Inheritance tax planning at the end of life
Oscar Erixson and
Sebastian Escobar ()
No 2018:5, Working Paper Series from Uppsala University, Department of Economics
There is an ongoing debate about whether inheritance and estate taxes are effective in raising revenues and in contributing to a more equal society. The different views on transfer taxes are largely dependent on beliefs about whether people plan their wealth to avoid these taxes. In this paper, we follow Kopczuk (2007) and study people’s planning response to the onset of terminal illness. An extension of Kopczuk’s work is that we can effectively control for responses in wealth caused by terminal illness but unrelated to tax planning. We do this by exploiting a tax reform in Sweden that removed the incentives for people to plan their estates to avoid inheritance taxation. We find some evidence of long-term terminal illness inducing responses consistent with tax planning, but that these are not widespread or efficient enough to reduce the overall tax burden in the study population. Our results, similarly to those of Kopczuk, show that people appear to postpone some decisions about their estates until shortly before death.
Keywords: tax avoidance; tax evasion; tax reform; terminal illness (search for similar items in EconPapers)
JEL-codes: D14 D64 H26 H31 (search for similar items in EconPapers)
Pages: 49 pages
New Economics Papers: this item is included in nep-eur and nep-pbe
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://uu.diva-portal.org/smash/get/diva2:1190605/FULLTEXT01.pdf Full text (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:uunewp:2018_005
Access Statistics for this paper
More papers in Working Paper Series from Uppsala University, Department of Economics Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Ulrika Öjdeby ().