Progressive Estate Taxation

Emmanuel Farhi and Iván Werning

No 12600, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: For an economy with altruistic parents facing productivity shocks, the optimal estate taxation is progressive: fortunate parents should face lower net returns on their inheritances. This progressivity reflects optimal mean reversion in consumption, which ensures that a long-run steady state exists with bounded inequality - avoiding immiseration.

JEL-codes: E6 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pub
Note: EFG PE
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Citations: View citations in EconPapers (15)

Published as Farhi, Emmanuel and Ivan Werning. “Progressive Estate Taxation." Quarterly Journal of Economics 125, 2 (May 2010): 635-673..

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