Dying to Save Taxes: Evidence from Estate Tax Returns on the Death Elasticity
NBER Working Paper No. 8158
This paper examines data from U.S. federal tax returns to shed light on whether the timing of death is responsive to its tax consequences. We investigate the temporal pattern of deaths around the time of changes in the estate tax system periods when living longer, or dying sooner, could significantly affect estate tax liability. We find some evidence that there is a small death elasticity, although we cannot rule out that what we have uncovered is ex post doctoring of the reported date of death. However, the fact that we find that postponement, rather than acceleration, of death is more likely to occur suggests that this phenomenon is at last partly a real (albeit timing) response to taxation.
Document Object Identifier (DOI): 10.3386/w8158
Published: Review of Economics and Statistics, 2003, 85(2), 256-265.
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