Estate Taxation with Altruism Heterogeneity

Emmanuel Farhi and Iván Werning

Working Paper from Harvard University OpenScholar

Abstract: We develop a theory of optimal estate taxation in a model where bequest inequality is driven by differences in parental altruism. We show that a wide range of results are possible, from positive taxes to subsidies, depending on redistributive objectives implicit in the cardinal specification of utility and social welfare functions. We propose a normalization that is helpful in classifying these different possibilities. We isolate cases where the optimal policy bans negative bequests and taxes positive bequests, features present in most advanced countries.

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http://scholar.harvard.edu/farhi/node/71016

Related works:
Journal Article: Estate Taxation with Altruism Heterogeneity (2013)
Working Paper: Estate Taxation with Altruism Heterogeneity (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:qsh:wpaper:71016

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