Determinants of inheritance and gifts taxation in the European Union

Janusz Kudła, Woźniak Rafał, Walczyk Konrad, Dudek Maciej and Kruszewski Robert
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Woźniak Rafał: Faculty of Economic Sciences, University of Warsaw, Warsaw, Poland
Walczyk Konrad: Faculty of Economic Sciences, University of Warsaw, Warsaw, Poland
Dudek Maciej: Department of Economics, University of Michigan, Ann Arbor, USA
Kruszewski Robert: Institute of Mathematical Economics, SGH Warsaw School of Economics, Warsaw, Poland

International Journal of Management and Economics, 2023, vol. 59, issue 3, 225-242

Abstract: Inheritance and gift taxation vary widely among countries in both the design and tax burden. We analyze the impact of a series of factors, such as the country’s affluence, political preferences, preferences for equity, aging ratio, fiscal standing of the state, and the country’s size, on inheritance tax systems. The applied methods involve the random effects ordered logistic regression for tax design and tobit correlated-random effect models for tax revenues. We find that inheritance tax design is mainly determined by demographic factors while tax revenues depend on a broader group of factors including political orientation of a state, condition of an economy, and the size of a country. Higher preferences for equal distribution and commitment to democratic norms are associated with higher tax revenues. Good economic condition of the state boosts revenues, as does country’s higher population. The results shed some light on future evolution of inheritance taxation.

Keywords: inheritance tax; gift tax; bequest; wealth; dynamic panel regression (search for similar items in EconPapers)
JEL-codes: D31 H24 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:59:y:2023:i:3:p:225-242:n:7

DOI: 10.2478/ijme-2023-0004

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