Jump to ContentJump to Main Navigation

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Mendola, Mariapia / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

4 Issues per year


IMPACT FACTOR 2013: 0.432
5-year IMPACT FACTOR: 0.710

SCImago Journal Rank (SJR): 0.956
Source Normalized Impact per Paper (SNIP): 0.734

VolumeIssuePage

Optimal Taxation of Wealth Transfers When Bequests are Motivated by Joy of Giving

Johann K. Brunner1 / Susanne Pech2

1Johannes Kepler University of Linz,

2Johannes Kepler University of Linz,

Citation Information: The B.E. Journal of Economic Analysis & Policy. Volume 12, Issue 1, ISSN (Online) 1935-1682, DOI: 10.1515/1935-1682.3070, March 2012

Publication History

Published Online:
2012-03-16

Abstract

Inherited wealth creates a second distinguishing characteristic of individuals, in addition to earning abilities. We incorporate this fact into a model of optimal labor-income taxation, with bequests motivated by joy of giving. We find that taxes on bequests or on inheritances allow further redistribution if, in the parent generation, initial wealth and earning abilities are positively related. However, these taxes distort the bequest decision and thus, the overall effect on social welfare is ambiguous. On the other hand, a tax on all expenditures of a generation (a uniform tax on consumption plus bequests) has the same redistributive effect as an inheritance tax but does not distort the bequest decision.

Keywords: optimal taxation; inheritance tax; expenditure tax; intergenerational wealth transfer

Comments (0)

Please log in or register to comment.
Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.