What question did this study set out to answer?

Derive tractable, preference-robust formulas for optimal inheritance taxation based on estimable sufficient statistics and assess realistic long-run optimal tax rates.

January 1, 2013Econometrica

A Theory of Optimal Inheritance Taxation

View Full Paper

Ask AI

Bookmark

Discussion

Member takes

Implication

Economic modeling reveals optimal inheritance tax rates between 50% and 60% in calibrated wealth distributions, suggesting substantial taxation balances equity and economic efficiency.

Key Points

Derive tractable, preference-robust formulas for optimal inheritance taxation based on estimable sufficient statistics and assess realistic long-run optimal tax rates.
Formulated dynamic stochastic models incorporating heterogeneous bequest preferences and labor productivities under linear and two-bracket tax structures.
Extended the steady-state framework to incorporate social discounting, partly accidental bequests, and dynastic utility.
Calibrated optimal inheritance tax formulas using wealth and income micro-data from France and the United States.
Expressed long-run optimal inheritance tax rates as explicit functions of aggregate earnings, bequest elasticities with respect to tax rates, wealth concentration parameters, and distributional preferences.
Demonstrated that optimal tax rates are positive and high when bequest elasticity is low, inheritance concentration is high, and social welfare weights favor non-inheritors.
Calculated optimal tax rates between 50% and 60% for typical parameters, with even higher rates indicated for top-bracket bequests.

Cite This Study

A 2013 study studied this question.

synapsesocial.com/papers/6a80e8149fceb4fbd5e3bbaf https://doi.org/10.3982/ecta10712

View Full Paper

Ask AI

Bookmark

Implication

Economic modeling reveals optimal inheritance tax rates between 50% and 60% in calibrated wealth distributions, suggesting substantial taxation balances equity and economic efficiency.

A Theory of Optimal Inheritance Taxation

Discussion

Member takes

Implication

Key Points

Cite This Study

A Theory of Optimal Inheritance Taxation

Discussion

Member takes

Implication

Key Points

Cite This Study

Also Consider

Also Consider