The Distributional Burden of Taxing Estates and Unrealized Capital Gains at the Time of Death
AbstractThe 1998 Survey of Consumer Finances provides information on household wealth ownership that can be used to estimate the effect of changing the Unified Estate and Gift Tax Credit on estate tax revenues. The survey also includes data on the prices at which assets were purchased, along with information on their market values. This makes it possible to compare the revenue yield and the distributional consequences of taxing estates with those of taxing unrealized capital gains on assets held by individuals who die. This paper uses data from the Survey of Consumer Finances to estimate the revenue effects of changes in both estate tax provisions and capital gains tax rules. It finds that among those with small estates ($1 million or less), taxing capital gains at death would collect more revenue than the current estate tax from roughly half of the decedents. For those with larger estates, replacing the estate tax with a tax on unrealized gains at death would result in a substantial reduction in total tax payments. The revenue estimates and distributional analyses assume no change in the current capital gains realization behavior of taxpayers, even if the tax law changes. This is an important limitation, and the paper notes several directions for further research that might help to relax this assumption.
Download InfoIf 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.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7811.
Date of creation: Jul 2000
Date of revision:
Note: AG PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-07-27 (All new papers)
- NEP-PBE-2000-07-27 (Public Economics)
- NEP-POL-2000-07-27 (Positive Political Economics)
- NEP-PUB-2000-07-27 (Public Finance)
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.:
- Olivia S. Mitchell, 1999.
"New Evidence on the Money's Worth of Individual Annuities,"
American Economic Review,
American Economic Association, vol. 89(5), pages 1299-1318, December.
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, . "New Evidence on the Money's Worth of Individual Annuities," Pension Research Council Working Papers 97-9, Wharton School Pension Research Council, University of Pennsylvania.
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, 2000. "New Evidence on the Money's Worth of Individual Annuities," NBER Working Papers 6002, National Bureau of Economic Research, Inc.
- O. Attanasio & H. W. Hoynes, .
"Differential mortality and wealth accumulation,"
Institute for Research on Poverty Discussion Papers
1079-96, University of Wisconsin Institute for Research on Poverty.
- Orazio P. Attanasio & Hilary W. Hoynes, 1995. "Differential Mortality and Wealth Accumulation," NBER Working Papers 5126, National Bureau of Economic Research, Inc.
- Attanasio, O. & Hoynes, H.W., 1995. "Differential mortality and wealth accumulation," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- B. Douglas Bernheim, 1987.
"Does the Estate Tax Raise Revenue?,"
NBER Working Papers
2087, National Bureau of Economic Research, Inc.
- Joulfaian, David, 1991. "Charitable Bequests and Estate Taxes," National Tax Journal, National Tax Association, vol. 44(2), pages 169-80, June Cita.
- David Joulfaian, 2000. "Estate Taxes and Charitable Bequests by the Wealthy," NBER Working Papers 7663, National Bureau of Economic Research, Inc.
- Auten, Gerald & Joulfaian, David, 2001. "Bequest taxes and capital gains realizations," Journal of Public Economics, Elsevier, vol. 81(2), pages 213-229, August.
- Joel Slemrod & Wojciech Kopczuk, 2000. "The Impact of the Estate Tax on the Wealth Accumulation and Avoidance Behavior of Donors," NBER Working Papers 7960, National Bureau of Economic Research, Inc.
- James Poterba, 1998. "Estate and Gift Taxes and Incentives for Inter Vivos Giving in the United States," NBER Working Papers 6842, National Bureau of Economic Research, Inc.
- James Poterba, 1997. "The Estate Tax and After-Tax Investment Returns," NBER Working Papers 6337, National Bureau of Economic Research, Inc.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Comment on Murphy and Thaler
by ssumner in The Money Illusion on 2010-11-14 18:38:56
- Three Wrongs Don't Make a Right: Thaler on Estate Taxes
by David Friedman in Ideas on 2010-11-07 16:43:00
by himaginary in himaginaryの日記 on 2010-11-21 08:00:00
- Poterba, James, 2001. "Estate and gift taxes and incentives for inter vivos giving in the US," Journal of Public Economics, Elsevier, vol. 79(1), pages 237-264, January.
- John Laitner, 2001. "Modeling the Macroeconomic Implications of Social Security Reform," Working Papers wp015, University of Michigan, Michigan Retirement Research Center.
- John Laitner, 2001. "Wealth Accumulation in the U.S.: Do Inheritances and Bequests Play a Significant Role?," Working Papers wp019, University of Michigan, Michigan Retirement Research Center.
- Jeffrey R. Brown & Scott J. Weisbenner, 2002. "Is a Bird in Hand Worth More than a Bird in the Bush? Intergenerational Transfers and Savings Behavior," NBER Working Papers 8753, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.