Incentive Effects of Inheritances and Optimal Estate Taxation
I consider nonlinear taxation of income and bequests with a joy-of-giving bequest motive and explicitly characterize the estate tax rate structure that maximizes social planner's welfare function. The solution trades off correction of externality from giving and discouraging effort of children due to income effect generated by bequests. The analysis shows that optimality of a positive tax on bequests in this context rests on the strength of the effect of bequests on behavior of future generations, and suggests that inheritance rather than estate tax is better suited to implement the corresponding policy.
|Date of creation:||Feb 2013|
|Publication status:||published as Wojciech Kopczuk, 2013. "Incentive Effects of Inheritances and Optimal Estate Taxation," American Economic Review, American Economic Association, vol. 103(3), pages 472-77, May.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Saez, Emmanuel, 2002.
"The desirability of commodity taxation under non-linear income taxation and heterogeneous tastes,"
Journal of Public Economics,
Elsevier, vol. 83(2), pages 217-230, February.
- Emmanuel Saez, 2000. "The Desirability of Commodity Taxation under Non-Linear Income Taxation and Heterogeneous Tastes," NBER Working Papers 8029, National Bureau of Economic Research, Inc.
- Wojciech Kopczuk, 2003.
"The Trick Is to Live: Is the Estate Tax Social Security for the Rich?,"
Journal of Political Economy,
University of Chicago Press, vol. 111(6), pages 1318-1341, December.
- Wojciech Kopczuk, 2002. "The Trick is to Live: Is the Estate Tax Social Security for the Rich?," NBER Working Papers 9188, National Bureau of Economic Research, Inc.
- Emmanuel Farhi & Iván Werning, 2010.
"Progressive Estate Taxation,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 125(2), pages 635-673.
- Wojciech Kopczuk, 2012. "Taxation of Intergenerational Transfers and Wealth," NBER Working Papers 18584, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:18747. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.