Estate Taxation with Altruism Heterogeneity
We develop a theory of optimal estate taxation in a model where bequest inequality is driven by differences in parental altruism. We show that a wide range of results are possible, from positive taxes to subsidies. The results depend on redistributive objectives implicit in the cardinal specification of utility and social welfare functions. We propose a normalization that is helpful in classifying these different possibilities. We isolate cases where the optimal policy bans negative bequests and taxes positive bequests, features present in most advanced countries.
Volume (Year): 103 (2013)
Issue (Month): 3 (May)
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- Emmanuel Farhi & Iván Werning, 2010.
"Progressive Estate Taxation,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 125(2), pages 635-673.
- Emmanuel Farhi & Ivan Werning, 2006. "Progressive Estate Taxation," NBER Working Papers 12600, National Bureau of Economic Research, Inc.
- Christopher Connell & Eric Rasmusen, 2012. "Concavifying the Quasiconcave," Working Papers 2012-10, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Diamond, P. A., 1975. "A many-person Ramsey tax rule," Journal of Public Economics, Elsevier, vol. 4(4), pages 335-342, November.
- P. A. Diamond, 1975. "A Many-Person Ramsey Tax Rule," Working papers 146, Massachusetts Institute of Technology (MIT), Department of Economics.
- J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Oxford University Press, vol. 38(2), pages 175-208. Full references (including those not matched with items on IDEAS)
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