Making Bequests Without Spoiling Children: Bequests as an Implicit Optimal Tax Structure and the Possibility That Altruistic Bequests are not Equaliz
AbstractThis paper examines the bequest\gift behavior of altruistic parents who do not know their children's abilities and cannot observe their children's work effort. Parents are likely to respond to this information problem by making larger bequests to higher earning children and by using their transfers implicitly either to tax at the margin low earning children or to subsidize at the margin high earning children. These implicit tax rates may be quite large, despite the fact that total transfers are small. The paper suggests that labor supply studies should take into account potential implicit family taxation as wall as official government taxation. In addition, the fact that the family may play an implicit role in taxation means that there may be less need for the government to play such a role.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2735.
Date of creation: Oct 1988
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- Ernesto Villanueva, 2002.
"Parental altruism under imperfect information: Theory and evidence,"
Economics Working Papers
650, Department of Economics and Business, Universitat Pompeu Fabra.
- Ernesto Villanueva, 2003. "Parental altruism under imperfect information: theory and evidence," Working Papers 19, Barcelona Graduate School of Economics.
- Ernesto Villanueva, 2001. "Parental altruism under imperfect information: Theory and evidence," Economics Working Papers 566, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2002.
- Aysegül Sahin, 2004. "The incentive effects of higher education subsidies on student effort," Staff Reports 192, Federal Reserve Bank of New York.
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