TY  - JOUR
AU  - Slemrod,Joel
AU  - Kopczuk,Wojciech
TI  - The Impact of the Estate Tax on the Wealth Accumulation and Avoidance Behavior of Donors
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7960
PY  - 2000
Y2  - October 2000
UR  - http://www.nber.org/papers/w7960
L1  - http://www.nber.org/papers/w7960.pdf
N1  - Author contact info:
Joel Slemrod
University of Michigan Business School
701 Tappan Street
Room R5396
Ann Arbor, MI  48109-1234
Tel: 734/936-3914
Fax: 734-615-4323
E-Mail: jslemrod@umich.edu

Wojciech Kopczuk
Columbia University
420 West 118th Street, Rm. 1022 IAB
MC 3323
New York, NY  10027
Tel: 212/854-2519
Fax: 212/864-8059
E-Mail: wk2110@columbia.edu
AB  - Using estate tax return data from 1916 to 1996, we investigate the impact of the estate tax on reported estates, which reflects the impact of the tax on both wealth accumulation and avoidance.  An aggregate measure of reported estates is generally negatively correlated with summary measures of the level of estate taxation, holding constant other influences.  In pooled cross-sectional analysis that makes use of individual decedent information, the relationship between the concurrent tax rate and the reported estate is fragile and sensitive to the set of instruments that are used to capture exogenous tax rate variation. However, the negative effect of taxes appears to be stronger for those who die at a more advanced age and with a will, both of which are consistent with the theory of how estate taxes affect altruistic individuals.  Finally, we find that the tax rate that prevailed at age 45 or ten years before death is more clearly (negatively) associated with reported estates than the tax rate prevailing at death.  Future research should concentrate on developing lifetime measures of the effective tax rates and on better measurements of the effective tax rate for married couples.
ER  -