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Alleged tax competition: The mysterious death of bequest taxes in Switzerland

Listed author(s):
  • Brülhart, Marius
  • Parchet, Raphaël

Interjurisdictional competition over mobile tax bases is an easily understood mechanism, but actual tax-base elasticities are difficult to estimate. Political pressure for reducing tax rates could therefore be based on erroneous estimates of the mobility of tax bases. We show that tax competition provided the most prominent argument in the policy debates leading to a succession of reforms of bequest taxation by Swiss cantons. Yet, canton-level panel data spanning multiple bequest tax reforms over a 36-year period suggest the relevant tax base, high-income retirees, to be relatively inelastic with respect to tax rates. The alleged pressures of tax competition did not seem in reality to exist.

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File URL: http://www.sciencedirect.com/science/article/pii/S004727271300251X
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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 111 (2014)
Issue (Month): C ()
Pages: 63-78

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Handle: RePEc:eee:pubeco:v:111:y:2014:i:c:p:63-78
DOI: 10.1016/j.jpubeco.2013.12.009
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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