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Premature deaths, accidental bequests and fairness

Author

Listed:
  • Marc Fleurbaey

    (Princeton University)

  • Marie-Louise Leroux

    (UQAM - Université du Québec à Montréal = University of Québec in Montréal)

  • Pierre Pestieau

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Grégory Ponthière

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Stéphane Zuber

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

While little agreement exists regarding the taxation of bequests in general, there is a widely held view that accidental bequests should be subject to a confi…scatory tax. We propose to reexamine the optimal taxation of accidental bequests in an economy where individuals care about what they leave to their offspring in case of premature death. We show that, whereas the conventional 100 % tax view holds under the standard utilitarian social welfare criterion, it does not hold under the ex post egalitarian criterion, which assigns a strong weight to the welfare of unlucky short-lived individuals. From an egalitarian perspective, it is optimal not to tax, but to subsidize accidental bequests. We examine the robustness of those results in a dynamic OLG model of wealth accumulation, and show that, whereas the sign of the optimal tax on accidental bequests depends on the form of the joy of giving motive, it remains true that the 100 % tax view does not hold under the ex post egalitarian criterion.

Suggested Citation

  • Marc Fleurbaey & Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière & Stéphane Zuber, 2017. "Premature deaths, accidental bequests and fairness," Working Papers halshs-01649527, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01649527
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01649527
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Marie‐Louise Leroux & Pierre Pestieau & Gregory Ponthiere, 2024. "The optimal design of assisted reproductive technologies policies," Health Economics, John Wiley & Sons, Ltd., vol. 33(7), pages 1454-1479, July.
    2. Marie‐Louise Leroux & Pierre Pestieau, 2022. "Age‐related taxation of bequests in the presence of a dependency risk," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(1), pages 92-119, February.
    3. Harun Onder & Pierre Pestieau & Grégory Ponthière, 2019. "Equivalent income versus equivalent lifetime: does the metric matter?," PSE Working Papers halshs-02187803, HAL.
    4. Juan D. Moreno-Ternero & Lars Peter Østerdal, 2023. "Entitlements to continued life and the evaluation of population health," Review of Economic Design, Springer;Society for Economic Design, vol. 27(3), pages 561-579, September.
    5. Decerf,Benoit Marie A & Maniquet,François, 2021. "Fair Inheritance Taxation," Policy Research Working Paper Series 9804, The World Bank.
    6. Johanna Etner & Natacha Raffin & Thomas Seegmuller, 2018. "Male reproductive health, fairness and optimal policies," EconomiX Working Papers 2018-32, University of Paris Nanterre, EconomiX.
    7. Leroux, Marie-Louise & Pestieau, Pierre, 2021. "Age and health related inheritance taxation," LIDAM Discussion Papers CORE 2021002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Philipp Krug & Dominika Langenmayr, 2024. "Taxing Transitions: Inheritance Tax and Family Firm Succession," Working Papers 233, Bavarian Graduate Program in Economics (BGPE).
    9. Berenice Anne Neumann & Niklas Scheuer, 2024. "The Impact of Bequest Taxation on Wealth Inequality - Theory and Evidence," Research Papers in Economics 2024-05, University of Trier, Department of Economics.
    10. Ponthiere, Gregory, 2023. "Social Insurance against a Short Life: Ante-Mortem versus Post-Mortem Policies," GLO Discussion Paper Series 1342, Global Labor Organization (GLO).

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    More about this item

    Keywords

    mortality; accidental bequests; optimal taxation; egalitarianism; OLG models;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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