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Tax avoidance - a natural experiment

Henry Ohlsson ()

No 2007:13, Working Paper Series from Uppsala University, Department of Economics

Abstract: The objective of this paper is to empirically study if and to what extent people legally reduce their tax payments. There are few empirical studies of tax avoidance although avoidance may seriously affect the possibilities to raise tax revenue. I use a sample of Swedish siblings receiving inheritances in 2004. These children of deceased had the opportunity to avoid inheritance taxes by partly or fully ceding their inheritances to the grandchildren. My first main result is that almost two thirds of the children avoid taxes. The likelihood of avoiding taxes decreases with age. The more of the taxes a child potentially can avoid, the more she avoids. Second, only one out of four minimize their tax payments. The more of the taxes a child potentially can avoid, the more likely he is to minimize taxes. And third, siblings tend to make the same choices whether or not to avoid taxes and to minimize taxes.

Keywords: tax avoidance; inheritances; cede to children (search for similar items in EconPapers)
JEL-codes: D10 H24 H26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-pbe
Date: 2007-02-20
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