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The Estate Tax and Inter Vivos Transfers over Time


  • Kathleen McGarry


The strong dislike evidenced by the American public towards the estate tax suggests that the wealthy wish to transfer resources to their heirs tax-free and would thus exploit mechanisms allowing them to reduce the tax burden whenever possible. However, I find strong evidence that the wealthy fail to utilize what is perhaps the simplest method of tax avoidance--that of making transfers to eventual heirs up to the annual exclusion. Instead they transfer far less than the amount permitted by the tax code, whether measured in cross-section or over time. In failing to give more, they forgo significant tax savings.

Suggested Citation

  • Kathleen McGarry, 2013. "The Estate Tax and Inter Vivos Transfers over Time," American Economic Review, American Economic Association, vol. 103(3), pages 478-483, May.
  • Handle: RePEc:aea:aecrev:v:103:y:2013:i:3:p:478-83
    Note: DOI: 10.1257/aer.103.3.478

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      Cited by:

      1. James R Hines Jr & Niklas Potrafke & Marina Riem & Christoph Schinke, 2015. "Inter vivos transfers of ownership in family firms," Working Papers 1523, Oxford University Centre for Business Taxation.

      More about this item

      JEL classification:

      • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
      • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
      • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law


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