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Optimal Taxation of Inheritance and Retirement Savings

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  • Yena Park

    (University of Rochester)

Abstract

We study how to jointly design the optimal tax system on the inherited wealth and the retirement savings in an economy where the motives for the retirement savings and the bequests are overlapping. If the retirement savings can serve for both a precautionary saving against the uncertain life cycle and a bequest to the children, the optimal tax system should consider the interaction of the two functions. When the parents are heterogeneous in their earning ability, mortality, and altruism, the correlation of these characteristics and the planner's preferences for redistribution are the key determinant of the sign and shape of the tax system.

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  • Yena Park, 2018. "Optimal Taxation of Inheritance and Retirement Savings," 2018 Meeting Papers 1246, Society for Economic Dynamics.
    • Handle: RePEc:red:sed018:1246
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    References listed on IDEAS

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    6. Canta, Chiara & Cremer, Helmuth, 2019. "Long-term care policy with nonlinear strategic bequests," European Economic Review, Elsevier, vol. 119(C), pages 548-566.
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