boon for the poor," IDEI Working Papers 591, Institut d'Économie Industrielle (IDEI), Toulouse.
- CREMER, Helmuth & GAHVARI, Firouz & PESTIEAU, Pierre, . "Accidental bequests: a curse for the rich and a boon for the poor," CORE Discussion Papers RP -2462, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Helmuth Cremer & Firouz Gahvari & Pierre Pestieau, 2010. "Accidental Bequests: A Curse for the Rich and a Boon for the Poor," CESifo Working Paper Series 3094, CESifo Group Munich.
- Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2009. "Accidental bequests: a curse for the rich and a boon for the poor," TSE Working Papers 09-119, Toulouse School of Economics (TSE).
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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