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Tax avoidance and intra-family transfers

  • Nordblom, Katarina
  • Ohlsson, Henry

To what extent do people avoid taxes on intra-family transfers (bequests and gifts), and how would integration (unification) of the different transfers taxes affect tax avoidance? These issues are important for families and their welfare, as well as for governments and their possibilities of raising revenue from transfer taxes. In this paper we study the effects of transfer taxes on altruistic parents’ transfers to their children. Using a theoretical model we find that altruistic parents do not necessarily tax minimize. However, in some cases when they do, there is an infinitely large excess burden of a transfer tax. We also find that integration of transfer taxes reduces tax avoidance. All tax avoidance is eliminated with complete integration.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 90 (2006)
Issue (Month): 8-9 (September)
Pages: 1669-1680

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Handle: RePEc:eee:pubeco:v:90:y:2006:i:8-9:p:1669-1680
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  12. Arrondel, L. & Laferrere, A., 1998. "Taxation and Wealth Transmission in France," DELTA Working Papers 98-13, DELTA (Ecole normale supérieure).
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  16. Joulfaian, David, 2004. "Gift taxes and lifetime transfers: time series evidence," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1917-1929, August.
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