NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Estate Taxation, Entrepreneurship, and Wealth

Marco Cagetti, Mariacristina De Nardi

NBER Working Paper No. 13160
Issued in June 2007
NBER Program(s):   PE

We study the effects of abolishing estate taxation in a quantitative and realistic framework that includes the key features that policy makers are worried about: business investment, borrowing constraints, estate transmission, and wealth inequality. We use our model to estimate effective estate taxation. We consider various tax instruments to reestablish fiscal balance when abolishing estate taxation. We find that abolishing estate taxation would not generate large increases in inequality, and would, in some cases, generate increases in aggregate output and capital accumulation. If, however, the resulting revenue shortfall were financed through increased income or consumption taxation, the immensely rich, and the old among those in particular, would experience a welfare gain, at the cost of welfare losses for the vast majority of the population.

download in pdf format
   (281 K)

email paper

This paper is available as PDF (281 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13160

Published: Marco Cagetti & Mariacristina De Nardi, 2009. "Estate Taxation, Entrepreneurship, and Wealth," American Economic Review, American Economic Association, vol. 99(1), pages 85-111, March.

Users who downloaded this paper also downloaded these:
Cagetti and De Nardi w12550 Wealth Inequality: Data and Models
De Nardi, French, and Jones w15149 Why do the Elderly Save? The Role of Medical Expenses
Kopczuk w15741 Economics of estate taxation: a brief review of theory and evidence
Gale and Slemrod w8205 Rethinking the Estate and Gift Tax: Overview
Holtz-Eakin and Marples w8261 Distortion Costs of Taxing Wealth Accumulation: Income Versus Estate Taxes
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us