NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Estate Taxation with Altruism Heterogeneity

Emmanuel Farhi, Iván Werning

NBER Working Paper No. 18792
Issued in February 2013
NBER Program(s):   EFG   PE

We develop a theory of optimal estate taxation in a model where bequest inequality is driven by differences in parental altruism. We show that a wide range of results are possible, from positive taxes to subsidies, depending on redistributive objectives implicit in the cardinal specification of utility and social welfare functions. We propose a normalization that is helpful in classifying these different possibilities. We isolate cases where the optimal policy bans negative bequests and taxes positive bequests, features present in most advanced countries.

download in pdf format
   (254 K)

email paper

This paper is available as PDF (254 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18792

Published: Emmanuel Farhi & Iván Werning, 2013. "Estate Taxation with Altruism Heterogeneity," American Economic Review, American Economic Association, vol. 103(3), pages 489-95, May. citation courtesy of

Users who downloaded this paper also downloaded these:
Kopczuk w18747 Incentive Effects of Inheritances and Optimal Estate Taxation
Farhi and Werning w16749 Insurance and Taxation over the Life Cycle
Kopczuk w18584 Taxation of Intergenerational Transfers and Wealth
Solon w18790 Theoretical Models of Inequality Transmission across Multiple Generations
Hall w18797 Fiscal Stability of High-Debt Nations under Volatile Economic Conditions
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

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

Contact Us