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Behavioral responses to inheritance tax: Evidence from notches in France

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  • Goupille-Lebret, Jonathan
  • Infante, Jose

Abstract

For the first time, we exploit quasi-experimental variation to investigate the impact of inheritance taxation on wealth accumulation. Using bunching and difference-in-differences methods, we directly estimate several behavioral responses during lifetime, rather than relying solely on observations at death. Our empirical findings shed new light upon wealth accumulation and bequest motives. Taken together, the small responses to inheritance tax estimated cannot be supported by the desire to retain control over wealth.

Suggested Citation

  • Goupille-Lebret, Jonathan & Infante, Jose, 2018. "Behavioral responses to inheritance tax: Evidence from notches in France," Journal of Public Economics, Elsevier, vol. 168(C), pages 21-34.
  • Handle: RePEc:eee:pubeco:v:168:y:2018:i:c:p:21-34
    DOI: 10.1016/j.jpubeco.2018.09.016
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    Cited by:

    1. Bozio, Antoine & Garbinti, Bertrand & Goupille-Lebret, Jonathan & Guillot, Malka & Piketty, Thomas, 2020. "Predistribution vs. Redistribution: Evidence from France and the U.S," CEPR Discussion Papers 15415, C.E.P.R. Discussion Papers.
    2. Bertrand Garbinti & Frédérique Savignac, 2020. "Accounting for Intergenerational Wealth Mobility in France over the 20th Century: Method and Estimations," Working papers 776, Banque de France.
    3. Bastani, Spencer & Waldenström, Daniel, 2018. "How Should Capital Be Taxed? Theory and Evidence from Sweden," IZA Discussion Papers 11475, Institute of Labor Economics (IZA).
    4. Arun Advani & Hannah Tarrant, 2021. "Behavioural responses to a wealth tax," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 509-537, September.
    5. Glogowsky, Ulrich, 2021. "Behavioral responses to inheritance and gift taxation: Evidence from Germany," Journal of Public Economics, Elsevier, vol. 193(C).
    6. repec:ces:ifodic:v:16:y:2018:i:2:p:50000000002755 is not listed on IDEAS
    7. Kopczuk, Wojciech, 2016. "U.S. capital gains and estate taxation: a status report and directions for a reform," CEPR Discussion Papers 11208, C.E.P.R. Discussion Papers.
    8. Laura Khoury, 2021. "Unemployment Benefits and the Timing of Redundancies," Working Papers halshs-02057145, HAL.
    9. Sommer, Eric, 2017. "Wealth Transfers and Tax Planning: Evidence for the German Bequest Tax," IZA Discussion Papers 11120, Institute of Labor Economics (IZA).
    10. KRENEK Alexander & SCHRATZENSTALLER Margit & GRUNBERGER Klaus & THIEMANN Andreas, 2022. "INTAXMOD - Inheritance and Gift Taxation in the Context of Ageing," JRC Working Papers on Taxation & Structural Reforms 2022-04, Joint Research Centre (Seville site).
    11. Bertrand Garbinti & Jonathan Goupille-Lebret, 2019. "Income and Wealth Inequality in France: Developments and Links over the Long Term," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 510-511-5, pages 69-87.
    12. Garbinti, Bertrand & Goupille-Lebret, Jonathan & Piketty, Thomas, 2018. "Income inequality in France, 1900–2014: Evidence from Distributional National Accounts (DINA)," Journal of Public Economics, Elsevier, vol. 162(C), pages 63-77.
    13. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2021. "Accounting for Wealth-Inequality Dynamics: Methods, Estimates, and Simulations for France," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 620-663.
    14. Spencer Bastani & Daniel Waldenström, 2020. "How Should Capital Be Taxed?," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 812-846, September.
    15. Laura Khoury, 2019. "Unemployment Benefits and the Timing of Redundancies: Evidence from Bunching," PSE Working Papers halshs-02057145, HAL.
    16. Bertrand Garbinti & Jonathan Goupille-Lebret, 2018. "The Impact of Inheritance and Transfer Taxation on Economic Behaviours and Inequality: A Literature Review for France," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(02), pages 13-18, August.
    17. Bertrand GARBINTI & Jonathan GOUPILLE-LEBRET, 2018. "The evolution of wealth inequality in France from 1800 to 2014," Rue de la Banque, Banque de France, issue 66, July.
    18. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2021. "Accounting for Wealth-Inequality Dynamics: Methods, Estimates, and Simulations for France," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 620-663.
    19. Escobar, Sebastian & Ohlsson, Henry & Selin, Håkan, 2019. "Taxes, frictions and asset shifting: when Swedes disinherited themselves," Working Paper Series 2019:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    20. Glogowsky, Ulrich, 2016. "Behavioral Responses to Wealth Transfer Taxation: Bunching Evidence from Germany," VfS Annual Conference 2016 (Augsburg): Demographic Change 145922, Verein für Socialpolitik / German Economic Association.
    21. Wojciech Kopczuk & Eric Zwick, 2020. "Business Incomes at the Top," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 27-51, Fall.
    22. Bozio, Antoine & Garbinti, Bertrand & Goupille-Lebret, Jonathan & Guillot, Malka & Piketty, Thomas, 2020. "Predistribution vs. Redistribution: Evidence from France and the U.S," CEPR Discussion Papers 15415, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Taxation; Behavioral responses; Bunching; Bequest;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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