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Salience of Inherited Wealth and the Support for Inheritance Taxation

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  • Bastani, Spencer

    (Department of Economics and Statistics, Linnaeus University)

  • Waldenström, Daniel

    (Paris School of Economics)

Abstract

We study how attitudes to inheritance taxation are influenced by information about the role of inherited wealth in society. Using a randomized experiment in a register-linked Swedish survey, we find that informing individuals about the large aggregate importance of inherited wealth and its link to inequality of opportunity significantly increases the support for inheritance taxation. The effect is almost uniform across socio-economic groups and survives a battery of robustness tests. Changes in the perceived economic importance of inherited wealth and altered views on whether luck matters most for economic success appear to be the main driving factors behind the treatment effect. Our findings suggest that the low salience of inherited wealth could be one explanation behind the relatively marginalized role of inheritance taxation in developed economies.

Suggested Citation

  • Bastani, Spencer & Waldenström, Daniel, 2019. "Salience of Inherited Wealth and the Support for Inheritance Taxation," Working Paper Series 1260, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1260
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    References listed on IDEAS

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    1. Waldenström, Daniel, 2017. "Wealth-Income Ratios in a Small, Developing Economy: Sweden, 1810–2014," The Journal of Economic History, Cambridge University Press, vol. 77(1), pages 285-313, March.
    2. Bastani, Spencer & Waldenström, Daniel, 2018. "How Should Capital Be Taxed? Theory and Evidence from Sweden," IZA Discussion Papers 11475, Institute of Labor Economics (IZA).
    3. Daniel Waldenström, 2016. "The national wealth of Sweden, 1810--2014," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 64(1), pages 36-54, March.
    4. Thomas Piketty, 2011. "On the Long-Run Evolution of Inheritance: France 1820--2050," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1071-1131.
    5. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    6. Elinder, Mikael & Erixson, Oscar & Waldenström, Daniel, 2018. "Inheritance and wealth inequality: Evidence from population registers," Journal of Public Economics, Elsevier, vol. 165(C), pages 17-30.
    7. Jacob Lundberg & Daniel Waldenström, 2018. "Wealth Inequality in Sweden: What can we Learn from Capitalized Income Tax Data?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 517-541, September.
    8. Magnus Henrekson & Daniel Waldenström, 2016. "Inheritance taxation in Sweden, 1885–2004: the role of ideology, family firms, and tax avoidance," Economic History Review, Economic History Society, vol. 69(4), pages 1228-1254, November.
    9. Simon Halphen Boserup & Wojciech Kopczuk & Claus Thustrup Kreiner, 2018. "Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood," Economic Journal, Royal Economic Society, vol. 128(612), pages 514-544, July.
    10. Wolff, Edward N., 2015. "Inheriting Wealth in America: Future Boom or Bust?," OUP Catalogue, Oxford University Press, number 9780199353958.
    11. Nekoei, Arash & Seim, David, 2018. "How do Inheritances Shape Wealth Inequality? Theory and Evidence from Sweden," CEPR Discussion Papers 13199, C.E.P.R. Discussion Papers.
    12. Henrik Hammar & Sverker C. Jagers & Katarina Nordblom, 2008. "Attitudes towards Tax Levels: A Multi-Tax Comparison," Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 523-543, December.
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    Cited by:

    1. Andreas THIEMANN & Diana OGNYANOVA & Edlira NARAZANI & Balazs PALVOLGYI & Athena Kalyva & Alexander LEODOLTER, 2021. "Shifting the Tax Burden away from Labour towards Inheritances and Gifts – Simulation results for Germany," JRC Working Papers on Taxation & Structural Reforms 2021-16, Joint Research Centre (Seville site).
    2. Jesse Bricker & Sarena F. Goodman & Alice Henriques Volz & Kevin B. Moore, 2021. "A Wealth of Information: Augmenting the Survey of Consumer Finances to Characterize the Full U.S. Wealth Distribution," Finance and Economics Discussion Series 2021-053, Board of Governors of the Federal Reserve System (U.S.).
    3. Campos-Vazquez, Raymundo M. & Krozer, Alice & Ramírez-Álvarez, Aurora A. & de la Torre, Rodolfo & Velez-Grajales, Roberto, 2022. "Perceptions of inequality and social mobility in Mexico," World Development, Elsevier, vol. 151(C).
    4. Campos-Vazquez, Raymundo M. & Krozer, Alice & Ramírez-Álvarez, Aurora A. & de la Torre, Rodolfo & Velez-Grajales, Roberto, 2022. "Perceptions of inequality and social mobility in Mexico," World Development, Elsevier, vol. 151(C).
    5. Morgan, Marc & Pedro Carvalho Junior, 2021. "Taxing wealth:: general principles, international perspectives and lessons for Brazil," Brazilian Journal of Political Economy, Brazilian Journal of Political Economy (Brazil), vol. 41(1), Jan-Mar.
    6. Chirvi, Malte & Schneider, Cornelius, 2019. "Stated preferences for capital taxation - tax design, misinformation and the role of partisanship," arqus Discussion Papers in Quantitative Tax Research 242, arqus - Arbeitskreis Quantitative Steuerlehre.
    7. Marc Morgan & Pedro Carvalho Junior, 2021. "Taxing wealth: general principles, international perspectives and lessons for Brazil," Brazilian Journal of Political Economy, Center of Political Economy, vol. 41(1), pages 44-64.
    8. Dietmar Fehr & Daniel Müller & Marcel Preuss, 2020. "Social Mobility Perceptions and Inequality Acceptance," Working Papers 2020-02, Faculty of Economics and Statistics, University of Innsbruck.

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    More about this item

    Keywords

    Capital taxation; Tax attitudes; Equality of opportunity; Randomized experiment;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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