Advanced Search
MyIDEAS: Login to save this paper or follow this series

Optimum Taxation of Bequests in a Model with Initial Wealth

Contents:

Author Info

  • Johann K. Brunner
  • Susanne Pech

Abstract

We formulate an optimum-taxation model, where parents leave bequests to their descendants for altruistic reasons. In contrast to the standard model, individuals differ not only in earning abilities, but also in initial (inherited) wealth. In this model a redistributive motive for an inheritance tax - which is equivalent to a uniform tax on all expenditures - arises, given that initial wealth increases with earning abilities. Its introduction increases intertemporal social welfare or has an ambiguous effect, depending on whether the bequeathing generation can adjust their behaviour and whether the external effect related to altruism is accounted for in the social objective.

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.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-03/cesifo1_wp2977.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2977.

as in new window
Length:
Date of creation: 2010
Date of revision:
Handle: RePEc:ces:ceswps:_2977

Contact details of provider:
Postal: Poschingerstrasse 5, 81679 Munich
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Email:
Web page: http://www.cesifo.de
More information through EDIRC

Related research

Keywords: optimum taxation; taxation of bequests;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Johann Brunner & Paul Eckerstorfer & Susanne Pech, 2013. "Optimal taxes on wealth and consumption in the presence of tax evasion," Journal of Economics, Springer, Springer, vol. 110(2), pages 107-124, October.
  2. Cremer, Helmuth & Pestieau, Pierre & Rochet, Jean-Charles, 1999. "Capital Income Taxation when Inherited wealth is not Observable," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 109, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2001.
  3. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(3), pages 59-66, Summer.
  4. Johann K. Brunner & Susanne Pech, 2011. "Optimal taxation of wealth transfers when bequests are motivated by joy of giving," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2011-12, Department of Economics, Johannes Kepler University Linz, Austria.
  5. CREMER, Helmuth & PESTIEAU , Pierre & ROCHET, Jean-Charles, . "Direct versus indirect taxation: the design of the tax structure revisited," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1528, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Wilhelm, M.O., 1990. "Bequest Behavior And The Effect Of Heirs' Earnings: Testing The Altruistic Model Of Bequests," Papers, Pennsylvania State - Department of Economics 9-90-12, Pennsylvania State - Department of Economics.
  7. BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU, Pierre, 1997. "Redistribution with unobservable bequests: a case for taxing capital income," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 1997070, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Saez, Emmanuel, 2002. "The desirability of commodity taxation under non-linear income taxation and heterogeneous tastes," Journal of Public Economics, Elsevier, Elsevier, vol. 83(2), pages 217-230, February.
  9. Johann K. Brunner & Susanne Pech, 2008. "Optimum Taxation of Inheritance," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2008-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  10. W. G. Gale & J. K. Scholz, . "Intergenerational transfers and the accumulation of wealth," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1019-93, University of Wisconsin Institute for Research on Poverty.
  11. Emmanuel Farhi & Iván Werning, 2010. "Progressive Estate Taxation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 125(2), pages 635-673, May.
  12. Laitner, J. & Ohlsson, H., 1998. "Bequest Motives: a Comparison of Sweden and the United States," Papers, Uppsala - Working Paper Series 1998:16, Uppsala - Working Paper Series.
  13. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(114), pages 175-208, April.
  14. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, Econometric Society, vol. 54(3), pages 607-22, May.
  15. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, Elsevier, vol. 28(1), pages 59-83, October.
  16. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, Elsevier, vol. 6(1-2), pages 55-75.
  17. Masson, A. & Pestieau, P., . "Bequests motives and models of inheritance: A survey of the literature," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1273, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  18. Mikhail Golosov & Aleh Tsyvinski & Ivan Werning, 2007. "New Dynamic Public Finance: A User's Guide," NBER Chapters, in: NBER Macroeconomics Annual 2006, Volume 21, pages 317-388 National Bureau of Economic Research, Inc.
  19. John Laitner & F. Thomas Juster, 1993. "New evidence on altruism: a study of TIAA-CREF retirees," Discussion Paper / Institute for Empirical Macroeconomics, Federal Reserve Bank of Minneapolis 86, Federal Reserve Bank of Minneapolis.
  20. Arrondel, L. & Laferrere, A., 1998. "Taxation and Wealth Transmission in France," DELTA Working Papers, DELTA (Ecole normale supérieure) 98-13, DELTA (Ecole normale supérieure).
  21. Webley,Paul & Robben,Henry & Elffers,Henk & Hessing,Dick (ed.), 2010. "Tax Evasion," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521130615.
  22. CREMER, Helmuth & PESTIEAU, Pierre, . "Wealth transfer taxation: a survey of the theoretical literature," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1874, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  23. Santiago Budria Rodriguez & Javier Diaz-Gimenez & Vincenzo Quadrini & Jose-Victor Rior-Rull, 2002. "Updated facts on the U.S. distributions of earnings, income, and wealth," Quarterly Review, Federal Reserve Bank of Minneapolis, Federal Reserve Bank of Minneapolis, issue Sum, pages 2-35.
  24. Seade, Jesus, 1982. "On the Sign of the Optimum Marginal Income Tax," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 49(4), pages 637-43, October.
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
  1. Johann K. Brunner & Susanne Pech, 2011. "Optimal taxation of wealth transfers when bequests are motivated by joy of giving," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2011-12, Department of Economics, Johannes Kepler University Linz, Austria.
  2. Johann Brunner & Susanne Pech, 2013. "Taxing bequests and consumption in the steady state," Economics working papers, Department of Economics, Johannes Kepler University Linz, Austria 2013-15, Department of Economics, Johannes Kepler University Linz, Austria.
  3. Johann K. Brunner, 2010. "Die Erbschaftssteuer im Modell der optimalen Besteuerung," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2010-18, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  4. Johann K. Brunner, 2012. "The Bequest Tax as Long-Term Care Insurance," CESifo Working Paper Series 3901, CESifo Group Munich.

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:ces:ceswps:_2977. 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: (Julio Saavedra).

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.