Estate Taxation with Altruism Heterogeneity
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Werning_Estate taxation.pdf
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1 MB
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Author(s)
Farhi, Emmanuel
Werning, Ivan
Date Issued
May 2013
Journal
American Economic Review
Publisher
American Economic Association
Citation
Farhi, Emmanuel, and Ivan Werning. “Estate Taxation with Altruism Heterogeneity.” American Economic Review 103, no. 3 (May 2013): 489-495. © 2013 by the American Economic Association
Version
Final published version
Abstract
We develop a theory of optimal estate taxation in a model where bequest inequality is driven by differences in parental altruism. We show that a wide range of results are possible, from positive taxes to subsidies. The results depend on redistributive objectives implicit in the cardinal specification of utility and social welfare functions. We propose a normalization that is helpful in classifying these different possibilities. We isolate cases where the optimal policy bans negative bequests and taxes positive bequests, features present in most advanced countries.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.103.3.489
