Working Paper: NBER ID: w15741
Authors: Wojciech Kopczuk
Abstract: This paper provides a non-technical overview of the economic arguments related to the desirability of transfer taxation and a summary of empirical evidence surrounding these issues. Understanding optimal transfer taxation throughout the distribution requires understanding the nature of a bequest motive, a topic on which there is little consensus. However, I argue that progress still can be made on the question of desirability and optimal level of estate taxation at the top of the distribution, because interpersonal externalities implied by the presence of bequest motive are irrelevant from the welfare point of view when the focus is on the wealthy. I also examine the role of negative externalities from wealth concentration in providing justification for considering this type of taxation.
Keywords: estate taxation; transfer taxation; bequest motive; wealth concentration
JEL Codes: D6; D9; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bequest motive (D64) | desirability of estate taxation (H24) |
| wealth concentration (D31) | negative externalities (D62) |
| negative externalities (D62) | estate taxation (H24) |
| estate taxation (H24) | wealth distribution (D31) |
| estate taxation (H24) | efficiency effects (D61) |
| avoidance (H26) | marginal tax rates (H29) |