Working Paper: NBER ID: w18584
Authors: Wojciech Kopczuk
Abstract: In this chapter, I review empirical and theoretical literature on taxation of intergenerational transfers (estates, bequests, inheritances, inter vivos gifts) and wealth. The main message may be summarized as follows. Empirical evidence on bequest motivations and responses to estate taxation is spotty and much remains be done, but what we know points in the direction of (1) mixed motives (2) heterogeneity of preferences and (3) importance of retaining control over wealth. These patterns are important for normative analysis of taxation toward the top of the distribution. Theoretical work should further focus on understanding implications of inequality of inherited wealth: the topic that has been neglected in the past, even though it is closely related to -- more carefully studied, but arguably much less important in practice -- externalities from giving. Potential externalities from wealth accumulation and concentration are yet to be seriously addressed.
Keywords: Taxation; Intergenerational Transfers; Wealth; Bequests; Estate Taxation
JEL Codes: D31; E21; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| taxation of intergenerational transfers (H24) | wealth accumulation (E21) |
| bequest motives (D64) | responses to estate taxation (H24) |
| heterogeneity of preferences (D11) | responses to transfer taxation (H24) |
| externalities from giving (D62) | justification for subsidies rather than taxes on bequests (H24) |
| inequality in inherited wealth (D31) | arguments for positive taxation of bequests (H24) |