Premature deaths, accidental bequests and fairness

Marc Fleurbaey, Marie-Louise Leroux, Pierre Pestieau, Gregory Ponthiere and Stéphane Zuber

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Abstract: While little agreement exists regarding the taxation of bequests in general, there is a widely held view that accidental bequests should be subjected to a confiscatory tax. We reexamine the optimal taxation of accidental bequests by introducing a concern for compensating individuals for a premature death. Assuming that individuals care about what they leave to their offspring, we show that, whereas the 100 % tax view holds under the utilitarian criterion, the ex post egalitarian criterion (giving priority to the worst-off ex post) implies subsidizing accidental bequests so as to compensate the short-lived. In a second-best setting, compensating the short-lived justifies taxing total bequests at a rate increasing with the age of the deceased. Finally, when the model is extended to an intergenerational setting, accidental bequests cannot be used as a redistributive tool anymore, so that ex post egalitarianism rejoins the 100 % tax view.

Keywords: Mortality; Accidental bequests; Optimal taxation; Compensation; OLG models (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dge and nep-hea
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03454842v1
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Citations: View citations in EconPapers (2)

Published in Scandinavian Journal of Economics, 2022, 124 (3), pp.709-743. ⟨10.1111/sjoe.12478⟩

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Related works:
Journal Article: Premature deaths, accidental bequests, and fairness (2022)
Working Paper: Premature deaths, accidental bequests and fairness (2022)
Working Paper: Premature deaths, accidental bequests and fairness (2022)
Working Paper: Premature deaths, accidental bequests and fairness (2021)
Working Paper: Premature Deaths, Accidental Bequests and Fairness (2017)
Working Paper: Premature deaths, accidental bequests and fairness (2017)
Working Paper: Premature deaths, accidental bequests and fairness (2017)
Working Paper: Premature deaths, accidental bequests and fairness (2017)
Working Paper: Premature deaths, accidental bequests and fairness (2017)
Working Paper: Premature Deaths, Accidental Bequests and Fairness (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-03454842

DOI: 10.1111/sjoe.12478

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