Advanced Search
MyIDEAS: Login

Estate and Gift Tax Incentives and Inter Vivos Giving

Contents:

Author Info

  • Joulfaian, David
  • McGarry, Kathleen
Registered author(s):

    Abstract

    The estate tax has received a great deal of attention from policy makers and the public in recent years. Yet we know little about its effect on the transfer of wealth. In this paper we explore the effect of the tax on inter vivos giving. In particular, we look at the degree to which wealthy individuals exploit the potential for tax–free transfers as a means of spending–down their estates, and examine the responsiveness of inter vivos transfers over time to changes in the tax law. To address these questions we employ two data sets, each with important strengths and weaknesses. Using panel data from the Health and Retirement Study (HRS) we find that many of the wealthy fail to take advantage of the gift tax annual exemption to make tax–free transfers in any given year. Even those who do make a transfer in one year, often do not repeat the transfer annually and transfer far less than the tax law would allow. We then use data from linked gift and estate tax returns to examine giving over a much longer period. We find in the aggregate that there are sizable shifts in the timing of giving in response to tax changes, but again, the wealthy appear to transfer very little during their lifetimes. Overall, we conclude that while taxes are an important consideration in transfer behavior of the rich, their behavior is not universally consistent with a tax minimization strategy.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.ntanet.org/NTJ/57/2/ntj-v57n02p429-44-estate-gift-tax-incentives.pdf
    Download Restriction: no

    File URL: http://www.ntanet.org/NTJ/57/2/ntj-v57n02p429-44-estate-gift-tax-incentives.html
    Download Restriction: no

    Bibliographic Info

    Article provided by National Tax Association in its journal National Tax Journal.

    Volume (Year): 57 (2004)
    Issue (Month): 2 (June)
    Pages: 429-44

    as in new window
    Handle: RePEc:ntj:journl:v:57:y:2004:i:2:p:429-44

    Contact details of provider:
    Postal: 725 15th St. NW #600. Washington, D.C. 20005-2109
    Phone: (202)737-3325
    Fax: (202) 737-7308
    Email:
    Web page: http://www.ntanet.org/
    More information through EDIRC

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Nordblom, Katarina & Ohlsson, Henry, 2006. "Tax avoidance and intra-family transfers," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1669-1680, September.
    2. James R. Hines Jr., 2012. "How Important Are Perpetual Tax Savings?," NBER Working Papers 18553, National Bureau of Economic Research, Inc.
    3. Stewart, Charles Jr., 2006. "Gross national accumulation," Business Horizons, Elsevier, vol. 49(2), pages 105-113.
    4. Ohlsson, Henry, 2011. "The legacy of the Swedish gift and inheritance tax, 1884–2004," European Review of Economic History, Cambridge University Press, vol. 15(03), pages 539-569, December.
    5. Jon Bakija & Joel Slemrod, 2004. "Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns," Department of Economics Working Papers 2004-12, Department of Economics, Williams College.
    6. Marta Melguizo Garde, 2007. "La motivación de las transmisiones lucrativas entre generaciones de una familia: modelos teóricos y evidencia empírica," Hacienda Pública Española, IEF, vol. 181(2), pages 81-118, June.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:57:y:2004:i:2:p:429-44. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charmaine Wright).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.