Optimum taxation of bequests in a model with initial wealth

Johann Brunner () and Susanne Pech ()

No 2010-02, NRN working papers from The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria

Abstract: We formulate an optimum-taxation model, where parents leave bequests to their descendants for altruistic reasons. In contrast to the standard model, individuals differ not only in earning abilities, but also ininitial (inherited) wealth. In this model a redistributive motive for an inheritance tax - which is equivalent to a uniform tax on all expenditures - arises, given that initial wealth increases with earning abilities. Its introduction increases intertemporal social welfare or has an ambiguous effect, depending on whether the bequeathing generation can adjust their behaviour and whether the external effect related to altruism is accounted for in the social objective.

Pages: 36 pages
Date: 2010-01
New Economics Papers: this item is included in nep-acc, nep-age and nep-pub
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Optimal Taxation of Bequests in a Model with Initial Wealth (2012)
Working Paper: Optimum Taxation of Bequests in a Model with Initial Wealth (2010)
Working Paper: Optimum taxation of bequests in a model with initial wealth (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:nrnwps:2010_02

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