Transfer Motives and Tax Policy

Louis Kaplow ()

No 6340, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper considers the optimal tax treatment of voluntary transfers to individuals in a" framework that integrates redistributive income taxation and estate and gift taxation. Under this" formulation, redistributive considerations become secondary. The optimal tax treatment of" transfers depends upon the differences between expenditures on transfers and ordinary personal" consumption. It turns out that some types of transfers confer a sort of positive externality on" donees, some create tax revenue externalities, and some affect donors' and donees' marginal" utilities of income in a manner relevant to the optimal taxation problem. Different types of" transfers have qualitatively different effects.

JEL-codes: D64 H21 (search for similar items in EconPapers)
Date: 1999-03
Note: PE
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