Tax avoidance and intra-family transfers
AbstractTo what extent do people avoid taxes on intra-family transfers (bequests and gifts), and how would integration (unification) of the different transfers taxes affect tax avoidance? These issues are important for families and their welfare, as well as for governments and their possibilities of raising revenue from transfer taxes. In this paper we study the effects of transfer taxes on altruistic parents' transfers to their children. Using a theoretical model we find that altruistic parents do not necessarily tax minimize. However, in some cases when they do, there is an infinitely large excess burden of a transfer tax. We also find that integration of transfer taxes reduces tax avoidance. All tax avoidance is eliminated with complete integration.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 164.
Length: 26 pages
Date of creation: 16 Mar 2005
Date of revision:
Publication status: Published in Journal of Public Economics, 2006, pages 1669-1680.
Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC
tax avoidance; bequests; inheritances; inter vivos gifts; altruism;
Other versions of this item:
- D10 - Microeconomics - - Household Behavior - - - General
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-03-20 (All new papers)
- NEP-LTV-2005-03-20 (Unemployment, Inequality & Poverty)
- NEP-PUB-2005-03-20 (Public Finance)
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